Multi-Point Checklist For Homeowners
and Stakeholders When Hiring a Contractor

The Relationship

You are a homeowner, or other stakeholder, and the contract will be a business transaction. The contractor is not there to be your friend. You can and should be cordial and friendly - but stick to business.

Multiple Estimates

It is always good to get 2-3 estimates. If there seems to be a great disparity in the pricing you should ask for clarification on the services offered by the contractor. Make sure that you are comparing oranges to oranges. Although price is important it is not always the case that cheaper is better.

Credentials and Past Performance

Use a neutral Third Party to determine the validity of the contractor credentials, insurance, and history. The importance of establishing these facts independently cannot be overstated.

The Decision

Take a reasonable amount of time in making your decision on a contractor. Remind yourself that no deal is better than a bad deal. If the price or terms offered seem too good to be true, it probably is.

The Contract

Most contractors will offer you their version of a contract. The better ones will include sufficient detail identifying the scope of the project and steps required to get it done, yet are simplified and easy to read. The essence describes the work to be done, payment schedule, estimated start and completion dates, and any warranties provided. If you have concerns or are uncertain, always ask for clarification. Reputable contractors will readily take the time to guide you through the process.

Right to Cancel

In many instances you have the right to cancel a contract without penalty. The Florida Statutes Title XXXIII, Ch. 520.72 states in pertinent part: "Cancellation of contract.—Every home improvement finance seller or home improvement seller shall furnish to the buyer a notice of the right to rescind the contract. Either party to a home improvement contract may cancel the contract by the exercise of the right to rescind until midnight of the third business day following the execution of the contract by giving notice to the other party by either certified mail or registered mail. The party invoking this section is not liable to the other for any damages incurred by cancellation under this section."

Release of Lien

If you hire a contractor and the improvements cost more than $2,500 ($7,500 or more for A/C replacement), you should obtain a Release of Lien, which is a written statement that removes your property from the threat of lien. Before you make any payments, make sure you receive this waiver from all suppliers and subcontractors, and that it covers the materials used and the work performed

Notice of Commencement

A Notice of Commencement announces the intent to begin improvements, the location of the property, a description of the work and the amount of bond (if any). It also identifies the property owner, contractor, surety, lender and other important information. You should always file a Notice of Commencement before beginning a home construction or remodeling project. The local authority that issues building permits is required to provide this form. The form must be recorded with the Clerk of the Circuit Court. You should also post a certified copy at the job site. In lieu of a certified copy, you may post an affidavit stating that a Notice has been recorded, along with a copy of the unrecorded Notice.

If you fail to record a Notice of Commencement, or provide incorrect information, you could have to pay twice for the same work or materials. Furthermore, the building department is prohibited from performing the first inspection if you haven’t filed the Notice of Commencement with them. You can also supply a notarized statement that the Notice has been filed, with a copy attached.

Payment(s)

Never pay in cash. Always use a check or cashiers check. Never pay the entire amount of the contract upfront. It is typical that contractors require a deposit of 1/3 - 1/2 as a down payment to cover material and labor costs. Larger contracts may include 3-5 separate payments structured as certain milestones are met. Restoration contracts that include insurance companies in the process may pay a portion to you which in turn you provide to the contractor.

* The best practice is to decline making any payment until you have obtained a Lien Release.

Permitting

This critical part of the process often remains in the background and behind a veil to the homeowner. That should not be the case at all. The permitting process includes a Clearance Sheet, Notice of Commencement, Permit Application, and the various Inspections that are required. It is always advantageous for you to be aware of the process and ask questions.

Homeowner Associations (HOA)

Many Florida homeowners live in communities that are managed and to an extent regulated by an HOA. They most often have guidelines for any construction projects, even on your own property. Consult your HOA and endeavor to remain in compliance with their applicable rules.

Document the Entire Process

It will be a great advantage for you to memorialize your project from inception through final inspection and a Certificate of Completion. This need not be overly complicated. The basics are simply keeping and retaining all documents, making note of significant dates, and taking photos and/or video. This can be invaluable if controversies should arise later. It is also great to have if you sell your home in the future.

Delays

Various factors can influence delays in your project. The most common are weather, material availability, and labor issues. While the weather is unavoidable, good management practices can mitigate the risk of the other factors. Build a good working relationship with the contractor that you choose.