In this month’s CTV Edmonton ReKnow Experts segment, we talked all about common contractor scams, and five key things to know before hiring a contractor for your home construction project.
Like many of you, we have heard the horror stories of people being scammed by a contractor, or left high and dry half way through a renovation project. Unfortunately, the home improvement industry has taken a few hits because of shady or unprofessional contractors. But we want you to know there are many excellent contractors in the Edmonton area, and our goal is to help you find them.
Here are the five things you need to know when hiring a contractor.
1 – Understand Common “Up-front” Payments
Advance, or “up-front” payments are normal as part of the deal working with a contractor. However, the advance payment should only be a small percentage of the total projected cost of the job he or she is completing for you.
“A typical up-front payment is about 10 per cent,” says Jamie Affleck, Regional Managing Partner, Alair Homes. “This gives the contractor assurance and confidence that you’re serious about working with them on your project, and also gives you peace of mind that you’ve secured the contractor for the job.”
Affleck also recommends that you:
- Never agree to down payments of more than 10 per cent before work starts.
- Insist on a hold back lien per Alberta’s laws to assure your contractor only gets paid after the project is deemed complete. A lien held in trust ensures there is some money available if, in the worst case scenario, the contractor does not pay some of his or her trades workers on your project.
However, to really secure the job it’s important to get a scope of work and contract from your contractor.
2 – Get a Scope of Work and Contract
Any time a contractor does work on your home or property there should be a written contract with a scope of work. In other words, a description of the labour and materials to be provided for your project. It’s very important to prioritize this and not allow your contractor to skip this step.
Affleck says it’s a good practice to go through this process before you begin construction so you and your contractor are in written agreement about the expectations and costs of your project. He also recommends that you ask your contractor what’s NOT included in the contract so your expectations of what to expect are clear.
3 – Prepare for Extras
You may have seen those renovation shows on TV where homeowners and contractors are met with unexpected surprises when they start ripping down walls.
“We don’t believe in surprises, because we always know to expect the unexpected on a project,” says Affleck. “It’s important to be proactive and prepare in advance for the unexpected, the changes, and the extras.”
Extras don’t have to always be unexpected surprises. Extras could be changes or alterations you as the homeowner would like to make as the project proceeds. You may want to change a fixture or a wall colour, and that’s always okay. However, you need to know that these changes could alter the scope of work or materials costs, and you need to know how to handle this.
- Prior to construction, have an agreement with your contractor how extra charges will be handled.
- Always make sure you agree to the changes before they are made. It’s best to agree to these changes in writing as well, and sign off on them.
- Make sure your contractor has planned budget for contingencies so you are prepared.
4 – Beware of the “No Permits Needed” Scam
In the City of Edmonton (and most surrounding municipalities), permits are often required for most types of home improvement projects. You may not understand which permits are required for what, and you’re not expected to. However, your contractor should know this, and they should know that they can’t complete most jobs without one or more permits.
A poor contractor may try and tell you that no permits are needed for your construction project, and that’s a red flag.
Municipalities require you to have permits mainly for your own safety and protection, or to ensure your project conforms to community regulations. Permits are a good thing, so don’t let a contractor say that you don’t need them. If they say this, it’s likely they are just trying to get your job done quickly, get their money and be gone.
5 – Beware the “We’re Working Just Down the Street” Pitch
As urban redevelopment and infill projects continue to rise in Edmonton, you’ll start to notice more construction projects in your neighbourhood. Sometimes, you may even get a knock on the door and when you open the door will be met with a contractor saying he or she is working on a project just down the street.
“This is a common contractor scam to be really aware of,” says Affleck. “A contractor will tell a homeowner that they are working on a project nearby and they have some extra time and/or materials and can come and do some small renos or repairs in your home. I often say if something seems too good to be true in construction, it usually is.”
Affleck says this is a major red flag, and advises homeowners to approach this with caution. In fact, he says it is smart to decline the offer.
If you are in need of some renovation or home improvement work, take the time to do it properly, choose who you want to work with, and protect yourself.
The Capital Region has many qualified and quality contractors. If you do your homework and know situations to be aware of, you can definitely find one for your project.
Do Your Homework
- Look on RenoFind, Better Business Bureau, or ask trusted sources for a personal recommendation.
- Ask for the contractor’s proper credentials, which includes licensing and insurance.
- Ask for recent references. If a contractor gives you references from 25-years ago, that may not be a good sign. You want to know what they have done recently and speak to the homeowner directly. You can also ask for supplier references to ensure your contractor is on solid financial ground and doesn’t have a problem paying suppliers. Your local building inspector may also be able to inform you of any problem contractors they are aware of.