How to Avoid a Home
Remodeling Disaster!

FREE Tips on Planning and Executing
a Successful Home Improvement Project
 

     The process outlined in this guide will help you avoid the headaches you will face when hiring a contractor for a home improvement project.   At the same time it may help you save thousands of dollars!!

     The degree to which you follow our suggestions depends upon your own level of involvement. Don't compromise your principles to suit their methods, mannerisms, short-comings, etc.  

     Remember: You are the client and any compromise should be made by the contractor.

    One simple word of caution, however: this guide does not attempt to supply you with a singular method of employing the services of a contractor. Therefore, we strongly recommend that you seek professional advice and not rely solely on the information and suggestions contained herein.

     We've made some basic assumptions in preparing this guide, the first being that you are completely new at this game and the second is that your project merits in-depth work.

     To get started, follow these links...

• Getting Off to a Good Start

• Developing the Concept

• Budgeting

• Plans, Drawings, Specifications, & Permits

• Verifying Your Plans

• Screening Your Contractors

• Bidding and Quality Control

• The Contract

• Additional Information

• Problems Do Occur

• Your Level of Involvement

 

 

GETTING OFF TO A GOOD START     

     Understand upfront that your project will not only cost you a lot of money, but considerably more of your time than you imagined. At all times remember Murphy's 1st Law, "If things can go wrong, they will go wrong... at the worst possible moment!"

     Your project will require careful planning and organizing. The larger the project, the more care you should take. When it comes to dealing with a home improvement project, you can never be too organized!

   We strongly urge you to start off by establishing a logical filing system and taking careful notes during the entire process. Possible filing sections should include:

1. Bids

2. Checks (Paid & Cancelled)

3. Concepts & Thoughts (Idea section)

4. Correspondence with Architect.

5. Correspondence with Attorney.

6. Correspondence with Contractor & Subcontractors.

7. Insurance Certificates (Worker's Compensation & Liability).

8. Invoices.

9. Legal Agreements (Contracts , Arbitration Agreements, & Change Or­ders)

10. Lien Releases (Contractor, Sub, & Suppliers).

11. Miscellaneous.

12. Permits & Governmental Paperwork.

13. Photographs

14. Plans (Drawings & Specifications)

15. References (Architect's, Contractors. & Sub's).

16. Schedules (Payment & Work).

 DEVELOPING THE CONCEPT 

     If your project is going to be mainly repairs or maintenance work, skip the following section, because you more than likely will be replacing as-is and therefore not require new designs.

 Wish Lists

      If your project is a major remodeling or addition, there's no harm starting off with wishful thinking and dreams, sharing "what if we did this" approach. Throwing basic remodeling ideas back and forth with your family and friends is a great place to start.  Some find it helpful to start a "scrap book" of photos and ideas.

     In doing this, you'll develop a basic framework for the plans to follow later on. If you find that you can't develop your own initial ideas-- then use other people's as a starting block or outline which you can then build on or amend as you see fit.

•      Scan various remodeling magazines and keep a look out for similar work when traveling with a plagiaristic and critical eye.
   

•      Visit your local library or buy some design and construction guides. Talk to your neighbors and friends about their similar projects and be ready to accept their advice. Ask them things like what they might do differently.
   

•      Go to home shows, become a magpie by collecting every kind of relevant sample, such as paint chips, construction materials, wallpaper samples, product specification leaflets, or brochures.
   

•     Take photographs; make rough drawings as ideas occur. In essence do any-thing that triggers your imagination.

     But at all times you should stay organized by keeping a journal referencing every idea or sample, etc. (where you saw it, how much it costs, ordering lead times).

     There is little point taking a product sample and not being able to identify it at a later date. A small bit of organization now will save you lots of hassle later.

     You will find that your basic concepts are starting to develop into an idea that is adopting a design picture in your mind and losing some of its rough edges. As we said before share your thoughts with anyone willing to listen.

BUDGETING

     The amount of money you can afford to spend on your project is often deter­mined by a third party such as a lending institution. As a result, your budget can invariably cause conflicts with your original concept.

     When estimating your financial requirements, keep in mind that a good rule of thumb is to allow for a possible 10% over run on the actual final costs. Therefore, don't borrow up to your limit, because you may just need to borrow a bit more to finish the project.

