Ward Off Contractors Headaches

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[2] If foundation work is involved, specify that you want a soil analysis performed by a civil engineer. Certain types of earth require special foundations, and your contractor isn't likely to be an expert in that field.

[3] The contract should include a list of all the materials to be used, as well as a description of their quality: Construction—grade—rather than utility-grade—lumber, for example, should be specified.

[4] The contractor should provide a list of all the materials suppliers and subcontractors who will be involved in the job.

[5] The payments should be made at the completion of various stated phases of the work, with no more than a 33% down payment at the beginning. These initial funds will allow the contractor to secure materials, and subsequent remuneration will cover expenses as they're incurred. (For example, you should pay for the pouring and finishing of the slab when that work is completed.)

[6] Specify that all checks will be made payable to both the contractor and the supplier or subcontractor. This protects you from unscrupulous builders who take your money but fail to settle their accounts with their suppliers and subs . . . leaving you responsible for the bills. If—and only if—the contractor supplies you with a lien release from the particular supplier or subcontractor, you can make a check payable to the contractor alone. Otherwise, not only might you be left liable for unpaid bills, but an unpaid supplier or subcontractor could actually put a mechanic's lien on your home.

[7] The contract should state that the final payment after "substantial completion" (occupancy) will not be made until a lien release has been received from each of the suppliers and subcontractors involved in the work. (In addition, once the job is finished, you should notify each of these individuals in writing that no more labor or materials are to be charged to you.)

If you're careful in choosing a contractor, and if you protect yourself with a proper contract, you shouldn't have any serious problems when you build or remodel. In fact, if you do your homework first and then work cooperatively with an expert, you're likely to find that your new (or renewed) residence will exceed your expectations . . . and do so at a price you can afford.

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