Getting the Job Done: How to Find, Hire, and Communicate with the Right Contractor
Whether building or renovating, construction is a stressful and costly process. While many homeowners may spend a lot of time dreaming about how they will enjoy a new kitchen or brand-new home, far less time is spent thinking about how they will reach that point. While it’s obvious that construction takes a budget, a plan, and skill, many homeowners enter into a contract without completely understanding the components or the roles of various players in the process. Luckily, there are ways that homeowners can lessen their stress and improve the chances of a successful home construction.
Table of Contents
- Types of Contractors
- Common Construction Problems
- Before Hiring a Contractor
- After Hiring a Contractor
- Dealing with a Bad Contractor
- Prepare in Advance to Hire the Right Contractor
Types of Contractors
When planning a home improvement project, homeowners typically spend the bulk of their time figuring out how they want the final project to look and almost no time thinking about the people who are going to get them there. The following jobs describe each role and when they may be used during the construction process.
A general contractor is one of the most important people when it comes to keeping a home improvement project on time and within budget. Sometimes, homeowners will act as their own general contractor hoping to save money. However, one of the biggest advantages to hiring a general contractor is that he or she takes on a lot of the liability that would otherwise fall on the homeowner. When a general contractor pulls building permits for a project, they use their business name, which means any violations will be up to them to address.
Licensing requirements vary by location, so not all general contractors may be licensed. However, homeowners should check to ensure that a general contractor is bonded and insured. Experienced general contractors will carry worker’s compensation, relieving homeowners of yet another liability should a worker get injured on their property.
While a general contractor is responsible for overseeing the entire project, a specialty contractor—as the name would suggest—is responsible only for the part of the project that involves his or her area of specialty. Examples would include an electrician, a plumber, a bricklayer, or a tile installer.
While these workers may only have to focus on their own area of expertise, they must still understand things like code requirements, government ordinances, and safety practices. It’s also important they comprehend the overall scope of the project and how they contribute to the end goal. It falls to the general contractor to communicate details to specialty contractors.
Specialty contractors may be hired as individual, independent contractors, or they may be hired as part of a team working together on the project, depending on the scope of the project and its needs.
Most people are familiar with the occupation of an architect. In home construction or renovation, the architect plays the role of the visionary, just on a smaller scale. No matter the size of the project, the architect designs spaces while considering things like safety, environmental impact, and cost. It’s their job to communicate their ideas to the general contractor so the ideas can be carried out.
True architects have their degree and are licensed. As such, these professionals are bound by a code of ethics and conduct. Like real estate agents, attorneys, and doctors, architects are required to go through continuing education and professional development throughout their career.
Designer or Design Contractor
Design contractors or design-build teams are a different approach to construction than traditional construction management or the design-bid-build process. Unlike the other two options, design contractors streamline the construction process so that there is just one contract, with the team responsible for both design and construction.
Besides the obvious advantage of streamlining the process, a design contractor offers what should be better communication between the design part of the project and the actual construction component. Everyone is part of one cohesive team. With the designer playing such an integral role in overlooking the construction process, keeping the overall project on track, both in terms of cost and timeline, should be made easier. There’s also the advantage of having just one entity for the owner to work with.
From the design contractor’s standpoint, there’s the opportunity for higher profit margins. Additionally, improved communication and cohesiveness seem to reduce risk of litigation.
The primary difference between a general contractor and a subcontractor is in the contracting. A subcontractor works under a contractual basis as well, but his or her agreement is made with the general contractor, not the property owner.
The majority of the time, subcontractors have an area of specialty, and from that standpoint, they are also specialty contractors. But unlike a specialty contractor, who may work directly for the homeowner, a subcontractor—often called simply a “sub”—works directly under contract with the general contractor. Often, a subcontractor will build up a network of general contractors they work for, ensuring they have steady work.
Not all subcontractors are specialty contractors, however. While still working under an agreement with the general contractor, some subcontractors will take on more of a project manager’s role, providing the general manager with whatever support is necessary in keeping all the wheels in motion on a project.