     Remember, in residential remodeling, the unexpected always occurs. Your costs can change even if you have an iron clad contract.

     Before you apply for a loan, it's always a good idea to clean up your personal finances. Drop as many charge and credit cards a you comfortably can, it can help improve your odds of financing approval.

     If in doubt, you can even check out your own credit rating, remember all the lending institutions are going to. It does help to know what you are facing prior to making a loan application.

     Approach your bank, credit union, family, or savings and loan, for a loan. If need be, shop around till you find the most favorable terms. Exhaust every avenue open to you -- you'll wind up saving yourself a lot of money here.

     Remember to ask your bank about their "FHA" Federal Housing Administra­tion loans. These are government backed loans, which usually have easier qualifying requirements in addition to lower rates.

     Always know the differences between each loan, such as their costs, term, lia­bility, and pitfalls. Be sure to check their penalty clauses. Sit down with a bank official and get their assistance.  Never assume anything.

    One word of caution: don’t over-extend yourself. Your pet remodeling project could easily become your biggest financial nightmare. It's also important to consider the estimated value that will be added to your home after the work is completed. In many cases, most if not all of your investment will add greatly to the re-sale value of your property.

     It's important to keep things in perspective, however. A $200,000 addition onto a $300,000 house in a neighborhood where $300,000 is the median selling price won't return its value when its time to sell. It may even make selling your home more difficult.

PLANS, DRAWINGS, SPECIFICATIONS, & PERMITS

    Now you will want to turn all of your dreams and ideas into a detailed set of plans from which a contractor can bid and work from. The majority of remodeling projects will require you to obtain a building permit from your local building department and in most cases; the building department will require a full set of construction plans which have been certified by an architect or struc­tural engineer.

     The building permits required to protect your own self inter­ests at the end of the day, by ensuring everything is designed correctly and up to local construction codes. You should now consider meeting with an architect, a design/build contractor, or a straight forward interior/exterior designer.

Architects

     Ideally the best type of architect to employ is one who has had "hands-on" construction experience. This kind of architect is more likely to be able to competently design a set of plans which will match your aesthetic and func­tional requirements as well as the structural requirements.

     Due to hands on working knowledge, he is also more likely to be in tune with the Building needs of a contractor. The advantage to you is that he or she will be less likely to have a design problem which will require re-working in the field. This type of architect is also more likely to have a better rapport with your contractor, which can be crucial to the success of your project.

     The advantages of using an architect: You are paying for a qualified, board licensed professional who certifies their work. A licensed architect is able to apply a certified stamp on his drawings, for which they carry a liability. Designers and building contractors are not able to provide this type of design certification, and as a result are less liable for any problems occurring with their designs. Occasionally building departments don't require certi­fied architectural plans for remodeling on residential and sometimes on commercial work.

     The disadvantages of using an architect: The disadvantage of using an architect, that is if you consider it one, is their cost. Architects fees are generally calculated either on a pre-­agreed flat amount for certain services or by a fixed percentage rate which can vary between 5 % to 10% and is based on the total value of the project. If you are paying for the qualified services of an architect then you should always request that they certify their plans. This imposes liability on their workmanship.

Design-Build Contractors

     The advantages of using a Design-Build Contractor: Very often you can employ a contractor who will lay out the specifi­cations and do the drawings for you. The main advantage is that it can be less expensive than employing an architect and the contractor will approach the project from a "build-able" point of view. An additional benefit's that working with the contractor at this stage will give you the opportunity to make an assessment of his/ her technical knowledge and on how well they will interact with you.

     The disadvantages of using a Design-Build Contractor: The disadvantage is that contractors are more willing to design your plans if you are going to be using them exclusively to do the work.  Another disadvantage is that your particular project might not be high. up on their list of priorities if you are only to purchase the plans from them. Also, their turn around time is generally not as fast as an architect.

     Occasionally a contractor will prepare plans for a fee, however you must stipulate that you are purchasing the plans and that you may not use them to perform your project. Another disadvantage is that their plans may require to be fortified by a licensed structural engineer or an architect. In these circumstances the plans would be examined by the necessary professional for a flat fee.

