Working with a contractor: How to assure a happy outcome
by Glenn RittHealth & Wealth editors sat with Michael Cole, owner of Cape Associates in Eastham and Barnstable, to gain his advice to homeowners on protecting your pocketbook and rights when working with contractors.
Cole is an engineering graduate of Cornell University, former president of the Home Builders and Remodelers Association of Cape Cod and a current member of the Eastham Planning Board.
In offering his advice, Cole noted that the key is protecting both parties in the transaction. Always consult an attorney as well.
What do you recommend for a homeowner’s first meeting with a contractor?
The operative word is “meet.” Some homeowners, especially those with a second home on the Cape, may actually contract by phone. It is ideal to meet in person and make eye contact. It always gets down to integrity.
You really want to rely on that contractor to give you the best advice, so pay attention to how much he or she volunteers without you having to ask.
You always want to get a firm price. When you get a number back, confirm that it is a firm price quote and not an estimate.
It can be only a single page, but get a contract for everything from siding or a deck to much bigger projects. Massachusetts actually requires by law that a contractor give you a written contract for any project over $1,000. This applies to any licensed contractor.
What should be the absolute minimum detail in that contract?
At the very least, there should be a clear description of the project’s scope, price, schedule and insurance coverage, plus a payment schedule.
That schedule will begin with a good faith down payment, but it should be only about 5 percent for a major contract and progressive payments for work completed and inspected. After those benchmarks are realized, a builder should get the next payment within two weeks. But the work at each stage must be inspected.
If you ever hear: ‘The lumber truck is coming tomorrow. I will need a check,” be wary – that is a gigantic red flag.
Every reliable builder or remodeler gets about 30 days credit at the lumber yard. Segments of work on your house rarely should take more than 30 days, so cash flow for the builder should work out fine. He just has to keep the project moving along.
Are there exceptions to that rule?
For the most part, only if there is a special order – for instance, customized windows, which cannot be returned. So, you do find that builders want a sizeable deposit. They simply cannot afford to show up with those windows or a special front door and hear a customer say, ‘Gee, I don’t like them. I won’t pay for them.’
What about insurance?
A contractor must have all kinds of insurance, from workers compensation to liability. Your attorney will make sure of this. But you also will need insurance. If a builder is working on a house and halfway through construction a plumber’s torch sets it on fire, the builder will be covered. But if there is a thunderstorm and lightning strikes it, and it burns down, that is an act of God. The homeowner will be responsible; thus, he needs coverage too.
Anything else a homeowner should know when it comes to the contract?
Make sure all reference documents are attached to the contract. That would include detailed estimates, site plans and building plans, and any letters and correspondence, including e-mail messages.
As a builder, why do you care if other builders take advantage of a customer?
As a former president and director of the homebuilders’ association, I became very aware that one bad apple affects all honorable contractors. We hear heartache stories all the time that too often place the reputation of home remodelers in the same category as used car salesmen.
In addition, as a planning board member, we constantly have to deal with homeowners and builders. We see difficult stories too often, and as a town official, it is a responsibility to educate homeowners about the perils and pitfalls.
Who is responsible for obtaining the necessary permits?
Always have the builder get the permits. Don’t put your own name on the permit. You would be taking the liability that belongs to the builder. People can get their own building permits in Massachusetts, but you don’t want to. The builder must show the building inspector a license. It puts the state building code between you and the builder.
What else do you offer homeowners to assure a satisfactory outcome?
There is no such thing as too much information and communication between builder and client. In this age of instantaneous information, there are no excuses.
When we started out as a builder in 1971, we had a black-and-white Polaroid camera. Because we worked for so many second-home owners who lived in Connecticut or New Jersey or beyond, we would always take photos of our work progress and include them with our invoice for inspected work. Clients were always happy about that.
Now, of course, everything is digital. We can take digital photos daily and e-mail them immediately. That keeps the customer happy and totally engaged in the project. It cuts down on any surprises.
We also place projects securely online so the customer can log in and see photos, change orders, invoices and continual messages between the parties. We can have the entire project and account all in one place for the owner.
What surprises you most about customers?
One thing I kid customers about is their reluctance to ask questions. It is their home and their money. There is no such thing as a dumb question. Everything is pertinent. You are the one spending the money.
A pleasant surprise is the growing engagement by customers today. They want to be part of the project. They really enjoy the process. They want to be sure that the shower recess goes exactly in the right place; they may want to be involved in placement of tile.
No matter how well intentioned both sides are, don’t things go wrong?
Of course. But so much of the process has to do with expectations. The more those expectations can be communicated at the beginning and reviewed continually, the less chance there will be disappointment.
Builders must draw out customers. They must explain as much as possible: Just how long is the warranty on roof shingles; what can you expect in terms of life expectancies for this product or that product.
Both parties also must understand up front what is expected after the project is completed.
We try to be very proactive about one-year follow-ups, for example. There can even be a punch list of items to be tended to over that time period. There can be nagging little problems that the builder must attend to and the owner should expect will be the builder’s responsibility.
We like to go through all four seasons to be sure everything is fine. Houses don’t really settle, but they do shrink after a heating season, for example. That could create cracks in the sheetrock of a cathedral ceiling.
A good builder will come back in April or May and take care of all these things without a customer having to ask.
Even beyond that one year, a savvy builder will stay in touch. We may see a leak that the homeowner doesn’t and we can jump on it before it becomes a bigger issue.
Frankly, with 40 percent to 50 percent of non-resident owners on Cape Cod, a smart builder will stay in touch because there are so many other jobs he or she can perform for the customer – from future painting, landscaping, maintenance or home security.
The idea is to create a customer for life. We have created separate divisions for maintenance and inspection with this in mind – from checking after storms to being sure the heat wasn’t left too high.
Published in Cape Business July/August 2008
Glenn Ritt Glenn Ritt is editor and co-publisher of Cape Business Publishing LLC. He is the former publisher of Cape Cod Community Newspapers and editor of The Bergen Record in New Jersey. 
