8 Secrets About Working with Contractors – Bad Contractor Series Part 5

Our Best Advice For Working With Contractors For a Remodel

Before diving in, it might be helpful to start with part 1 of our Bad Contractors series: How To Spot a Bad Contractor.

Just like purchasing a home, undertaking a major home renovation and working with contractors is something most people do only a few times in their life. In the case of a home purchase, they would hire an experienced realtor to guide them through the process, but with renovations, people are on their own.  They’ll have to do their best with their limited experience to create a budget, envision a design, search for materials, and find, interview, and hire contractors.

All of this is no easy task and can often become an exceedingly stressful experience or even a renovation nightmare.  Unfortunately, over 50% of homeowners report having a negative experience with their remodel or complaining of a bad contractor. If you are unfortunate enough to find yourself working with a bad contractor, you could end up in a stressful contractor dispute.

Sadly, this is not an uncommon occurrence.  Homeowners often have the following problems when working with contractors: major project delays, poor workmanship, unreasonable extra charges, poor communication, and unresponsiveness.  

Here at GreatBuildz, a free service that connects homeowners with reliable general contractors, we speak to homeowners every day who want to get connected with honest, reliable pros to ensure they don’t get stuck with a bad contractor and end up in a contract dispute. There are quite a few secrets most contractors won’t tell you about the renovation industry  – here is some information and guidance to help you better understand contractors and hopefully deal with any issues that arise with a bad contractor.

As discussed, over half of all homeowners end up having a stressful renovation or contractor problem. But why does this happen so frequently?  There are a few reasons.  In some cases, the client’s expectations are just too high

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Also, people sometimes end up with a truly bad contractor because they just don’t do enough research and select a contractor purely on lowest price and their ‘gut’ feeling about that person. But I believe the most significant reason for contractor disputes is what I call the “imbalance” in the contractor/client relationship. Below are examples of how this relationship can sometimes favor the contractor:    

 8 Secrets That Most Contractors Won’t Tell You About Remodeling

1. The Knowledge imbalance:  The contractor knows a ton about construction and costs while the client often knows little.  This disparity can easily allow a bad contractor to “pull the wool over the eyes” of a client about costs, quality, materials, etc. and the client has no way of knowing it.  A bad contractor can easily overcharge a homeowner with extra costs during a job and the client has no way of knowing whether these “change orders” are legitimate or not

2. Quality Standards: Contractors know the quality of work necessary to meet industry standards and building code…while the homeowner does not. Because the client has limited knowledge of construction, they can’t always know if the contractor is performing quality work or shoddy work.  Likewise, contractors know the quality of the materials they are using.  The homeowner is often unaware of whether their contractor is using good materials or cheap, second-hand materials. Check out my other blog to learn how to spot poor contractor workmanship.

3. Controlling Delays: There is very little a homeowner can do about significant contractor delays.  It can be very frustrating when a project is dragging on and on, disrupting your life and your family’s enjoyment of your home. Contractors don’t like delays either, but it doesn’t affect them quite as personally since they aren’t living in the home being remodeled. Often, a client feels powerless in this situation because the only thing they can do is ask the contractor to speed up…and the contractor can decide whether or not to oblige. If you want to learn more, check out my other blog about spotting unreasonable contractor delays.

4. Characteristics of a Good GC: It’s difficult for a homeowner to validate the quality of a contractor. There is really no way for a client to truly determine some important details about the contractor prior to hiring them: Are his workers responsible & well trained? Does he or she take pride in their work? Does he take too many jobs at once and get overbooked, causing some of his projects to get delayed? Are they honest about extra costs? This list goes on and on. The contractor knows all these details about themselves but will certainly only tell the client about their good qualities and not their negatives.

Related: 5 Steps To Take Before Hiring a Contractor

5. Contractor Disputes: The homeowner bears the majority burden if there is a contractor dispute.  If a client thinks their contractor is not performing up to their standards, they can certainly fire the contractor or stop paying them. But then they will be stuck with a dirty, dusty, half-finished renovation project. I don’t know many people who can live with a half-finished kitchen for very long. In addition, the contractor will still want to get paid for their completed work and can take actions to make the client pay. Finally, if a homeowner fires their contractor, it will be challenging and stressful to find another contractor to finish the job.

6. Confusing Construction Contracts: Contractors use a legal work agreement (contract) that is likely skewed in their favor.  They use this same contract for every project, so they are very familiar with its terms.  Homeowners rarely deal with legal contracts for construction and therefore probably don’t know what important items should or shouldn’t be included in the contract.  Of course, a client can hire an attorney to review the contractor’s agreement, but very few people want to pay expensive legal fees for this. If you’d like to learn more, here are 10 Key Points To Look For In a Construction Contract, written by construction attorneys.  

7. Legal Recourse: If a homeowner has a problem or dispute with a bad contractor, or has fired a contractor for not performing, there is no simple way to report a bad contractor or resolve a contractor dispute.  You can file a claim with the contractor’s Surety Bond, which will be a long and involved process and you may or may not ever get payment. Alternatively, you can report a contractor to the contractor state licensing board or Attorney General. Depending on the state, their staff might help you try to mediate a resolution with the contractor, but this won’t happen quickly. Finally, you can sue a contractor in either small claims court or superior court, depending on the amount of your claim. As you can see, these methods are stressful, challenging, and time-consuming, with no guarantee of a positive result.  

