November 30, 2013 • By Dennis Beaver
Last week, we told you about a Selma reader, Helen, and her husband’s idea of hiring a contractor in their church congregation for a kitchen remodel, aware of the fact that he is in serious financial trouble.
“His bid was significantly lower than any other, and this is attractive, but still I am concerned,” Helen wrote.
We ran the fact situation by construction law attorney Tim Scanlon of Bakersfield, and he commented:
“Your readers could be about to make two of the most common mistakes when hiring a contractor:
• Hiring someone based on a relationship and not skill;
• Basing a decision on price alone.
As Scanlon points out, “A kitchen remodel puts thousands of dollars and your sanity at risk. So it’s critical to check out the contractor with the Contractor’s State License Board. Has he been in trouble with the law, lost his license or bond? Realize that you are dealing with what could become a nightmare.
“The more emotions enter into a decision to hire this contractor, the greater the chance you will be terribly disappointed down the road and out a great deal of money. But even with a good contractor, you are not home free,” the construction attorney warns:
“You still need to be on your toes, knowing how not to get taken advantage of, beginning with the contract itself and the deposit you will likely be asked to make.”
‘10 percent not to exceed $1,000’
“Certain things must be in the contract which is required by California’s home improvement contract law. The contractor should use a state-approved contract which will include at a minimum:
• A three-day right to cancel;
• Notice to the owner of potential mechanics liens;
• Information regarding an appropriate deposit;
• When work will commence and be competed;
• A payment schedule and scope of work outline.
“Often folks do not get a written agreement, or get invoiced for work as they go along, which, in most cases, is a violation of law. All the project expectations must be in writing and signed before work begins.
“If you are doing any type of home improvement where the cost is over $500, then in virtually all cases, it is illegal to ask for more than 10 percent or $1,000, whichever is less, as a deposit. Owners frequently allow contractors to talk them into paying more of a deposit.
“This is especially true with cabinets, as there is a long lead time before the fabrication and installation of the cabinets — usually 6 to 8 weeks. Contractors often want to have the owner put that money up front.
“But there are no exceptions,” Scanlon underscores.
Don’t let the contractor turn you into a contractor
“When you hire a general contractor, don’t let him turn you into a contractor. You want everything run through the general and not to take control of any portion of the work yourself. But this often happens when the homeowner — not the contractor, but the owner — buys new cabinets for a kitchen remodel and they don’t fit.
“Then, you risk costly finger pointing, as the contractor will tell you, ‘It’s your baby!’
“You want one warranty process, so that if something goes wrong, the general contractor is responsible. If everything flows through the general, there is no question.
False economy — Trying to save money the wrong way
“There is a critical path for getting a project completed, and part of what you pay your general contractor is to supervise the work of subcontractors and to make sure that the materials ordered are appropriate for your job and arrive on time. There is a supervision fee built into the contract for these services and it is perfectly appropriate.
“Remember, your general contractor has made a time commitment to finish your job by a certain date. Your’s is not the only job being worked on at that time, so an essential part of a smooth project is in not interfering with your contractor, or causing delay to his other customers.
“When inexperienced homeowners, after retaining a general contractor, start hiring other people or buying material believing that it will save money — they invite scheduling and sequencing problems for the project.
“If materials are not supplied on time or the people do not show up, then you are responsible for the delays and could get sued by the contractor. Avoid this headache by having one general,” advises Scanlon.
So, you’ve signed the contract and work has begun. What if things don’t go so well? What are the signs that you are in trouble and what’s the best way to handle the situation? We’ll have the answers, next time.
Dennis Beaver practices law in Bakersfield and enjoys hearing from his readers. Contact Dennis Beaver.