HOME OWNER BEWARE!
Tips for Hiring a Contractor
By Robert A. Waltemate
Now that building has picked up in the nation, there are going to be a lot of homeowners looking to hire just about anyone. Because it may be hard for the average homeowner to identify a qualified builder, our building association, South Pacific County Master Builders a chapter of Olympia Master Builders, thought it might be in everyone’s best interest to provide list of items to remember.
Hire a Licensed Contractor
The most important thing you can ask is if a potential builder is licensed in Washington State. Proof of this is a credit card sized registration card. To verify the contractor’s license you can either call the Washington State Department of Labor and Industries (L&I) at 1-800-647-0982 or if you have access to the internet https://fortress.wa.gov/lni/bbip/. You can ask Labor & Industries (L&I) if there have been any complaints about the contractor and what their license status is.
The reasons for having a licensed contractor are very important for the homeowner. To have a license in Washington State there are minimum requirements for liability insurance and bond. Liability insurance must be for $600,000.00 and the bond for a general contractor is $12,000.00. The bond is there for your protection. An example would be if your contractor didn’t pay the lumber company after building your project, or for defects in the workmanship.
What type of work is the contractor licensed to do?
There are specialty licenses available to builders and an example would be to install flooring. Specialty licenses have lower bonding requirement of $6,000.00. Make sure that they are licensed for the type of work they are doing.
Who are their local work references?
Who have they done work for in the immediate past. Get a phone number and CALL it! This will help you decide if you can trust them to complete the project, and if they have the skills needed
Where do they get most of the building materials from?
This can be an expensive mistake! If the work being done isn’t under contract, and is being done “by the hour,” then make sure the material price is the best possible. Don’t fall into the trap of setting up an account somewhere, and then the builder just charges the material to you. If you do this, then the builder and supplier have no incentive to get you the best price. In fact the more the material cost, then the more the builder is charging on handling the materials.
Are the builders’ employees are covered under Labor and Industries insurance, as required by law?
You can get proof of this by asking to see the builders last L&I tax return. If they can’t because they just hired the employee, then call Labor & Industries and see if they have an active account. By law an employer must have an account open before they hire employees. The chance the homeowner is taking by not using a builder that is covering their employees is simply one of an injured employee suing the homeowner for the cost of medical bill and the like. It isn’t worth the risk, for we all know how much medical care can cost.
Obtain a written contract.
A contract is a guarantee of a price you will pay only if it explains in detail what you are hiring the contractor to do. One or two lines with a price is not a contract! The more detail the better. Make sure that both you and the builder sign and date the contract and that there is a warranty length stated on the contract. Double check the price includes Washington State Sales Tax (8% here in Pacific county). The contract should also include payment terms, permit fees (if applicable), materials used, payment schedules, and a change order process. There also needs to be a final review process and sign off procedures to be done at the end of the job. Avoid verbal contracts and paying for incomplete work in full.
Lastly, don’t hire someone you are not comfortable talking with.
Good communication is a must. If someone is unresponsive to your questions, then keep looking for a better builder. Make sure to inspect the work as it is being done. Don’t pay in cash. This makes it harder for the homeowner to prove work was done and when the work was done, and can make it hard to place a claim against a bond.
There are many traps for a homeowner to fall in, and our association and I hope this will serve as a starting point for you. South Pacific County Master Builders was formed to help keep housing affordable, and I think also to help get important information available to the public. Builders wanting to get involved in the association should contact Olympia Master Builders at 1-800-456-6473 or on the web at www.omb.org.
2/19/2008; Updated 12/17/17