Written by: Dana Pezzuti, Director, BE Structural

Keys to Success

• Be an informed consumer (learn about the type of work you plan to have done)
• Make sure the contractor is licensed as required by state law and see if there are any registered complaints to date.
• Check with the Department of Consumer Protection to determine whether there have been confirmed problems with the contractor
• Get at least three estimates
• Get references (talk to previous clients of the contractor); only use well-established, experienced, legitimate contractors
• Make sure you have a written agreement before beginning any home improvement project
• Make sure the contract includes specific details (e.g., precise terms regarding materials to be used, finishing touches, homeowner’s right to inspect/approve the work, etc.) 

Definition of Home Improvement

Home improvement generally refers to any repair, replacement, alteration, renovation, remodeling, installation, construction, conversion or modernization of or in a private residence (including condominiums) or apartment.

Examples of home improvement categories include:

• Waterproofing
• Exterior siding, leaders and gutters, decks, patios, garages
• Additional rooms
• Roofs
• Driveways and walkways
• Kitchens and bathrooms
• Masonry
• Fences
• Painting
• Landscaping
• Swimming pools
• Fire or burglar alarms

Contracts

Before you sign a written agreement or select a home improvement contractor:

(1) License. Make sure that the contractor is appropriately licensed.

Pennsylvania: http://www.pacontractorslicense.com/

Maryland: http://167.102.227.6/license/mhic/mhicapply.shtml#req

Virginia: http://www.dpor.virginia.gov/LicenseLookup/

(2) Insurance. It’s important that a contractor has adequate liability, disability, and Worker’s Compensation insurance — licensing in most Jurisdictions requires proper insurance. Check with the Jurisdictional Authority to find out the minimum amount of insurance required for the type of home improvement contractor you wish to hire.  Contact the Insurance Agent or Company to confirm that the Insurance is in good standing and if the can mail you a certificate of insurance directly.

(3) References. Ask the contractor to provide you with a written list of three of his/her most recent home improvement jobs that have been concluded in the last few months, including customer names and either a telephone number or address of the customers. Contact the customers and ask questions about the performance of the contractor.

 (4) Complaints. Check with the Jurisdictional Authority and your state or contuse Department of Consumer Protection to find out whether there are any complaints on file against the contractor.

 A three-year history of complaints is kept by the Department of Consumer Protection. In accordance with the Freedom of Information Law, you may request a copy of any complaint history. Information about complaints is provided to you for the purpose of making an informed decision. Therefore, you should carefully review the outcomes of complaints (note: complaints in and of themselves may not indicate a problem; some complaints, when investigated are found not to be justified).

Written contracts should generally include:

• The name, address, license number, & federal employer identification number, if any, of the contractor.
• The approximate date when the work will begin and the date certain on which the all of construction will be completed.
• Detailed description of all of the work to be done, the materials and equipment to be used, etc.
• Specification of whether any additional/related work needs to be performed in order to comply with laws, ordinances, building codes, etc.
• Payment schedule, specified in dollars and cents. The schedule of payments must be specifically tied to the amount of work to be performed and to the materials and equipment to be supplied by the contractor. It’s advisable to schedule your payments so that the final payment is due 30 days or more after the work is completed in order to have time to assess whether there are problems with the work.
• If the contract provides for a down payment, such down payment must not exceed $1000.00 or 15% of the contract price (not including finance charges), whichever is less.
• A minimum one-year warranty guaranteeing the quality of workmanship.
• A provision that the contractor obtain any necessary permits and provide to the owner a certificate of occupancy, if required.
• A provision regarding notice of cancellation by the homeowner.

 Notes:

 a. Change orders. Make sure that no additional work is performed without prior written authorization of the person who hires the home improvement contractor. Generally, any such authorization must be on a contract change-order form, which shows the terms and reasons for the changes. Both parties must agree, in writing, to the change order.

 b. More information. For additional information about terms to include in a home improvement contract, contact the Department of Consumer Protection in your Jurisdiction.

 c. Vague terms. Don’t sign a contract that has vague terms or blank spaces.

