Ten Things a Homeowner Must Know Before Starting a Home Improvement Project – part 1

For many people, their home is their largest asset.  If you are thinking of undertaking a renovation project, the next few posts will explore things you need to know and consider before you start.

First, do your homework before you hire someone.  Don’t just ask a potential contractor for references – of course he or she will provide their best customer (or perhaps a relative or friend).  Instead, ask for the names of the last three homeowners the contractor worked with.  While reviews on-line are not the end all-be all, take a look at them.  If there is a negative review, as the contractor about it.  There may be a perfectly logical explanation, or not.  Check a contractor’s registration under the Home Improvement Contractor Statue (run by the Office of Consumer Affairs) and their license as Construction Supervisor (overseen by the Board of Building Regulations and Standards).

For the former, I recommend searching under the individual’s name, even if you will be entering into a contract with a company.  Under Chapter 142A, a company is required to designate an individual to be jointly and severally liable with the company.  You want to know who that person is and, unfortunately, some unsavory contractors have been known to scam the system.  I have located one individual with more than one company in existence in the system.  When you click on a registration number, you will be able to see if there have been any arbitrations against the contractor or any adverse action with regards to the registration.  Keep in mind that an HIC registration is just that – a registration.  There is no examination required.

A Construction Supervisor License (CSL), on the other hand, requires someone to pass a test and a CSL has to maintain that license by taking continuing education.  When you search for CSLs, you can see if their license has been suspended or if other adverse action has been taken.

In general, your contractor must have both and HIC and CSL to apply for a permit.  It is permissible for your contractor’s employee to be the CSL.   However, if your contractor suggests you should secure the permit, be very wary.  Not only will that exclude you from a state run guaranty fund, but it should raise a red flag as to why your contractor — the person with the professional experience — is not pulling the permit.  Whoever is securing the permit has the responsibility to make sure that the building code is followed.

Another thing to consider is whether and what kind of insurance your contractor has.  Many contractors have comprehensive general liability insurance and if a contractor has employees, it should have worker’s compensation insurance.  However, neither of these policies will pay for negligent work.  While there is insurance for contractors that would cover negligently performed work, in my nearly 20 years of handling construction disputes, I’ve never had a case where the contractor had such coverage.  In all events, make certain that the insurance is in the name of the person or entity performing the work and that the work is covered by the policies.  I had a case once where the contractor agreed to perform roofing work and his policy excluded coverage for roofing work.  No one realized the policy limits until there a problem arose and then it was too late.

Once you find a contractor that you want to work with, then you have to negotiate the contract.  That will be the subject of our next blog post.