Common Construction Problems
Construction is an imperfect process. No matter how competent the contractors and workers, no matter how good the communication, and no matter how skilled the workers, problems inevitably crop up. How experienced the general contractor is in dealing with such issues can make all the difference between a momentary setback or derailment of the project.
Wrong Custom Orders
A common problem that occurs during construction is that an item—whether it be kitchen cabinets or floor tile or countertops—is incorrect.
The first thing to be done is to trace where the breakdown in communication occurred. This should be the general contractor’s job. If it can be determined that the error was made by the vendor, then the situation is remedied according to the homeowner’s preference.
If it is just a matter of aesthetics and not functionality, a homeowner may very well opt to move forward, perhaps taking a small credit, in order to keep the build moving.
One of the myths of residential construction is that everyone working on the project understands how to read blueprints. Property owners have the responsibility of educating themselves in the basics. This is an important step because when that first set of blueprints arrive, the owners need to determine whether the plan before them is correct.
Problems can occur when a worker misinterprets or misses something on the blueprints. Another cause for errors is when older versions of the blueprints are being used on the jobsite. The only set of blueprints that should be on the jobsite are the most current versions.
Delays in Completed Work
Delays in construction are so prevalent that some might consider them inevitable. Weather, material delays, vendor problems—all can cause a delay.
The good news is, general contractors have plenty of incentive to finish the project on time. For one thing, it allows them to get paid and move onto their next job. A general contractor also knows that one delay can set off a whole series of delays. Homeowners should ask for a schedule, then meet periodically with the general contractor or builder to monitor progress and learn about any delays.
The problem of unexpected costs can often be alleviated from the start with a construction contract that spells out what is to be done under such circumstances. There are several ways in which unexpected costs occur, many of them within the homeowner’s control. For example, the owners may start to make some changes, after the project is already under way. How these are handled should be in the contract.
There are other unexpected costs, however. Excavation for a new home may hit an unexpected table of rock when digging starts for a basement. Renovation is always ripe with unexpected costs, especially when walls start coming down on an older home. Who pays for what is something homeowners need to write into their contract. Leaving the door open with a contract that specifies a price plus “unexpected costs” is a risk an owner should not take.
Like other mistakes that can occur with construction, the potential for the builder to make an error is something best addressed in a contract, prior to the project start. In most cases, if it is clearly a mistake the builder made, then the builder is going to have to pay for the cost.
But who pays for the mistake isn’t the only consideration. There are times when one mistake ends up leading to a series of problems that become more costly than the initial concern. The other issue is that when a mistake is made, regardless of whose fault it is, the timeline for the project is often impacted. That’s why it is so vitally important for property owners to hire a competent, experienced, and qualified general contractor. He or she can often offer ways to address whatever problem has occurred and even work to get the progress back on track.
Design Not Meeting Expectations
Often, a problem doesn’t occur because of an error. Instead, the homeowner doesn’t like what he or she sees as the construction unfolds. Maybe the master bedroom isn’t as spacious as they’d envisioned, despite following the blueprints' specifications exactly. Or, perhaps the brick sample in the showroom looks completely different to the homeowner now that it does on the walls of the home.
These types of scenarios are all too common. Many can be alleviated with good communication on the front end.
Before Hiring a Contractor
Whether remodeling a home or building from the ground up, construction can be extremely stressful and costly. A qualified and experienced contractor or builder can make or break a home renovation or new build. The following tips explain how to choose the right contractor for the job.
Establish a Budget
Owners should determine their budget before any other step. Unless they are going to pay with cash, owners should begin seeing a lender about the home or renovation they envision and secure financing through a mortgage or home equity loan. The lender will be able to tell them how much they qualify for and what the terms will be.
Armed with their preapproval amount, the owners can establish their budget. Establishing a budget—and sticking to it—will help alleviate many problems that can crop up throughout the build. Owners should also add some wiggle room for those unwelcome surprises.
