Hiring a contractor

Deciding on which contractor will build your home is a critical step in making your dream a reality.  There are many things to consider when making your choice.

ROLE OF THE CONTRATOR

The contractor’s role is to control the construction process and manage all aspects of the job from start to finish.  They will work from your floor plans, obtain the necessary permits for construction in your local area, and arrange for materials to be delivered to your site from your local lumber yard when needed.  The contractor will also manage other necessary trades people (excavation, carpenters, electricians, plumbers, drywall installers, etc.) that will work on your home so that they arrive when needed and complete their jobs efficiently and quickly.  All this will be done in a time frame that you agree on and at a quoted cost.

Contractors should be members of the provincial or local home builders’ association which requires them to conform to a code of ethics as well as attend courses on the latest techniques, building code requirements and technologies to remain in good standing.  They should also be licensed to work in your area and you should be able to see these licences upon request.

Contractors should also carry insurance in case of an accident during construction or in the event of a dispute.  You should be familiar with the rules required by your local government, your home owner’s insurance policy and your bank to ensure that you understand the liabilities involved with building a home and how to protect yourself.

LOCATING A CONTRACTOR

It takes more than just looking in the phone book to find a contractor.  A good place to start is often with friends, family or neighbours.  Ask them if the contractor they used lived up to expectations and delivered what was agreed to.  Ask if they had any problems with the contractor and, if so, how they were resolved.  Most importantly, ask if they would hire the same contractor again.  You want to know they have a good reputation and a history of satisfied customers. 

Your local home show can be a perfect place to look for local contractors who do the type of work that you are planning.  You will be able to talk with several contractors and see photographs of their projects while learning about construction materials and getting advice from professionals.

You can also approach the Canadian Home Builder’s Association (visit www.chba.ca). They will be able to put you in contact with contractors from your local area that are members in good standing.

DO YOUR HOMEWORK

Before you begin hiring, take the time to do research.  Go online to familiarize yourself with the materials and local requirements for your job.  You can’t expect to learn as much as the professionals, but by educating yourself you will more likely be able to identify a contractor that may not be fully competent (or even dishonest).  Educating yourself now will also save you time and increase your confidence later when it comes to making decisions like picking fixtures and making choices on items such as flooring materials that will have to be done when construction is under way.

INTERVIEW PROCESS

In order to determine which contractor to hire for your project, the questions should be more than “Can you do the job”?  Contact several contractors and interview them before hiring anyone for your project.  The interview should be your opportunity to get to know the contractor and find out about his work.

Find out how long the company has been in business and their experience in doing similar projects.  They should be able to provide references for previous work, and you should always take the time to contact these references.

Find out how their company is structured.  Is most of the work done by their own employees or subcontracted to others?

Ask about the guarantees they can give you.  Ask the contractor to provide a sample guarantee and contract and read it carefully.

An experienced contractor may be able to offer suggestions on how to get better value for your money and offer ideas on slight changes that will make your projects go more easily.  Would they consider “sweat equity”?  If you feel that you could help with the project – even doing menial tasks like carrying material or cleaning up may be a way to reduce costs.

Does the builder participate in the latest developments in technology for new homes?  Is the contractor familiar with the latest in high-performance heating and ventilation systems or know how to maximize the benefits of passive solar energy on the home?

Is the contractor licensed R-2000 builder and is the company committed to the training this requires?  If the builder isn’t certified and trained, the finished home will not be considered R-2000 and this may affect your selling price at a later date.

Can the contractor predict how energy-efficient the home will be?  An R-2000 home can cost about on third less to operate than traditional construction methods and the builder can use R-2000 energy targets to predict your annual energy costs.

Can the contractor discuss with you the health issues and benefits involved with air quality in your home?  By choosing building materials and surface finishes that contribute to better indoor air quality and using heat recovery ventilators (HRV) to change the stale air in the home with a continuous supply of fresh air, Health Canada surveys have shown a significant improvement in indoor air quality.

All contractors have to build their homes to meet building codes and other requirements.
- how are the homes that this individual contractor builds unique from his competitors?  Some contractors have a specialty that sets them apart in their market.  It may be the ability to do high quality finish work or some other area that has become their specialty above and beyond the requirements.  Find out if they have an area of special expertise and decide if you want or require that skill.

Show each contractor the location where the house will be built and walk thought the project.  Make sure that all contractors receive the same information so that the quotes will be based on exactly the same job.  Talk about possible dates for work to start and be completed.  You should ask at least three contractors for quotes on your project.

