Moving Forward With Your Project
After you have chosen the right contractor to complete your home's renovation, it's time to take the next step. If you have never hired a professional to do a renovation, or have had a negative previous experience, here is some information that can help you cover all your bases. This article adapted from The Canada Mortgage and Housing Corporation website will help you as you put together an agreement with your contractor for the renovation of your home..
Getting Estimates or Proposals
There are no hard and fast rules about how many estimates you should get. Some consumers prefer to get a number of bids before making a decision. Others find that after the interview process, there is one contractor they strongly prefer and only ask that contractor to submit a formal written estimate or proposal. What really matters is that you end up feeling that you have adequate information to make the right choice.
For a large project, it can take 2-3 weeks for a contractor to prepare a estimate. Ask the representative to submit it in person so you can discuss the details with them. Read all the documentation carefully and make sure that everything you ask for is covered. The estimate should include everything that the contractor will have to do in order to complete the job. Assume that anything not listed, is not included in the price. As well, make sure the contractor provides you with a construction schedule.
Don’t automatically choose the contractor who gives the lowest estimate. It may be unrealistically low. The contractor may not have understood the project, may be underestimating what it will take to complete the work, or simply trying to get a price advantage over the competitors. In any case, you could risk unexpected and additional costs, or you may end up with a job that leaves you unsatisfied. Remember, renovating your home may uncover hidden problems, so make sure that you allow a contingency budget to cover unforseen costs.
Look for a fair price. Factor in any differences in what the contractors are offering and the skills they bring to the job. Then add the intangibles: reputation, willingness to make suggestions and offer advice, the likelihood of standing behind the work, personal recommendations. Choose the contractor you feel will give you the best overall value for your money.
Do not be tempted by a contractor who doesn’t have a business address, doesn't want to give you a written contract or offers a discount if you pay cash without charging appropriate taxes. This type of underground transaction involves many risks and pitfalls that may offset any savings to you as the homeowner. If a professional will cut corners with the government, it's a sign that they may not always run their business with honestly with integrity.
For example, contractors who insist on cash may be unlicensed and uninsured; and without a written contract your cash advances are unprotected. They could neglect to get the required permits or inspections. Product warranties may not be valid if a recognized contractor does not install the items. A cash deal may leave you with no legal recourse if something goes wrong or the work isn’t satisfactory, or if the contractor walks off the job before completing the entire project. For your own protection and peace of mind, it’s best to deal in a legal and responsible way — always get it in writing.
A detailed written contract between you and the contractor is essential to any renovation or home repair project, details of even the smallest job should be put in writing. For more specific information as to what should be included in a contract, making payments and to see an example of a contract; refer to the About Your House link titled "Sample Renovation Contract" on the CMHC website
Getting Along With Your Contractor
Once the job is under way, you’ll see a lot of your contractor and the crew. The job will go much more smoothly if there is mutual respect and you co-operate with everyone involved. Talk with the contractor and find out what is expected of you throughout the duration of the project, such as leaving an empty driveway so the delivery van can bring in the new bathtub, required deposit, time schedules etc.
In spite of a clear, detailed contract, disputes may occasionally arise for any number of reasons. Good communication can go a long way in settling any disagreements between you and your contractor. As a first step, you should sit down together to discuss the problem calmly and seek a solution that you both can live with comfortably. This is usually the fastest, least expensive and ultimately, most satisfactory approach.
Try to be reasonable. Don’t overreact if something goes wrong with your renovation or if your expectations are not met immediately. Contact your contractor for more information and allow sufficient time for a diligent response. As well, issues like bad weather and backordered components are out of the control of your contractor and can delay the job, so leave a little leeway in your schedule for anything that arises.
Liability and Insurance
It’s important to make sure the contractor has workers’ compensation and third-party liability insurance for all the people on the job and damage they may cause ($2 million is standard, this may not be the case in rural areas). Your local homebuilders’ association is a good source of information for what is standard in your area. Don’t just take the contractor’s word — ask to see a certificate and check to make sure it’s current. Don’t accept or assume any liability for the contractor or trades people.
As for your liability, your homeowner’s insurance policy may cover you during a project done by a renovator but you should always advise your insurance provider of any renovation work ahead of time. However, if you’re acting as your own general contractor and employing trades people, your policy won’t automatically cover you. You’ll have to ask your insurance company for temporary coverage, which will likely involve a small extra premium. Again, make sure any tradespeople you hire have their own insurance.
Whether you are making changes to your home for you and your family or are renovating to increase the value of your house in order to sell it , renovating your home is a huge investment that can increase its' value in a big way. Be sure to find the right contractor to do the job you want, and be sure to take all the necessary steps and precautions to ensure that you have a comfortable and successfull working relationship with whoever you choose to do the renovation.
*Excerpts and information adapted from The Canada Mortgage and Housing Corporation website.
The Hisey-McDermott Team
Century 21 Miller Real Estate Ltd., Brokerage
467 Speers Road, Oakville, ON L6K 3S4
p: 905-845-9180 x 230