    Still another draw back is that you have no way of knowing if the contractor has competent design skills. You may have done a thorough pre-screening on his qualifications and abilities in this regard. Remember too that the liability on a contractor for uncertified plans is less than that of an architect.

Designers: Interior and Exterior

     The advantages of using a Designer: Designers can be a great alternative when your project is mainly of a cosmetic nature. Designers are extremely personable and characteristically approach their designs by trying to develop a rapport with you and by getting to understand your distinctive tastes and functional needs.

     The disadvantages of using a Designer: Employing a designer can sometimes work out to be very expensive especially if you are also going to use the services of a qualified professional to ensure the structural feasibility of their aesthetic design.

    Unfortunately designers don't carry a licensed qualification that is acceptable with the building departments and frequently their plans don't contain enough detail to be approved even if certification is not required. In addition, their lack of detail can make it extremely difficult for a contractor to bid on their plans.

     At this point, you may be in a quandary as to which type of designer to use. Because the decision really depends on so many factors (such as your budget, the nature of the work you are doing), we can't advise you as to which will best suit your needs.

     If your project is new construction, you should use an archi­tect. If it's a simple remodeling project (a bathroom fixture replacement or closet reconfiguration) you might not need a designer at all. While on the other hand you might want to use a designer for a kitchen renovation.

     Every circumstance is different and sometimes it just boils down to your budget and your personal inclination.

VERIFY YOUR PLANS

     Once plans are completed, we can't over-stress the importance of clarification. Double check everything! Don't make any assumptions; it could be your downfall. Review every section of plans and specifications (spec^'s) with the architect or designer inch by inch. First you should try and grasp the concept of scale, i.e. 1 inch equals 1 foot.

     Often, it helps to convert the scale and to get a tape measure and verify each dimension. An all too familiar complaint made by the client is that they did not realize that a certain item was going to be so big or so small, "it all seemed so different on the plans".

     In addition to verifying dimensions, you should obtain samples of the materials that are going to be used, color chips, catalogs and brochures. Your plans may have specified a particular make and style of faucet or tile, which sounds great but when it was installed it's completely different from your expectations and requirements.

     You MUST, MUST, go over every detail with a MICROSCOPE! THERE IS NO SUCH THING AS A STUPID QUESTION WHEN YOU ARE THE ONE PAYING THE BILL!

     It's at this stage where you have got to determine every bit of detail. You MUST make decisions on dimensions, materials, brands, models, styles, colors, attached warranties/guarantees, etc.

     If, for some reason, you simply CAN'T determine a particular item; then be as specific as you can about the budgeted cost you will pay by using the allowance method in a quotation, i.e. you have a pre-agreed dollar amount on an item to be chosen at a later date "an allowance." If you choose an item that costs more than the allowance then it's an add-on cost.

     If it stays under the budgeted allowance, it's a credit to you. Another method of controlling cost on an item is to have the work quoted on a material and hourly labor rate with a "not to exceed" dollar limit.

SCREENING YOUR CONTRACTORS

     Hopefully by now you should have a FINAL and CERTIFIED set of detailed plans and specifications in your hands. This is where the real fun starts with the bidding process, because it's not as simple as selecting a contractor from the "yellow pages" and asking them to quote your project. Neither is it simply a matter of accepting the lowest quotation.

     You must ensure that each of the contractors quoting your project is qualified and experienced. Otherwise, you're wasting your time and their energy. The process of checking their credentials can be a very frustrating, time consuming, and difficult undertaking.

     Stage I - Getting Reliable Referrals: Don't choose a contractor at random- you're better off using a reliable source. Get a referral from a friend who has used that particular contractor, get a recommendation from an architect. Remember, you will want to use the recommendation of someone who has had previous experience with that contractor.

     Don't just grab a name out of the hat or "surf' the yellow pages. You don't want your time and money wasted by allowing just any contractor to bid on your project.

     Always ensure that the contractor is licensed and that his license ap­plies to the city, town or county where the project is being carried out. (Different areas require different licenses).

     If a problem occurs later with the workmanship, you can always track the contractor through his license. If your project requires a permit then your contractor will be required to have a license. Your contractor may also require Bonding. Check the requirements with your local Building Depart­ment.

     Ask for references. You don't want a list of their best clients, friends, and or family. Ask for a list of at least 5 of their last consecutive clients.  Don’t let the contractor “cherry-pick” his all time favorite success stories.  