Do’s and Don’ts 

DO

• Plan ahead – make a checklist for yourself (you can use this list). Determine your needs, funds, including approximately 10% over the estimate for additional work that may have to be done, priorities and goals. Know what you must have in a home improvement project and what you can do without.
• Be an informed consumer. Learn about the type of work you plan to have done: Review trade manuals (available in libraries & hardware stores) and use the Internet. Look at catalogs for styles.
• References/previous experience. Evaluate contractors based upon your own experience or the experience of one of the contractor’s clients. Professional references can also be important: it may be useful to contact the contractor’s creditors, such as their banks, suppliers, and local businesses that he/she deals with regularly.
• Legitimate business. Make sure the contractor is established on premises that you can visit; be wary of contractors who provide only a telephone number.
• Multiple estimates. Obtain three or more estimates of the work; estimates should include very specific information about materials and labor. Review the estimates. If there is a wide range between the highest and lowest estimates, find out why.
• Timeframes. Find out whether quotes/estimates are binding for a specific period of time. If not, discuss with the contractor what a reasonable timeframe is for the estimate to hold.
• Building permits. Determine whether a building permit is needed and whether a professional engineer or registered architect must prepare construction drawings in order to obtain such permit.
• Jurisdictional Authority regulations require the contractor to obtain the permit.
• Ground rules. Make sure you discuss “ground rules” with the contractor. “Ground rules” include preparatory work, when the work will begin and is expected to end, and how the work site will be maintained (i.e., how clean it will be left, removal of rubbish).
• Payments. Schedule your payments so that the final payment is due 30 days or more after the work is completed in order to have time to assess whether there are problems with the work.
• Subcontractors. Get the names of subcontractors, if any. Check with suppliers and
• Subcontractors to find out if they have been paid. It may be appropriate to get lien waivers from subcontractors before your final payment is made.
• All subcontractors must maintain their own home improvement licenses. Electrical and plumbing work must be completed by licensed plumbers and electricians (check with the Department of Consumer Protection for information about plumbers and electricians).
• Penalty clause. Include a penalty clause in the contract in case the contractor fails to start or finish the project by the specified date.
• Job supervision. Determine who (e.g., homeowner, foreman, contractor) will supervise the job in order to ensure that the project is being done properly. Even if a foreman or the contractor is designated to supervise, you should keep a watchful eye on the contractor or hire an independent construction inspector to over see the construction and payment requests.
• Extra materials. Obtain materials such as tiles, siding, wallpaper, and paint to have for repairs and so you don’t have trouble matching colors in the future.

 DON’T

• Don’t  be pressured into having unnecessary work done; don’t rush into signing a contract.
• Don’t jump at “special offers”; check them carefully and make sure they really are “special” (a good price) and that they are not lower in cost because of inferior materials or workmanship.
• Don’t pick the first contractor that you see advertised or hear about or use contractors that solicit door-to-door; don’t select a contractor unless you have checked references.
• Don’t  begin a home improvement project without a written agreement.
• Don’t sign a contract that has vague terms or blank spaces.
• Don’t give the contractor a cash deposit; don’t give more than the minimum deposit required.
• Don’t pay a contractor in cash. However, if you do, make sure that you are given a clear receipt.
• Don’t (avoid) select a contractor if you don’t feel comfortable with him/her; you need to be able to resolve problems, express your opinion, etc. 
• Don’t alter plans once work is in progress unless absolutely necessary.
• Don’t give a contractor a key to your house or leave him/her unattended.

WHAT TO DO WHEN THINGS GO WRONG

• The best strategy is to prevent problems – please refer to the other links in this site for guidance about how to get started. However, if you believe that your home improvement contractor is performing in an unacceptable manner.
• The least costly, least difficult route is to first try to resolve problems with the contractor. Consider and discuss terms of the contract.
• Contact your local building inspector. Although building inspectors won’t take sides, they also have an interest in ensuring that work is in accordance with building standards and codes.
• Contact the Department of Consumer Protection. Complaints to the Department of Consumer Protection, which will be investigated, must be in writing. Be prepared to provide a copy of your contract and other documentation, including evidence of payments.

Better Business Bureau www.bbb.org

Remodelers Council (NAHB) www.nahb.org

National Association of the Remodeling Industry (NARI) www.nari.org

Office of the Attorney General

Pennsylvania Office of Attorney General

Home Improvement Consumer Protection Act Helplines:

Consumer Helpline 888.520.6680

Contractor Helpline 717.772.2425

Attorney General of Maryland

(410) 576-6300, 1 (888) 743-0023 toll-free

Attorney General of Virginia:  http://www.oag.state.va.us/