Ward Off Contractors Headaches

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THE PAPERS

There are several basic legal qualifications that may or may not be required of contractors in your area, and there are still more that—although they're optional—you may want to demand. A license, for example, isn't mandatory everywhere . . . but if a contractor has one, there's a good chance that he or she is reputable. Of course, there are also valid reasons for an individual to forgo a license where it's not required—including the added expense and the imposition of controls from the building department—but you should be particularly careful in your scrutiny of a contractor who doesn't have one.

You'll also want to know whether your prospective choice carries a performance bond. This is a guarantee that the work, as described in the contract, will be finished . . . and that if it isn't, you can get someone else to complete it at no extra cost to you. When hired without a performance bond, a contractor may stop or delay work because of, for example, an incorrect estimate . . . in which case, your only recourse is either to sue or to foot the completion bill. Obviously, bonding can save you a lot of expense and trouble. Furthermore, the willingness to carry a bond is a pretty good indicator of a contractor's intention to carry out the job, since he or she is unlikely to make a habit of paying the penalties for unfinished work.

And, bonded or not, your contractor should have personal liability and property damage insurance. Suppose, for instance, a dump truck is being backed to a window to be loaded with trash, and the driver loses control. If the vehicle comes to a stop a foot or so inside your house, your contractor'd better be insured!

Be certain that your prospective builder has workman's compensation coverage for his or her laborers, too. That way, if someone is injured on your job, the contractor's coverage may keep you in the clear. (Still, it's best to speak to your own insurance agent to make sure that you have coverage in such an event, as well.)

THE CONSTRUCTION CONTRACT

A carefully thought-out written contract should be the core of every job you enter into with a contractor. The scope of the agreement will vary with the extent of the proposed work, but the following is a list of considerations that ought to be covered.

[1] Dates for starting and completing the work should be stated, and—if possible—a penalty clause for running over the time limit should be included. (Circumstances beyond the contractor's control, such as unusually adverse weather, are generally excepted from the penalty clause.)

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