Tucson Homeowners Alliance
Tips for hiring a contractor

"If you don't know jewelry, know the jeweler." - Warren E. Buffett

When you need help
Consumer protection programs consistently list home improvement scams and problems with contractors as the top complaints from home owners. The Arizona Registrar of Contractors reported dealing with 2,623 complaints about unlicensed contractors alone during FY 2003 involving payments by home owners of more than $25 million. That doesn't even count the complaints against licensed contractors or product and service scams.

Your relationship with your contractor is important and not one to be entered into lightly. It can make all the difference between a pleasing experience with good, value-added results and a disaster. Look for a contractor just as you would pursue other personal relationships.

Contractors to maintain, repair, remodel or add on to your home come in many kinds: general contractors, masons, carpenters, electricians, plumbers, roofers, heater and cooling contractors, painters, landscapers, and many others. For each trade, you can hear dozens of horror stories from home owners, trades people and government agencies.

Here are a few thoughts from a variety of sources to stimulate your thinking and help you get started in getting what you want without getting burned. With this, you can learn the easy way: from the experience and mistakes of others rather than your own.

Disclaimer. This is a compilation from many sources presented as a public service to give you ideas, issues and questions to explore. It is not legal or professional advise – for that, of course, you should always consult a lawyer or other appropriate professional. You may use this information only with the express understanding and agreement that you are responsible for your own interpretations, actions and consequences and will hold the Tucson Homeowners Alliance, its members and affiliates harmless from the consequences. Thank you.

Some thoughts for success

Be cautious of those who approach you for work
Homeowners are targets because they are most likely to have money. There are lots of con artists of many stripes posing as home fix-it services or contractors. As a homeowner, you might want to become well informed about this before hiring anyone to do anything to your house. A few simple telephone calls or visits to web sites can help you avoid losing a lot of money, not to mention serious damage to your property. Authorities warn that great caution is advised in circumstances like the following:
* Someone who is going door-to-door soliciting work.
* Anyone who approaches you for work rather than you approaching them. (This may be fine for basic supervised yard work, but very dubious for higher levels of skill or money.)
* Offers of a good price because of excess materials from another job and any other variation on this old game. (If it's not an established business, you have no recourse if things don't work out.)
* Warnings of urgent repair work needed to save your house or comply with some kind of law.
* Reluctance to show you good identification - including valid business name, address, phone number and contractor license number - at the start of the conversation.
* A vehicle that does not have a company name and contractor license number on it.
* No business card with such information.
* No business information that you can confirm in the telephone directory.
* A request to do work without a written contract or work order on pre-printed business stationary with the business name, address, phone and contractor number.
* No written warranty or guarantee for the labor.
* A request to be paid in cash.
* An offer to take you to the bank so you can withdraw money for payment. (This is, more likely, an offer to be taken to the cleaner's.)
* Any request or inducement to be paid in advance in any way for any reason (e.g. bond, deposit, trust money, surety, advance, up-front payment for materials or products, etc.)
* Pressure or inducement of any kind to make a decision or start work immediately. (Even if there seems to be an emergency, for example a broken water pipe, you can generally simply shut the appropriate system off, e.g. the water at the meter, the electricity at the breaker box, and use the phone to get information and prompt service from a legitimate business.
* Any deal that is suspicious or too good to believe. (This is generally a sign that it should not be believed.)
* Flyers that do not include a contractor license number. (By law, that is required on all advertising by licensed contractors.)
* Unlicensed contractors who try to get around the law by subdividing a job into smaller separate jobs of less than $750 per job. (This is for his benefit, not yours – and likely to be illegal).

If you have any inclination to speak with someone who approaches you in this way, ask them to provide full identification, including photo identification and make and model of vehicle and license plate number, before you start talking and write it down. Take care not to let such people in your house and don’t leave yourself vulnerable to attack. Report such suspicious activity to the police immediately and also to the Arizona Registrar of Contractors.

