5 Tips to Protect Yourself Against Unethical Construction Contractors

There are all kinds of contractors.  However, an unethical or bad contractor can create problems that put you in a worse situation than you were in than when you originally hired him.  Here are some suggestions to eliminate this scary but real possibility.

  1. Get three solid references for the proposed contractor- I realize this is obvious, but when we are excited and anxious to start a project, resist the temptation to jump in because it “feels right”. Contractors can be charming and persuasive.   Many contractors promise that your project is “straight forward” and “won’t take as long as you think.” When you contact the each reference ask questions about the quality of his work, whether his guys show up as promised, if they keep the work area clean, and if he delivered the price and time on project as promised.  Close by asking “would you hire him again”.   Be thorough.  This is your one shot to avoid a bad situation.
  2. Hire a licensed contractor- a licensed contractor must comply with the California state license board, cslb.ca.gov.   This is the state operated watchdog. Among other things a licensed contractor is required to keep a bond of at least $15,000.00.  This is sort of like carrying liability insurance.   They also have the authority to suspend or take their license away.  Confirm that the contractor is in good stating with the license board.  An unlicensed contractor doesn’t have to carry a bond or liability insurance so they often don’t.  An unlicensed contractor may be cheaper and is tempting to hire.  If you do, keep in mind if things go south your recourse against him is limited.
  3. Don’t pay for any work in advance- Make sure the work performed is ahead of the money you have paid.  Otherwise you lose leverage to have the contractor   properly complete each phase of the project. Closely monitor all work before you pay- This is a pain, but necessary. Its real easy for a contractor to cut corners without letting you know.  Staying involved in the project sends a message to the contractor that you are on top of things and won’t tolerate any funny business. Always inspect the completed work before paying.
  4. Pay sub-contractors directly for their work- If you pay the general contractor for a subs work there is no guarantee that he will pay the sub.  If the general contractor chooses not to pay the sub contractor, you are still on the hook to the sub contractor and could be subject to a mechanics lien on your home.  In other words, you could end up paying twice for the same work.
  5. Don’t become buddy-buddy with the contractor- it’s easy to have a cup of coffee and become friendly as we all want to like people who work for us.  Being too chummy can make it difficult to maintain a business relationship and be firm when you need to be.  Keep reminding yourself this is business, if you want to be social friends with the contractor, do so when the project is done.