The lowest bid is not necessary the best.  Contractors who submit unusually low bids may have made a mistake or don’t know enough about the work to estimate it properly.  Taking advantage of a bidding error can result in serious problems as the project develops.

It may not be scientific, but pay attention during the interview about how you feel about the contractor.  This person you hire will be involved in possibly the most complicated transaction of your life.  You must have confidence in the contractor you hire.  You have to be able to talk with them easily and feel that they understand not only your project but your point of view to it.  Almost as important is whether you feel you understand what they are trying to communicate.  If you don’t understand something the contractor tells you, this may lead to tension later on through miscommunication.  The more complex your project, the more important the relationship between you and the contractor becomes.

If, after interviewing a contractor, you are not comfortable talking with them, or you feel that they didn’t answer your questions, don’t hire them.  Similarly, a request for payment in cash or any type of request that makes you uncomfortable should raise red flags and you should not deal with that contactor.

Be aware that you may have to wait to begin your project.  The best contractors are busy and usually have work booked for the future already.

GET IT IN WRITING

Once you have chosen the contractor for your project, a written contract should be negotiated.  A verbal agreement will not protect you if the relationship between you and your contractor turns sour.  A specific, well-written contract should make clear who is responsible for what, and will protect both you and the contractor.  It should contain such information as the total cost of the project and the method of payment; a complete description of the work included in the price; and how much you will pay in advance and when.  Also included will be who is responsible for getting any necessary building permits; insurance coverage; as well as the start and completion dates.  A complete description of the materials to be used and who is in charge of clean-up or fees for refuse removal is applicable.  The contract may sometimes also include a penalty for each day the contractor goes beyond the completion date.

Because this is their livelihood, many contractors have developed a standard contract form, but be aware that is can be amended to include any of the above items in negotiation with the contractor.  You should have your lawyer review the contract and read the contract carefully before signing.  Both your and your contractor should sign the contract and you should both have a copy.

Whether it is called and “Offer”, “Tender”, “Estimate” or “Contract”, a piece of paper that describes certain work to be done and gives a price for doing it becomes a legal document that is binding both parties once they have signed it.  Do not sign anything until you have read it carefully, understand what is says, are satisfied that it describes exactly what you want and contains everything you have been promised.

Contracts for large jobs should involve installment payments to be made as each phase of work is completed.  Don’t make the final payment until all work is completed.  Hold back 10 percent of the total value of the work, service and materials for 45 days after the work is finished.  This hold-back allows you to protect yourself in case your contractor runs into financial difficulty.  Learn the local laws concerning building contracts. In some locations, you have a legal responsibility to the sub-contractors and suppliers who provide labour and materials.
If these people have not been paid (either by you or the contractor) they may place a lien on your home.  If you hold back 10 percent, this will be the limit of your liability to unpaid sub-contractors.  Sub-contractors can place liens without notifying you, so before paying any money, check the Registry of Deeds for liens against your home.

As construction progresses it may be necessary to alter the contract.  Perhaps you have decided to change the master bedroom by adding a shower or put stone in the entry way.  These new or forgotten items should be written into the contract and initialled.  Remember assurances that are not in writing are not binding. 

There are 5 comments for this article
  1. definition of e-marketing at 17 h 17 min

    Took me time to read all the comments, however I really loved the article. It proved to be very useful to me and I’m positive to all of the commenters here as well! It’s always nice when you can not only be informed, but in addition entertained! I am positive you had enjoyed writing this article.

    • vmartin at 14 h 35 min

      Thank you for your vote of confidence. This was a fairly lengthy post but in our opinion, very necessary. As you proceed with one of the biggest financial commitments of your life, the more prepared you are, the better! We deal with many homebuilders with positive and negative experiences with their contractors. In a perfect world, everyone would be honest and deliver on their promises but proper documentation is essential for even the smallest of jobs.

    • vmartin at 14 h 45 min

      Thank you for your comments, Santo. ICF, or Insulated Concrete Form homes are becoming quite popular. We are actually able to convert any plan to accommodate an ICF foundation or full ICF wall system. This would be done at the point in time when the plan is being ordered. Do check back on our blog or even subscribe to it as I am certain we will be blogging on this topic in the future!

  2. Somer Denzer at 14 h 44 min

    Engineering Jobs in todays market are difficult to come by and this is made even more difficult given that future managers are becoming increasingly difficult to satisfy. Personally, I think that the world economy should see substantial improvements within the next twelvemonths and this should make the situation easier to handle.

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