If your budget is over $50,000 strongly consider hiring an architect. Not only for the design and drawings but to oversee the project on a day to day basis. A daily one hour site review by an architect can spot things going wrong early, provide you some guidance, and give you a strong written record of what happened if legal action is necessary. On the other hand a poor architect can play havoc with your budget by requiring changes to the design and project. But overall you are probably better off with a licensed architect on your site. Please note that I am NOT talking about unlicensed designers, construction managers, and a host of other titles that anybody can apply to themselves.

Generally being licensed equates to more accountability and stricter requirements to use that designation.

Corporate credit reports are accessible to the public unlike personal credit reports. For roughly $50 you can get an Equifax credit report on your contractor in seconds over the internet.

What to look for

If there is no credit history then it is probably a new business with no track record and no supplier accounts. This is a danger sign for the home owner. You want a well established well financed contractor with a history of dealing with its customers and suppliers in a fair way. There may be one or two disputes in the credit report of a business with a long history.

such as Toronto Construction Association

you must see proof of insurance and you should verify the policy with the broker, anybody can print what appears to be an insurance CERTIFICATE on a computer

if a contractor comes to your home uninvited saying you need work done on your house – absolutely do not use that contractor. This is one of my few absolutes.

if a contractor says they are really to busy to handle your project – believe them – thank them – and get someone else

Most homeowners have never heard of bonding

but this is really what SEPARATES the real contractors from the guy with a truck

bonds are essentially a form of insurance issued by an insurer or a bonding company. in order to have a bonding ability the bonding company will have investigated the contractor far better then any home could

while you may not need a bond on your particular job, the fact that the contractor can give a bond is a big plus for the financial stability of the contractor and their willingness to deal with problems.

if they do not deal with you properly you can "call the bond" and this will have a severe impact on the contractor’s other projects.

there are bid bonds, 100% performance bonds, 50% performance bonds, it is another reason to hire an architect before the project begins in order to help get through the maze of contract documents

formerly called worker’s compensation

this is vital; the contractor must give you proof that everyone who sets foot on the site is covered by WSIB;

if not there could be huge liability on the homeowner if someone is injured on the site

ask for a list of 10 to 20 past jobs as references, not 2 or 3

CHECK THEM

Go look at jobs that are currently in progress, look at the state of the job for cleanliness and order

Look at the vehicles used by the contractor are they in good order or is the bumper hanging on with duct tape

Go look at the contractors offices, warehouse and shop facilities. If all they have is a the truck that’s in your driveway then consider someone else

get a contract

there are standard form contracts such as CCDC available from the TCA at relatively nominal costs compared to what is at stake

Who does the drawings

make the contractor get it

Be careful of getting setup where the home owner is considered the General Contractor, there are pros and cons to this, be in a knowledgeable position so that you know which is best for your situation.

e.g. if building a new home and the owner is the contractor – THERE IS NO NEW HOME WARRANTY WITH THE PROJECT

in an ideal situation it would be in the sequence contemplated change, quote, change order all changes should include TIME as well as money, every change will impact the schedule and the completion date, get this in writing

get it signed

remember that if you cause the delay then it will cost you

pick out your finishes ahead of time

especially specialty items for kitchen and bathroom

there should be a standard one year warranty as the very minimum;

roofing and specialty items should have their own longer warranty periods and these should be explicitly spelled out in the contracts and the specifications

Ensure that the contractor is a licensed installer of the products to be used so that manufacturers warranties will remain in full force and effect e.g. exterior stucco is a current trend – however the applicator must be licensed with the manufacturer in order to have the manufacturers warranty be valid

Who is reviewing the project on a daily, weekly basis for quality control, most people do not have the time or the ability to do this, consider hiring an architect or engineer to do at least a weekly site inspection and written report

if there is a payment due of $20,000 and a dispute on a $500 item hold back the $500 and pay the rest, delaying the entire $20,000 is not fair and only invites problems

There certainly are homeowners that are just as dubious in there ethics as some contractors

On a major renovation of over $100,000 set up a separate bank account just for the project, it will be of great assistance if there is an unpaid sub-trade and a claim of breach of trust is made.

Also you are free to then show a copy of the bank statement to any trade without revealing your personal finances

know what notices need to be published in the daily commercial news in order to make sure that no one puts a lien on the property

get the contractor to give statutory declarations that the end of the job to ensure trades and suppliers are paid

BEWARE of paying cash, everyone wants a deal, everyone wants a little less, but remember – you never get something for nothing – in order to get a lower price by paying cash you must be giving up something of value

if the contractor is willing to be deceptive regarding income tax, GST, child support, alimony, if nothing else you are giving up the value of an honest contractor

EVADING CHILD SUPPORT IS ONE OF THE MAIN REASONS CONTRACTORS WANT CASH

this is also an avenue for money laundering

the workers will not have WSIB and you could be held liable for an accident at the project rather then it being a WSIB claim

knowingly participating in tax evasion

if there is a dispute then there is no documents are proof as to the work and what was paid and what should have been paid, there is a higher probability of having a dispute with a cash contractor then with an up-front deal

finally you are now a known target for other criminal acts

if you are taking large sums of cash from your accounts your bank is obligated to report these transactions to FINTRAC without telling you and you may now be investigated

e.g. it is a fair bet that a renovation to a house for a marihuana grow operation is a cash deal

what example are you setting for your kids