Hiring a Contractor
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The Contract

Most contractors have a standard contract they use for every job, but you can write in changes that are agreeable to both of you. Before signing the contract read it over carefully and ask questions about anything you don't understand or don't agree with. There are some elements you should insist are part of the contract, including start and finish dates, a procedure for handling change orders, and a statement that the contractor will provide lien waivers for himself and all subs and suppliers. Some homeowners insist on a penalty for not finishing on time. Most contractors will resist this because homeowners do their fair share to make a job drag past its completion date. If you insist on a penalty, it will go over better if you also provide a bonus for early completion.

A good contract will also include a payment schedule. Typically this specifies three 30-percent lump payments at specified milestones with the final 10 percent held back until punch list items are completed. Do not pay anything more than token earnest money up front, if that. A successful contractor has adequate credit and cash flow to cover initial labor and materials.

Subcontractors

A subcontractor performs work in a specific area, such as plumbing, electrical, tiling, or painting. While the contractor hires the subs on large jobs, you may occasionally hire a sub yourself for a smaller project or one that you are managing yourself. The process for selecting subs and letting bids is the same as for a contractor: get referrals, collect bids, narrow the field, and make your decision.

Where the process varies is with the contract. Since the scope of the job is usually narrower, you generally just sign the itemized bid to seal the deal. As with a contractor, be leery of paying any money up front. With a sub, the policy is usually payment in full upon completion of the job. Be sure to have the sub sign a lien waiver when you hand over the check.

 

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