Learn how things work
* Try to think of various sources available to you in order to learn how to be more effective in hiring and working with a contractor, for example, people you know who have hired contractors or people who may know such people.
* Contact the Arizona Registrar of Contractors (RoC), a state consumer protection agency, on-line or by phone. For simple repair and maintenance work, print or request a copy of their one-page publication, "Protect Your Investment: Hire a Licensed Contractor." For more complicated and expensive work, print or request a copy of their publication, "Hiring a Licensed Contractor," a six page booklet with some good advice.
* See the websuite of the Federal Trade Commission for "Facts for Consumers - Home Improvement."
* For additions to your home and much more expensive jobs, it might be a good idea to take advantage of the many resources of the Tucson Pima Public Library, which has quite a few detailed books on hiring and working with a contractor, as well as a wide variety of home improvement topics. The library system has many branches around the county (see the blue pages of your phone directory under city or county for Library) and a web site (click above).

Ask Around

* Identify some good prospects for a contractor. Look for good reliable contractors by asking people who might know. Ask about companies they have used and liked. Also look for someone who can help you in the selection process by answering questions. Try to obtain the official company name, address, phone and contractor number. If they don’t have the contractor number, you can easily find it in the yellow pages.

* Talk with friends, relatives, neighbors, co-workers and anyone else you can think of who may have used a contractor of the kind you seek.

* If you know people in the building trades, real estate or property management, try talking with them.

* Join a non-profit community organization that can help with things like this.

Do a Background Check

*Do a preliminary check of your list of possibilities. Take advantage of public sources that keep records on contractors.

* Contact the Arizona Registrar of Contractors on the web or by phone (in the blue pages of the telephone directory under “State”). The Registrar also has a 24-hour hotline to check on contractors, (602) 542-1525. Outside the Phoenix metropolitan area, call toll-free (888) 271-9286. First, check to see if the contractor is licensed, then find out what their record of complaints looks like. As stated on their web site,

“In Arizona, a contractor must be licensed through the Registrar of Contractors (ROC) to legally perform construction, home repair and remodeling jobs that require a building permit or when the total project cost is $750 or more. When someone contracts without a license, they endanger the health, safety and welfare of the public, undercut licensed contractors who operate legitimately and lawfully, and hurt the entire construction industry. Also, when a homeowner hires someone who is not licensed, they have no recourse through the ROC complaint process or the Residential Contractors' Recovery Fund.”

If you hire an unlicensed contractor, you are taking a big risk. The results are unlikely to be covered by insurance and, even after you sell the house, you may be legally liable for any resulting faults, damages or injuries. Before doing this, you might want to call the Registrar of Contractors and talk about that first. Ask them to tell you a few stories about disasters others have experienced with unlicensed contractors and what added assurance the state licensing process affords you.

  The record of complaints can give you important information. Don’t worry about a long-established company that has one or two complaints - no one is perfect. However, if and how quickly they resolved the complaints can be an important consideration. If they have lots of complaints, that’s not a good sign. If they were taken to administrative court or civil court and lost or had their license suspended or revoked, that could be a big red flag.

* Also contact the Better Business Bureau online at www.tucson.bbb.org or by phone to see if there are any complaints listed for them.

* You could also do a search of court records on the web. Do a search for your local justice court and superior court.

* You might also check to see if the contractors have web site sites. If they do not, this is not a strike against them, but, if they do, a website could provide some interesting information.

* On the basis of this work, narrow your list to the top three to five candidates.

Telephone Prospective Candidates

* Prepare a list of preliminary questions and issues to discuss.

* Call your top candidates.

* Describe the kind of work you want done and ask if they do that kind of work and would be interested in working for you. How many jobs of that kind have they done during the past year? If you want a piece of equipment repaired, like an air conditioner or heat pump, determine if they are approved or certified by the manufacturer to do that. Will the technician who comes to fix it have training, experience and be certified for the system you have? If your system is under warranty, double check to be sure they still are approved by the manufacturer to do warranty service and that they will bill the manufacturer for the work, not you.