     As proof, request the completion dates on each job so that you can confirm they are consecutive. The more references you get and speak to the better.

Ask the obvious questions like:

• How was the quality of their workmanship?
   

• Would you use the contractor again?
   

• Did they do what they were contracted to do?
   

• Did they complete the job on time and on budget?
   

• Are they related to or a friend of the contractor?

     Also, call the Better Business Bureau and your local County consumer protection agency and check if the contractor has had any complaints logged against them. Determine the date and nature of any complaints.

     Find out how many years has the contractor been in business. The more experience the better; this also applies to his employees and subcontractors. You don't want to be part of his learning curve.

     Stage 2 - Evaluating the Contractor's Quality Standards: In the table below, you will find a reasonable set of standards to which any competent contractor should conform to. Advise each contractor, in advance of their bidding, that you will require each of these standards to be met. Some of the contractors may be immediately eliminated due to this request.

     You should try and evaluate the contractors by their relevant experi­ence on similar projects to yours. As much as possible, you should try and deal with contractors who have had a similar project experience. You don't really want your project to be the contractor's classroom.

     Preferably you want a contractor who knows every step, pitfall, and can handle your project in their sleep.

     Making the right choice on a home improvement or repair contractor is one of the most crucial steps of a successful home improvement program. If you make a good decision, you can almost be guaranteed a successful completion.

     Use the worksheet below to help select a competent professional you can trust.

CONTRACTOR EVALUATION FORM

Reputation, Reliability & Dependability:	Yes	No
Does he have a proven history of dependable service?
Is he licensed and bonded (If required by law or regulation)?
Did you check his references? (At least his last 5 clients)?
Does he have a clean record with the local Department of Consumer Protection?
How many years has he been in business? (The majority of contractors never make it to the 5 year mark.)
Will he provide you with a written estimate/proposal with a three day right of cancellation clause for your protection?
What is the financial health / stability of his company? (e.g. has he ever been bankrupt or filed a lien)
Is he easily reachable by phone 7 days a week?
Contracts and Warrantees:
Will he provide a written contract and payment, and a stage/phase/item schedule?
Does he provide a written product and labor warranty?
Insurance:
Does he carry at least $1 million General Liability Insurance?
Does he have Worker's Compensation Insurance?
Materials & Installation:
Will he guarantee that only top-quality materials will be installed by fully trained, licensed technicians?
Does he meet or exceed all local building ordinances?
Does your contractor provide trained technicians for repairs?

     Stage 3 - Evaluating the Contractor's Financial Stability: A contractor's poor financial circumstances can end up becoming your worst nightmare. Unfortunately and generally speaking, contractors are usually not good business men when it comes to finances and organization.

     One of the main reasons for this is that their day-to-day duties are so demanding that they don't have the time or energy for the necessary administrative functions. As a result, they are frequently in debt and behind on their payments. It's not unusual for them to have had judgments filed against them or to have been declared bankrupt.

     With the contractor's permission, you should contact his suppliers and bank and check his current credit rating. You can even get the contractor to sign a statement to the effect that he has not had any judgments filed against him, gone bankrupt in the last five years, and placed or have had placed any mechanics liens on any previous work.

     Contractors with financial difficulties may deliberately run too many projects at once and therefore stretch themselves extremely thin on their various projects. This is called "spiking" the job. Starting a job and then running off to finish another one. They do this frequently as a method of using your down payment to pay off outstanding debts rather than to purchase materials, etc., for your project.

     Your contractor may start off with all his guns firing then suddenly things slow down because he has transferred his crews over to another job to get that initial down payment elsewhere. You could end up being the victim of his financial troubles.

BIDDING AND QUALITY CONTROL

     Contractor prequalification: At this juncture you be able to proceed with a preliminary pre-qualification of your list of contractors. Any contractor getting past this stage should have all of the basic legal requirements, i.e. licenses and insurance coverage, etc. If you can, meet with each contractor face-to-face and if possible in the presence of your architect.

     Determine how many quotations you want. This number can depend on the total value of your project, and how many contractors you and or chosen agent (i.e. architect, designer, project manager) are willing to work with. Three to four quotes is usually the best.

