A consumer has to make sure that a contractor holds the proper license for the job at hand. A licensed contractor will have the proper insurance to prevent a homeowner from facing a lawsuit or a claim against their home insurance policy if there are any on-the-job injuries. Furthermore, a contractor with a license can be disciplined by the issuing government agency. The New York City Department of Consumer Affairs (DCA) issues licenses to home improvement contractors. Master plumbers and electricians are separately licensed by the Department of Buildings. A licensed contractor has to protect their license because that is their livelihood, so they are more likely to respond to consumer complaints than a non-licensed contractor.

Home improvements are expensive, and shopping around is a great idea. Asking a number of licensed contractors to bid on a job is a good way for a consumer to get an idea of roughly how much the project should cost, and how a project should be executed. If one contractor is asking for much more or much less money than the others, it is cause to be suspicious. If one contractor suggests a cheaper construction method that no other contractor believes is safe, then it probably is not a good idea. Do not be shy about discussing what other prospective contractors have said about the price or the nature of the work.

The consumer should ask for references. A call to the licensing agency or the Better Business Bureau will reveal any complaints against a contractor. Asking for references from previous customers is also a good way to see the quality of the contractor’s work, and will help determine a contractor’s timeliness.

Once the consumer picks a contractor, he should enter into a construction agreement before any work begins, and before any money is paid. The contract should include the names of the parties, which is important because the contractor has to be the proper legal entity (corporation, partnership, etc.) that holds the license. The contract should detail the work at hand, the materials to be used, the prices, the work schedule, and the payment plan. The consumer has to remember that oral contracts are worthless, so the written construction contract should detail every material aspect of the deal as discussed by the parties. A construction contract must give the consumer seventy-hours to rescind. For a complicated or expensive project, a consumer should consider hiring an attorney to draft the contract.

The payment plan is a crucial way to protect the homeowner. Payments should not be in cash, and not more than 25% of the total cost should be paid before any work begins. Any initial payments should be tied to the delivery of construction materials to the project site. Furthermore, payments should be split up to coincide with crucial milestones of the work, such as sinking a foundation or installing walls. Make sure that enough money is left to be paid after the contractor obtains the necessary sign-offs from the Buildings Department. A job that is not approved by the government is not complete because the homeowner is exposed to the risk of government fines and penalties.

Hiring a home improvement contractor can be time-consuming, but it is far better to spend the time and energy to find a reliable contractor than to look for another contractor to finish the job or an attorney to sue the contractor. Hiring an attorney to draft a construction contract might also be a good idea.