Every week there’s another story—or reality TV episode—about a homeowner getting ripped off by a lazy, incompetent contractor; or worse, a contractor who cashes the homeowner’s deposit but never actually does the work. According to the Federal Trade Commission, home reno fraud is a growing problem in North America, especially with seniors. These cases typically involve door-to-door salespeople who “happen to be doing work in the area,” and sell the naive homeowner on their scam. The stories are disheartening, not just for homeowners but also for the thousands of legitimate, qualified, legal contractors in North America. Luckily, protecting yourself from shoddy work or fraud is easy with a few safeguards.

Step 1: Shop Around
You don’t walk into a store and buy the first TV you see, and the same holds true for contractors. Once you’ve figured out the basic dimensions of your reno, get at least three written, detailed cost estimates. Don’t assume the low-ball is the smartest buy; the cheapest deal isn’t necessarily the best over the long term, especially in the case of home repair. If one contractor’s price is higher than the rest, find out why. Often it’s because all costs are included in the estimate, rather than hitting you with add-ons once the job is underway.

Step 2: Check References
Hiring a contractor is like hiring any employee; they’re working for you, so before committing to pay, check their references. Any legitimate contractor will gladly hand over a half-dozen references because they know they’ll receive praise. If a contractor balks when asked for references, move on. Besides references, ask to see photos of recent work or even visit the jobsite of a current customer. Finally, check with your local Better Business Bureau to see if the contractor has received any grievance complaints.

Step 3: Get it in Writing
You’ve shopped around and are keen to move ahead with the project. But before hammers start swinging and cheques get cashing, draw up a detailed contract that includes everything from cost breakdowns (materials and labour) to start and end dates, and warranty information. For big jobs—home additions, for example—consider hiring a lawyer to do a final check through.

Step 4: Paying Up
The next step is, you guessed it, money. Typically, contractors ask for about 20 per cent up-front and the rest upon completion. If they’re asking for more, this should send up some warning signals. Remember, it’s never too late to move onto another contractor, although it may cost you your initial deposit. The second caveat, no matter how tempting, is to avoid cash deals. Cash deals can leave you unprotected if things go wrong.
Avoiding home renovation scams is easy so long as you follow these basic guidelines. And don’t worry about feeling like you’re annoying the contractor with these issues; the good ones will encourage questions and do their best to answer them fully.

Some useful links:
Canada Mortgage and Housing Corporation, on hiring a contractor

Get it in Writing, a site devoted to hiring contractors

Canadian Better Business Bureau association, and the American equivalent

—Jay Somerset

Renovating your home can be an exciting and rewarding process. Whether you are making modest changes in one or two rooms, or you are transforming the entire house into a dream of a lifetime, the process can be pleasant and smooth, if you take the time to plan your project carefully.

The Renovation Council of the Greater Vancouver Home Builders’ Association (GVHBA), suggests that homeowners can ensure a successful renovation if they follow these 10 steps:

1. Do your homework. Advance research is the key to getting what you want. Study magazines and books to get an idea of the look you want. Visit friends, family members and colleagues who have renovated recently. Consider your lifestyle and the needs of your family, both in the short and long term.

2. Find out how much you can afford. Once your have a firm idea of the kind of renovation you would like to undertake, it is time to decide how you are going to pay for it. If you are thinking about using outside funds, discuss your borrowing needs and options with your lender. You will probably find that there are many financing possibilities to consider, from personal loans and lines of credit to home equity loans and homeowner’s mortgages.

3. Look for a professional renovator. Ask family and friends for recommendations. Drive around your neighbourhood to see who is renovating, then talk to the homeowners about their project. Most people are delighted to share their renovation experiences.

4. Get estimates. Obtain two or three different bids; more are usually not required. Make sure that you provide all the renovators with the same detailed information. It is important that they bid on the same job, or you will not be able to compare estimates. This information could be a description of the job including sketches, drawings, photographs and measures.For estimates involving major structural changes such as additions or moving interior walls, renovators may also need a set of plans. An architect could be a great help here. The set of plans includes site and floor plans, elevations and detailed drawings. The plan forms the basis for the estimating process and will also be used to obtain building permits. Be honest and open about your budget. The renovator will be able to make suggestions that will help you stay within your budget or provide alternative ideas to stretch your dollars.

5. Check references. Don’t omit this step just because you are too busy or “they seem like the right person for the job.”

6. Work out a contract. Don’t automatically take the lowest bid, unless you are certain that the renovator has properly understood what you want. Sometimes low bids turn out to be the most expensive in the end. When you accept the renovator’s offer, it’s time to write up a contract. Even the simplest of jobs should be outlined in writing because the contract is the basis of understanding between you and your renovator. Before signing a contract, read it carefully. Are you satisfied with the description of the work to be done? Does the payment schedule include holdbacks? Are the responsibilities of the renovator clearly spelled out? Remember that if something is not in the contract, then it’s your responsibility. Have a lawyer examine the contract before you sign it.

7. Plan how you will live during the renovation. Careful planning can greatly minimize inconvenience of living in the midst of a renovation. Talk to your renovator about the schedule of work to be done and how your daily routine might be affected. For instance, will the water be turned off for any length of time? Do you need to set up a temporary kitchen elsewhere in the home? Can major work be done in stages so as you always have a livable space? Discuss your expectations of the work crew and determine the work environment. The crew needs access to washroom facilities, telephones, water and electricity. Decide which areas of your home are off limits. It is a good idea to let your neighbours know that you are going to be renovating. Show them your plans and explain how long the work will be going on.

8. Establish a good working relationship and mutual trust with your renovator. Renovators and homeowners agree that a good working relationship is a vital ingredient in successful renovation projects. Keep lines of communication open at all times. Expect a brief report on the progress of your job at regular intervals, perhaps every evening. Be available to make decisions when they are needed so work is not held up, perhaps costing you more money. Don’t hesitate to bring your concerns to the attention of the renovator.

9. Try to stick with your first choices. Once work is underway, changes should be kept to a minimum. The details of your project are described in the contract, down to the finishing touches, from the basis of both the price and the schedule of your job. Changes could affect both significantly. Your GVHBA member renovator, however, wants you to be satisfied with the final result, and will likely attempt to accommodate any alteration in plans, as long as you accept a possible delay in completion and/or a change in price.

10. Be prepared to enjoy the results. Research, good planning, a professional work crew and open communication and trust, a recipe for a home renovation that you will enjoy for years to come!

Article complements of the Greater Vancouver Home Builders Association http://www.gvhba.org/

for more information please visit their web site.

posted by Nikki Rollins nrollins@homerenovationguide.com