When determing their budget, owners should ask for quotes, rather than estimates, wherever possible. Businesses will usually honor quotes, but estimates are always subject to change. Owners should ask vendors how long the quote will be honored, as most have a time limit due to expected escalation of material prices.
Most homeowners are making one of the largest investments of their lifetime, particularly if they are building a new home. The more research they can do before making a hiring decision, the less risky the project becomes. The last thing any homeowner wants to do is hire a contractor based on an advertisement.
Homeowners should ask for recommendations from trusted friends and colleagues who have recently built or renovated. References, both from the construction community as well as past customers, and examples of past residential construction work, can help homeowners determine the right contractor.
Homeowners should also meet with an architect to get their vision accurately presented on paper. Once the blueprints have been finalized, they can serve as a means of receiving bids from potential general contractors or builders.
Set Up Multiple Interviews
Once the research phase is complete, homeowners can begin to narrow down their choices for a general contractor. Even if there appears to be a clear winner, it’s important for homeowners to sit down with the builder or general contractor before making a final selection.
Homeowners should prepare a series of questions on topics such as how long the builder or general contractor has worked with their subcontractors, how many projects they will be working on at the same time and what their stage is in those projects, and whether there is any reason to believe the general contractor won’t see the project through. This is also the time for homeowners to ask contractors about licenses and insurance.
Asking questions such as these will not only help to narrow down the contractors, but also provide homeowners with a glimpse of each contractor’s professionalism, reliability, and availability.
Get a Written Contract
The most important thing that homeowners should remember about hiring a contractor without a written contract is simply this: never do it. Even the best planned construction or renovation runs into challenges. It doesn’t matter whether it’s human error or an act of nature.
In some states, contracts are required to move forward with permitting and other pertinent steps. Lenders will want to see a contract. Even if they weren’t required, a written contract can help mitigate challenges that crop up during the build.
One of the most important areas that homeowners should discuss with their contractor and then put into writing is cost. They should ask for a materials list and make clear what happens if the price of materials increases at any point during the construction process. Homeowners will want to be sure the payment schedule is spelled out in detail, as well as expectations for when and how all vendors and subs are paid. The contract should include a lien waiver and subcontractor lien waiver.
Homeowners must be sure the contract covers a long list of items in addition to those related to price and the work to be done. The contract should state the timetable and how delays will be addressed. A comprehensive contract will include scenarios of problems arising and what the cost of the remedy will be if they occur.
Homeowners will also want to agree on how change orders will be handled and confirm that getting the necessary permits will be the responsibility of the builder. Anything the homeowner and contractor originally agreed to verbally will also need to be put into writing. Finally, homeowners should consider having a construction attorney review the contract before the homeowner signs off on it.
Prepare Household for Stress
While some areas of the house may be unusable, it’s likely homeowners can stay in their home during a renovation, avoiding the expense of a long-term hotel stay. There are things a homeowner can do to reduce stress, even something as small as making sure all household belongings are cleared out of the way or adequately covered.
Another important consideration for homeowners is pets. While it may be stressful for the pet to be housed elsewhere for the duration of the construction, it may be less disruptive than staying in a house with the noise, smells, and hazards of a full-on renovation.
At some point in the process, homeowners may still need to spend a night, or even a few, out of their home. It is less stressful on everyone if this is planned for ahead of time.
After Hiring a Contractor
Once a contract has been signed and the general contractor or builder has been selected, it’s time for the project to get underway. All the homeowner's planning should now pay off—from the details in the contract to selecting the best people to ensuring the design is communicated across the board.
Maintain Organized Records
The statutes of limitations differ by location, but homeowners should plan to maintain organized records for at least an equal number of years. Memories of what was agreed upon are not particularly useful, but written records can be invaluable.
While everything may appear fine during the final walkthrough, some issues may not crop up until years down the road or perhaps not until certain other conditions are present, such as a major weather event. With accurate records of what was promised and what was to be delivered, homeowners have valuable information to use, should a problem arise in the future.