* Ask about the work you want done to get a feeling about their knowledge and experience in that. If there are key questions that you have about the project, go ahead and ask them. Ask if any special knowledge, experience, equipment or training is needed for any aspect of your job.

* If your job is simple and direct, you should ask about costs. For more complex jobs, someone will likely need to come to give you an estimate.

* Tell them that you are shopping for a good contractor. Ask them what special qualifications they have for this job. While you’re at it, ask if they have any suggestions for how to choose a good contractor for this work and what questions you should ask other companies. If they are well-qualified and competitive, you might be surprised to get some good helpful responses.

* Who are the owners or principal partners in the business? What are their backgrounds, experience, education? If they have college degrees, what are they, when, in what field? How long have they been in business? How long at this location? How long have they been in business under their present name? Have they ever been in business under a different name or location? Have they ever been involved in a bankruptcy? Who would be doing the actual work for you? What are their backgrounds, training, experience?

* Be cautious about businesses that make vague claims like “30 years experience.” Ask for details. In some cases, what they mean is that everyone in the shop has a combined total of 30 years experience, not necessarily in the field they would like you to believe.

* Are they licensed, bonded and insured? Get details to be sure. For example, what licenses do they have? What are the license numbers? How long have they had those licenses under this business name? Have they ever had a license suspended or revoked? Have they ever had a ruling against them by the state Registrar of Contractors or a court (civil or criminal)? If they are licensed in Arizona, they are required to have personal liability and workers' compensation insurance as part of the licensing process, but you might as well double check to be sure those are currently in force. However, do they have additional insurance coverage for possible damage to your property or errors in performing their work?

* Thank them for their time and tell them you will call back.

* Compare the answers you get from different contractors. Talk with any advisors you may have. For simple jobs, you may be ready to select a contractor at this point. For a more complex job requiring bids and site visits, narrow your list to the top three.

Invite Bids

* Call your top candidate(s) again. For simple jobs, ask any additional questions you may have and schedule the work.

* For more complex jobs, invite them to come to your house or job site and make an estimate. You should get at least three bids in writing from different contractors.

* Plan your interviews in advance. Write down questions. Create a form, if you’d like.

* When someone comes, go over your project in detail. Be sure to express what you want and why. Discuss it and ask them for thoughts and recommendations. Discuss how they would do it and why. What parts of the project may be tricky or challenging? What problems may come up? How can you get better quality or results? How can you lower costs? Be sure you understand what they have in mind. In the process you may pick up some useful ideas and information, and you will get a better feel for how much they know and how good they are.

* Find out more about the company’s representative. What does he do in the company. Is it limited to bidding and marketing? What is his experience in this work? Will he be doing any of the work?

* Ask them to detail labor and material costs for each part of the job, so that you can compare apples to apples and oranges to oranges. Go over the bid with them in detail, so that you understand it. Ask about materials, construction processes and components. Ask who will be doing the work, who will be supervising and what their qualifications are with respect to this kind of job.

* Discuss scheduling. When can they start? When will they finish? If it is important to you, what will they do to guarantee fulfilling the schedule?

* Before they go, ask how many projects like yours they have done in the last year. Ask for at least three references of clients with similar projects. Ask if you can visit a current work site.

Check references

* Be sure to call the contractors’ references. Explain who you are and why you are calling. Ask if they would be willing to talk with you about their experience with the contractor. Be nice - you are asking a favor. Try questions like...

* Were you satisfied with the work done by the contractor? How much so?

* Was there anything you weren’t satisfied about?

* Was work completed on schedule?

* Did you pay anything more than the original bid? Were there any unexpected or additional costs? Why? What were they?

* Did the contractor keep you informed about progress and problems along the way?

* Did workers show up on time? Were they reliable? Did they do good work? Did anything have to be fixed, changed or done over again? Did they clean up after finishing the job?

* Would you recommend the contractor? Would you use the contractor again yourself?

* How did you happen to choose this contractor? Were you referred by someone? A friend? Did you know contractor beforehand? Is he a friend, relative, partner? Do you have some other relationship with him? Has he done any other work for you since then?

