Contractors 103: After You Hire a Contractor

When using a contractor for a project, you may think that your job is finished once you have hired a contractor. However, there are some important steps you should take that can save you money and protect your property.

Keep Records

When using a contractor, it is very important to keep all the paperwork related to the project in one location. This could include:

  • Copies of the contract
  • Any change orders or changes to the original contract
  • Any correspondence with your contractor
  • A record of any and all payments (including the down payment). You may also need these for tax purposes.

Make smart payments

Only make a final payment when you are satisfied

Make sure that all parties have been paid. If subcontractors or suppliers have not been paid laws in your area may allow them to take a lien out against your home to satisfy their bills. You can prevent this by asking the contractor, any subcontractor, and the suppliers for a lien release or a lien waiver.

Know the limit for the final bill

Your local or state laws may limit the amount which the final bill can surpass the estimate without your approval.

Know you can withhold payment

If you paid for the merchandise or the service you may be able to withhold the payment. If you have made a good faith effort to work out the problem with the seller you have the right to contact your credit card company and withhold the payment from the card issuer for the merchandise or services. You are able to withhold the payment up to the amount of the credit outstanding for the purchase plus any finance or related changes.

Use a Checklist

Before making a final payment make sure that the following have been completed:

  • All work meets the standards outlined in the contract
  • You have all the warranty information for materials and workmanship
  • You have proof that all subcontractors and suppliers have been paid
  • The job site has been cleaned and any excess materials, tools, or equipment have been collected
  • You have inspected and approved the completed work

Reporting a Problem

If you have a problem with your home improvement project there are some steps you can take.

Try to resolve it with your contractor.

Make sure to follow any phone conversations up with a letter sent by certified mail. Request that you receive a return receipt. This will provide proof that the company or contractor received your letter. Be sure to keep any correspondence in your file.

If resolving the issue with the contractor was not successful you can consider getting outside help.

 For more information:

Information on builders, service providers, or remodelers: http://www.nahb.org/local_association_search_form.aspx

Information on energy efficiency: https://www.energystar.gov/index.cfm?c=new_homes.hm_index

Information on contractors, financing, and home improvement: https://www.consumer.ftc.gov/articles/0242-hiring-contractor


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