Homeowners should also consider that general contractors are likely to keep records on the project as well. In the event there’s a problem down the road, those records become the only proof of the contract and deliverables if the homeowner is unable to produce any proof that validates their complaint.
It is the homeowner’s obligation to make payments to the general contractor according to the agreed-upon payment schedule. If a contractor feels the homeowner isn’t living up to the contract, the contractor can apply a lien to enforce payment. The purpose of a lien is to ensure payment for work that has been completed by the contractor. A lien can be requested by others as well, even when it is the general contractor’s obligation to pay them and not the homeowner’s responsibility.
For that reason, it’s good practice for homeowners to include a contractor’s lien waiver in the original contract. The lien waiver has the contractor agreeing that he or she has met all obligations of the contract, including paying for all materials and labor. Homeowners should revisit this agreement at critical points along the way to ensure the general contractor is keeping up with what is owed to vendors and subcontractors. Doing so can prevent other parties placing liens against the property.
Refer to a Checklist
Part of the way homeowners can stay organized is to make a checklist that includes all the anticipated dates for critical points in the project’s progress, in addition to making note of any warranties from products or services that are a part of the project and important supplementary details. The checklist should be kept by the homeowner but shared with the general contractor in order to keep the lines of communication open and to lay out all expectations. If there’s a question along the way, the checklist will provide an easy reference, containing pertinent parts of the contract.
Dealing with a Bad Contractor
Unfortunately, there are situations where homeowners can’t rely on the general contractor when it comes to solving the problems that arise because it turns out that the general contractor is the problem.
Despite thorough vetting, problems occur. Luckily, the homeowner has a few options in dealing with the situation.
Consider the Options
When it becomes evident a general contractor is not fulfilling his or her obligations of the contract, the first step a homeowner should do is communicate these concerns and request solutions with deadlines. If this approach does not address the situation, a homeowner should review the contract carefully to see what remedies it allows.
It’s not uncommon for builder contracts to suggest remedies, such as mediation or arbitration, as a means of settling disputes between a homeowner and the general contractor. Depending on the terms of the contract, owners can request a hearing for mediation or arbitration, or they may need to file a claim.
Even though no one wants to think about the need to use contracts, checklists, and other documentation to show that a contract is not being fulfilled, it is better for homeowners to have this sort of evidence at the ready than to have to rely on memory and conversations.
Fire the Contractor
This is one option, but before firing a general contractor, an owner should understand what a breach of contract is and whether it applies to the current situation. In general, a breach of contract can fall into two categories: a non-material breach of contract and a material breach of contract.
Usually, a non-material breach of contract is considered less serious than a material breach of contract. This is because there is typically no actual damage, monetary or functional, caused by the breach. An example would be putting in a different fixture than was selected. It may not have been the owner’s preference, but it functions just as well and is of the same value.
In a material breach of contract, however, there are damages. In this case, the breach of contract impacts the terms of the contract, typically with lasting impacts on use and enjoyment, financial impacts, or both.
Hire an Attorney
No one wants to have to take legal action, but unfortunately there are times when hiring an attorney is the only remaining course of action to protect a homeowner’s investment when a contract is breached. A new home or a major renovation represents some of the biggest expenditures a homeowner will make during their lifetime.
Homeowners who believe this is the correct course of action should engage the representation of an attorney practicing construction law. A construction attorney will be familiar with cases similar to the problems the homeowner is facing. He or she can review contracts and any other documentation, then give a professional opinion of how best to proceed.
Even if the contract signed by the owner contains a clause that appears to allow him or her some remedy for the situation at hand, it’s a good idea to have an attorney review the contract prior to moving forward.
Prepare in Advance to Hire the Right Contractor
There’s no getting around it: residential construction can be stressful. Homeowners who are well-prepared before the project or new build gets underway are more likely to be happy with both the process and the outcome.
One of the most important steps homeowners can take is to hire the right general contractor for the job. It’s important to interview potential contractors and ask a series of questions—from how many years of experience they have to what insurance they carry to what percentage of their jobs finish on time. Homeowners should request references and learn how problems are addressed, should they arise during the process.