* Do you mind if I visit your home to see the completed job?

Compare bids and bidders

* Many people find out the hard way that cheap home improvements can actually detract from the value of their house rather than adding to it. Poor modifications or repairs can make your home less attractive to you, as well as potential buyers. Good choices are the key to home improvement.

* Don’t just choose the lowest bidder. Low price does not mean good value. Sometimes, it’s the worst possible alternative. Those who bid on things have learned how to play games – and some of them do. If contractors have equal access to materials and labor, then how can one offer a lower price than the others? They can only do that by using cheaper materials, cheaper processes, cheaper labor or an escape clause in the contract. Is that what you want? Is the bid realistic? Does the low bid reflect greater ability and efficiency or just cheap results that will come back later to haunt you?

* Ask for explanations for price differences between bidders.

* If someone offers you a particularly low bid, it would be a good idea to ask for specifics on how they can do that. Look for “escape clauses” in the contract they offer you that provide them with ways to evade the price they have offered. You might want to ask their competitors the same question and give them a chance to explain too. You might learn something.

* Ask for copies of guarantees and warranties. Read them carefully and compare them. This says a lot about a contractor and can be an important part of your decision.

Use a Written Contract

Contracts can be very complicated. Ask contractors for different options. Some work is simply charged at a standard rate, or standard labor rate plus materials and products. More complex projects can be done at a fixed price or on a “cost plus” basis.

* If you are primarily concerned about limiting your cost, consider a fixed price contract, where the contractor agrees to do a specified job at a specified cost. However, be aware that contractors will want greater freedom to cut their costs as much as possible and this often means lower quality and greater expenses for you later in maintenance, repairs and operating costs.

* If you are most concerned about the quality of the results, then a “cost plus” contract may be the best for you. You agree with the contractor that he will work with you in making the best choices for materials, products and construction, and you will pay him for these plus an additional amount (often 10% more) for his services. That way, you are assured of getting what you want and he is assured of his fee – and has no motivation to cut corners without your knowledge and consent.

* If your job is complex and expensive, you may want to seek legal help on the contract. If there are any problems, the contract is the only thing you have to protect yourself legally. If it’s not in the contract, don’t count on it happening. The pubic library has books on contracts too, to give you more ideas. You can also access the Superior Court Law Library and the University of Arizona’s law library at the College of Law.

* Carefully consider key considerations of quality versus costs very carefully, including such important issues as health, safety, long term maintenance and operating costs, repair costs, cleaning, practicality, functionality, durability and so on. Always ask about guaranties and warranties.

*All too often, shaving a few dollars for lower quality will add many thousands of dollars in long term operating, repair and maintenance costs. For example, cheap insulation poorly installed will cost less in construction but add many times more in long term cooling and heating costs. The standard asphalt shingle roof will typically last only 10 - 15 years in Tucson, at which time you will need to replace it at about twice the cost. However, a good standing seam metal roof may cost you up to twice the price but come with a 50 year warranty. Not all double pane window units are equal – some have insulation values not much better than single pane windows. You might want to specify a U-value for the complete window unit (glass and frame), as rated by the National Fenestration Rating Council (e.g. no greater than .33). Typical bathroom sink faucets cost contractors less than twenty dollars, but it will cost you $40 just to get a plumber to your door to fix it later. For about twice that price, you can, yourself, purchase a faucet with a lifetime warranty on both the mechanism and the finish. What a deal!

* Discuss construction considerations like that with your contractor in detail, including procedures, processes, materials and products. Then specify what you want, in detail, in the contract.

* Be sure that the contract states guarantees and warranties, including workmanship, in writing. Be sure that these are favorable to you and don’t have “escape clauses” for contractors to avoid responsibility for their work.

* Agree on appropriate penalties for violating the contract. Specify penalties for violating certain clauses, like starting and completion dates and standards of quality and performance. Without penalties, a contract doesn’t do you much good, does it?

