Red Flags to Look For When Selecting a Remodeling Contractor

  1. The remodeler’s online reviews are mostly negative ones.
  2. They cannot show documentation
    1. they are a registered business
    2. they are currently licensed as a contractor to do the kind of work you need
    3. of current insurance coverage for general business liability and the insurance is of an amount satisfactory to you
    4. they provide workers’ comp insurance for their employees and other workers on your project that they may be liable to cover
      (Workers’ comp helps protect you as well as the business owner and worker.)
    5. proof of applicable licensing, business liability insurance, workers’ comp, etc. from their subcontractors
      Not every remodeling specialty is required to be licensed in all jurisdictions
  3. They are unwilling to provide you the street address of the business
    It is okay if they use a PO Box for mail and it is okay if they work from their home as many small and midsize remodelers do, but you want to know they are indeed more than a mailbox should you ever need to find them
  4. They will not agree to provide you with lien waivers from the remodeler and subcontractors, materials and product suppliers.
  5. They do not pull building permits for projects that require permits
    Not pulling a permit is illegal and means your work will not be inspected to assure that it meets building code 
  6. They ask you to take the permits out in your name
    If the permit is in your name and the work does not pass inspection, you are responsible for it passing inspection. If the remodeler takes the permit out in their name, they are responsible for it passing inspection
  7. The remodeler
    1. uses questionable (unfair, misleading, unethical, illegal, etc.) marketing tactics such as offering a Free TV, “$1,500 or 15% off” of a project when you have no way of knowing what the project would normally cost without the discount.
    2. if you got a flyer or coupon and it says to present it before an estimate is given to you, you surely don’t know if you are getting a discount or just getting had
    3. puts “undue” pressure on you to make a purchase decision immediately without giving you the time you need to think about it
    4. does not advise you clearly and in writing the fact that on consumer contracts — such as most remodeling projects — there is a “cooling off” period (often 3 days) during which time you have the right to change your mind
      Some unscrupulous remodelers may tell you, but ask you to sign a waiver of your right
  8. The remodeler can’t or won’t give you a reasonable number of client references for you to talk with, or the people they give you are difficult to contact or can’t be found
  9. The remodeler wants the full payment up front
  10. The remodeler will not allow a portion of the project to be paid after completion.
  11. The remodeler wants the payment made in cash, a check made out to cash, or to someone or a company other than the remodeling firm you are hiring.
  12. The remodeler gives you a price that is much lower than those you are getting from other remodelers you know to be legitimate and reputable.
    This could mean: the remodeler is “low-balling” and will find a way to increase the price later; the remodeler didn’t estimate the same project (same quality, quantity, materials, craftsmanship, etc.) as the others; or the remodeler doesn’t know how to estimate and might not be able to complete the project when they find they have priced the project too low.
  13. The remodeler appears to be on shaky financial footings.
    This could mean they may not be in business long enough to complete your project, pay their suppliers or stand behind their work.
  14. When you try to confirm business address, references, insurance, business license or other information the remodeler has given you (and you should verify it), things do not check out.

If the remodeler you are considering raises NONE of these Red Flags, proceed to the “Yellow Flags.

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