     Listen to the recommendations of your architect, etc. If the contractors you are considering know their job, then their price quotations should be within the same ball park. Getting more quotes will only confuse things. It won't substantially reduce the total price and can be a waste of time.

     Distribution of plans and specifications: YOU MUST provide each contractor with a copy of the original FI­NAL and CERTIFIED set of plans and specifications. Be careful to ensure that they are each reviewing an identical set of plans. So often, one contractor is inadvertently supplied with an earlier set of plans and ends up providing an incorrect quotation. Trust us; this is easily done, since there are usually so many versions flying around.

     If you are undertaking a project without the use of plans or specifica­tions, contractors can end up submitting quotations based on what they thought you were trying to say, as opposed to what you actually said. If you are not using plans, then you must say exactly the same thing to each contractor… nothing more and nothing less.

     If in doubt, have the contractor describe it back to you. Don't deviate from your description, unless you advise each contractor of the change. If you break this rule, confusion will occur and you will not know which contractor to select.

      If you don't have specifications on a certain item, try to ensure that each contractor quotes with the same ground rules. One method is to talk to only one contractor at the start and then use the specifications contained in his quotation as a template for those to follow. If you fail to maintain consistency, you could end up with vast price variations.

    The quality of materials, their costs and the different methods of doing a particular job can vary considerably. You must be consistent. If a contractor's ideas differ for what ever reason, then have him quote you both ways, the same as every other contractor and then on his alternative suggestion. He may just be right or come up with a good suggestion.

   Reviewing bids: Don't accept vagueness in a quotation and try not to accept loose statements containing phrases "of like quality" in a quotation. Such things are left wide open to different interpretations. 

    You will (maybe we better say "should") not have these problems if you have architectural plans and specs. In addition the interpreta­tion of each bid will have been simplified by having each contractor bid via a set Bid Sheet.

     The Bid Sheet is a form which simply contains a line by line breakdown on each major stage or item with a coinciding blank beside it for the contractor to enter his bid.

     Inform the contractor that the price quote for each stage should not include Profit and Overhead. The profit and overhead is usually itemized separately at the bottom of the page in addition to percentage mark-up on sub-contractor.

The bid sheet leaves no margin for deviation and it serves a number of basic functions:

• It's in "plain English" for you to read.
   

• It can highlight an error on the contractor's part (either being a mathematical one, one of omission, or wrong in­terpretation of the plans.)

     A low price for a stage/phase/item could be a result of the contractor having a particular competitive edge, such as an in-house plumber or electrician, or it could be a deliberate method of trying to under-cut the competition.

    Another benefit is that you can examine the average price on a stage/phase/item and have alternative specs prepared if you want to reduce its cost. The bid sheet places cards on the table.

     The bid process in itself is your next basic screening mechanism, because gen­erally you will usually drop both the ridiculously high and low bidders. Both types are usually an indication that the contractors have missed the mark. The bidding stage is not always cut and dry. It may have to be repeated either due to cost cuts or from a contractor's suggested amendments.

THE CONTRACT

     Do you need a written contract? YES, ABSOLUTELY, POSITIVELY; YES!!!

     If you only get one thing out of reading this guide make sure that it's to understand the need for a WRITTEN CONTRACT! Why? Because it clarifies everything and it can provide protection if anything goes wrong. Don't do anything without a contract, even if your contractor is your best friend. That friendship may not exist at the end of the project.

     Using a contract need not cost anything. You can purchase a standard boiler plate "AIA" American Institute Of Architects contract from a good office sup-ply store, or get one from your architect. These standard AIA contracts have a considerable amount of small print and legal terminology, which you can amend as you see fit.

     However, an AIA contract may not be to your taste. In that case you draft your own, or use an attorney, or use the contractor's draft contract and then amend it. The options are endless.

     Remember contracts don't always have to be worded in legal terminology. The intent of a clause should however always be clear cut with no margin for doubt. As best as possible keep all the "ifs and buts" out. Your contract should in­clude the following:

• The contractor’s name, address (work and home), telephone numbers, the date, their license number, the cost, and the contractor’s signature (signed in your presence).
   

• Your name, mailing address, and the address where the project is to be performed.
   