Reno Tip: Always make sure your contractor has an active and clean license with the state licensing board

8. Power of a Contractor: If you must sue your contractor in small claims court, it’s certainly going to be time-consuming and stressful.  If the case is larger and you have to sue them in Superior Court, it will get expensive because you’ll have to pay attorney fees.  On the other hand, if you withhold payment from a contractor for any reason, they have Mechanic’s Lien rights.  Rather inexpensively, they can file the necessary paperwork with the County Recorder, which will put a lien on your property and make it impossible to sell or refinance it without paying off this permanent lien. In order to get the lien removed from the title, you will have to hire an attorney and go to court. 

Crucial Steps You Must Take To Avoid a Renovation Nightmare When Working With Contractors

So, as you can see, there are quite a few complexities between the homeowner and contractor relationship.  Understandably, these potential issues can make the prospect of renovating a daunting experience.  When working with contractors, it’s important to do prepare for your project as best as possible. There are a few things everyone should be doing before, during, and after a remodel to give them the best chance of having a good experience and not a contractor dispute. 

By far, the most important thing you can do is take several important steps before you select and hire a contractor to help ensure you don’t end up with a bad contractor that would exacerbate the issues discussed above. Hiring a reputable, honest contractor gives you the best chance of having a positive experience. Check out my other blog detailing the steps to take in order to screen and find a great contractor.

Briefly, important steps include checking the contractor’s license is active and valid, verifying all necessary forms of insurance, checking online ratings/reviews, and calling at least three references. If you want to be more thorough (to lessen the likelihood of a contractor dispute), check out our GreatBuildz Vetting Process, which we perform when vetting potential contractors for our network.

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When you’ve found a good contractor, it’s a good idea to set out your expectations of them upfront. In order to achieve this, Greatbuildz requires all our contractors to sign a “Contractor Code of Conduct” which lays out our requirements of how the contractor will interact with our clients.  You may want to review our Code of Conduct and ask your contractor to agree to these kinds of commitments before hiring them.

Once you’ve hired a contractor, you’ll want to keep a close eye on the project and watch out for any red flags, so you can address them as quickly as possible. 

  1. Make sure the crew is working on a daily basis. If the contractor starts missing full days and making excuses, that’s a red flag that you could start to encounter delays. 
  2. If a contractor requests more money earlier in the project than anticipated, that could be a red flag that they are having financial issues.
  3. If a contractor is unresponsive or slow to respond to you, it could be a bad sign they are either too busy with other jobs or there is some ‘tension’ or other issue keeping them from communicating with you. 

The homeowner should check on job progress a few times per week, and ideally once a week together with the contractor or their project manager. When the contractor is there with you, that’s an opportunity to ask questions and address issues.

However, it’s a good idea to view the project progress alone and take your time looking carefully at the quality of their work.  Sporadically, you should pop in on the job in the middle of the day unannounced…just to ensure a full crew is working.   

Reno Tip: View the project progress alone and take your time looking carefully at the quality of their work

Make sure to do your part in keeping the job on schedule by choosing and ordering materials in a timely manner so the contractor isn’t waiting on you.  Also, make sure to keep an ongoing ‘punch list’ of issues you see and provide this to the contractor throughout the job.

You should bring up any quality concerns as soon as you see them and let the contractor address them immediately instead of waiting till the end. In order to achieve this, the homeowner should be checking the quality of the renovation on a regular basis, not just when the project is almost finished.   

Working with contractors can be difficult and stressful in general. That being said, if you hire a good contractor, it’s unlikely they would perform shoddy work. Unfortunately, a bad contractor often doesn’t really care about the project results and only cares about getting paid and moving on.

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So, if you’re concerned your contractor might not be doing quality work, you might consider hiring a home inspector, ‘retired contractor’ or similar unbiased expert to check the work before making your final payment to the contractor.  You should require that the contractor make any repairs before providing them the final payment.  You can get more information about how to deal with a contractor’s poor workmanship at this blog.

Finally, I strongly suggest homeowners remember to have realistic expectations of their contractors.  Even with reputable contractors, you should expect most projects to take longer and cost more than expected.  It is worth noting, however, that there is a balance between reasonable and unreasonable delays & extra costs. Although a 10-20% delay or project cost overrun is normal with even good contractors, 50-100% delays or overcharging is not normal and could be indicative of a dishonest or mismanaged contractor. 

Make sure you’re not missing anything, and check out all parts of our Bad Contractor Series:

Part 1 –  How to Spot a Bad Contractor Before It’s Too late

Part 2 – Dealing with Contractor Delays

Part 3 – Contractor’s Poor Workmanship: How You Can Deal With It

Part 4 – How To Deal With Contractors Overcharging You

Part 5 – 8 Secrets About Working With Contractors

When it comes to working with contractors for your project – GreatBuildz is simplifying the contractor search. GreatBuildz is a free service that connects homeowners with reliable, thoroughly screened general contractors and provides project support from start to finish.

Call now (818.317.3567) to chat with a real person about your next renovation project or visit our website for more information: www.greatbuildz.com

Check out the GreatBuildz Guide Blog for more construction tips and advice for any type of home remodeling project!