In 2012, BBB received more than 6,000 complaints against general contractors. While there are many trustworthy and reliable contractors, there are always those unscrupulous few that end up charging too much and doing too little, or nothing at all.
BBB advises consumers to follow this checklist before choosing a home contractor:
- Be picky and have lots of options. Seek at least three bids from prospective contractors based on the same specifications, materials and labor needed to complete the project. Homeowners should discuss bids in detail with each contractor and ask questions about variations in pricing. The lowest-priced contractor may not be the best.
- Make sure they are certified and insured. Check the company out with the Contractors State License Board. Ask whether the company is insured against claims covering workers’ compensation, property damage and personal liability in case of accidents. Obtain the name of the insurance carrier and call to verify coverage. Check with local authorities to find out whether permits are needed before proceeding with the work. The contractor also should be aware of any required permits.
- Get everything in writing. Any projects over $500 require a contract. Ask whether the contractor will provide a lien waiver upon completion of the job. A lien waiver is a statement by the contractor that all suppliers and subcontractors have been paid for their work. Read and understand the contract before signing. Get all verbal promises in writing. Include start and completion dates in the contract.
- Make sure payment terms are clear. Make sure your contract entails the total cost of the project, when payments are due and any payment penalties. In California, your down payment should never exceed 10 percent or $1,000, whichever is less. The only exception to this down payment maximum is if the contractor has obtained a Blanket Performance and Payment Bond, which can be viewed on the contractor's license. If this bond is secured, the contractor can ask for the entire contract amount upfront.
As a business-supported nonprofit organization, Better Business Bureau's mission is to promote an ethical marketplace. BBB sets standards for ethical business behavior, helps consumers identify reliable businesses through BBB Business Reviews, sets standards for truthful advertising, evaluates and provides reviews of charities, educates consumers, and offers dispute resolution services. More than 87 million consumers rely on BBB for Business Reviews, consumer tips and scam alerts. To learn more, please visit www.necal.bbb.org.