* Starting and completion dates. Discuss the schedule. If it is important to you, ask what they will do to guarantee the schedule and what penalties they are willing to put in the contract in case they don’t.

* Review the contract carefully. Make sure you understand the terms of the contract before signing. With a complicated or expensive contract, it might be a very good idea to consult a lawyer who is experienced in such contracts.

* Be careful of signing anything. Any proposal or bid that you sign may become a legally binding contract. By Arizona law, you may the right to cancel a contract within three days of signing it. Call the Attorney General Consumer Fraud line or your attorney for information.

* For lots of additional information, see the Registrar of Contractors website.

Obey local laws – get a building permit

* If your project involves construction, electrical or plumbing additions, or structural changes, it is likely to require a building permit and inspections to assure compliance with local building codes. These codes are not just government “red tape” – they are for your safety and protection.

* They are also serious legal requirements, so do not try to avoid them. Failing to comply with code requirements not only may subject you to big fines, it may also result in tearing work down and starting over again, big financial losses when you try to sell the house, and liability for damages to subsequent owners.

* For Tucson and Pima County, look in the blue pages under “Development Services” and talk with them early in the planning stage about the process. It will involve submission of plans, which they review and inspections during and after construction. In the process, you can get good information and advice too.

* This does not cost very much and there is no good reason to want to avoid complying with the law. A legitimate contractor will not suggest that you try to avoid this requirement or that you, as the homeowner, should sign or obtain the building permit. If a contractor suggests that you do, it may be a sign that you should find another contractor.

During work, watch, ask questions, inspect

* Ask your contractor for emergency contact information so you can call immediately if the need arises.

* One of the biggest problems with construction is failure to inspect properly at appropriate stages. Therefore, it could be very useful for you to watch progress carefully, drop in frequently inspect work and check on progress, set up in your contract specific stages to inspect work with contractor (e.g completion of framing, completion of sealing framing, complection of installation and sealing of duct work, completion of insulation, completion of all work just prior to installing drywall, etc.) If you have friends who are knowledgeable of aspects of the work, ask them to join you. At each stage ask your contractor what constitutes good, high quality work and what should be inspected for. By being there for inspections yourself and asking such questions, you also encourage the contractor to inspect well and thoroughly himself.

* If you make any changes in the agreed work, be sure to do it in writing in detail to avoid misunderstanding (these are generally called “change orders”).

Make payments only for work satisfactorily completed.

* Many experienced people offer this advice: do not pay the contractor any advances. Pay on the basis of work accomplished to your satisfaction. This can be done in pre-agreed stages of completion.

* Be sure to choose stages where the job is complete to a certain specific stage and the project is least vulnerable (e.g after foundation is completed, after roof and walls are completed and building protected against rain, etc.) In particular, do not pay the last 20-25% or more until all of the work is accomplished to your satisfaction. That way you have leverage. If you simply prepay the amount, what are you going to do if something goes wrong, go to court? Many has been the client who pays the bill and never sees the contractor again. If the contractor was licensed, you do have some recourse, but that may take a lot of time and money to pursue an administrative hearing with the Registrar of Contractors in which you may need a lawyer in order to counter the contractor’s lawyer, and then on to a civil suit in the regular court system. If you pay on the basis of work accomplished, you hold the cards.

Inspect carefully upon completion

* Inspect the finished produce carefully. If you are not experienced and this is an expensive job you may want to ask a knowledgeable friend or hire a professional to do this with you. Be thorough: look at everything, test everything.

* Even then, you are unlikely to find everything. Be sure that your contract includes an agreement on a reasonable period of time during which the contractor will return and correct faults.

* Do not make final payment until you are sure everything has be accomplished to your satisfaction. Once they have their money, contractors have been known to walk away and never come back.

How you can help

This is a community process. We welcome your comments, suggestions and participation in compiling thoughts like this and others. Please get in touch with us and tell us what you think of this list and what we can do to make it better. Please be sure you send us your own thoughts and ideas. Tell us about your experiences, good and bad, so that others can learn from them. We'll happily credit your contribution if you like.

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