• A detailed project description, as per the plans and specifications. This can be by way of attaching their quotation as a rider, appendix, or annex (whatever) to the contract.
   

• A statement that the contract and quotation is based on the plans and specifications as dated. (Double check that they are using the final approved set).
   

• Every party to the contract (including the architect) should sign/initial, and date, the specifications submitted with the contract.
   

• A commencement date.
   

• An estimated completion date or an exact completion date if necessary.
   

• A clause stating that all work will be performed in a professional and workmanship manner by qualified technicians.
   

• A clause stating that all work will be performed in accordance with local building codes.
   

• A violation clause with regard to a failure on the contractors part for not having "substantially commenced" work within 20 days from the commencement date, without an acceptable excuse.
   

• A statement defining "substantial commencement" as above.
   

• A clause stating that the contractor will not commence any work without having obtained all the required permits, etc. If it has been agreed that the contractor is not responsible for obtaining the permits, then a statement saying that the contractor will not commence any work without first confirming in writing that he has ensured that all the necessary permits, etc. have been obtained. A contractor sometimes leaves the procurement of certain permits up to their sub-contractors, who in turn may forget or try to get away without obtain­ing one, saving the money and trouble.
   

• A "Notice to Owner" statement that by law a contractor must attach to all contracts. This statement outlines your rights of recession, can­cellation and your responsibilities. This notice MUST be included on a separate piece of paper within the contract document.
   

• A payment schedule. It is a good idea to link your payments into the completion of a certain stage/phase/item. A payment schedule will assist you in structuring your finances and will encourage and ensure that the contractor completes each stage before asking you for money and or jumping onto the next stage. The schedule can discourage the contractor for asking for money haphazardly. It also discourages the contractor from moving his crew off your job in the middle of a stage and onto another client's job so that he can get their money too. Your payment method is your best leverage when it comes to encouraging and motivating the performance of your contractor. Do not abuse it because it can easily swing against you. You can get your architect to confirm the completion of each stage (Usually for a fee).
   

• A statement agreeing to the down payment amount and the date it's to be paid. Down payments prior to commencement of any work are not necessarily required by a contractor before work begins. That's not to say that the contractor won't try to get one. Any competent contractor should have 30 days credit from his suppliers, and his sub-contractors. The only time that a contractor really needs money up front is when ordering a custom made item, which is usually non-returnable and non-refundable. Having said all this, it still is the stan­dard practice for the contractor to request and to receive a down pay­ment. We recommend that any such down payment should not ex­ceed 10% of the gross amount of the job and that you should try and limit the time frame between the payment and actual commencement date to a minimum. Preferably the same day.

A LIEN is a legal claim applied to a property for an outstanding debt. We suggest that you don't make any stage/phase/item payment without its accompanying lien waiver. Don't get lazy with respect to this as the project develops no matter how confident you have become with your contractor. You can always place the burden of organiza­tion and everything else on to the shoulders of the contractor. However, you should double check all the paper work yourself and make sure that they apply to the right items, suppliers, and sub-contractors. Also, it's not uncommon for a general contractor to end up using one or more sub-contractors on the same item. If your gen­eral contractor does not pay his bills for your materials you could be personally_ liable for the debt!!

Even if you are not liable, a MECHANIC'S LIEN can be costly, time con­suming and very difficult to remove. An important thing to remem­ber is that mortgage institutions and home buyers don't like me­chanic's liens. In most cases, you will not be able to sell your home or re-finance your mortgage if there is a lien on your property.

• A statement confirming compliance with a stage/phase/item item sched­ule. You should try and make the contractor attach such a schedule as an appendix. This serves a number of purposes:

  • It makes the contractor perform his work under a good and structured approach.

  • It lets you know where you stand in relation to each stage of the project and their estimated duration (trust us, you will want to know).

  • It makes sure that the contractor knows the logical se­quence of each phase.

  • It can be used as a marking point for payments.

Bonds

     A bond is issued by an insurance company and it provides financial coverage if a particular action is not performed. Bonding requirements can vary from state to state. You should consult with the local building department, licensing authority, and your attorney for their particular requirements.

     Not all projects require bonds. If a bond is required then it's usually reflected in the price of the quotation, as they can be expensive. Some of the various types of bonds are:

• Payment Bonds: Guarantees payment to suppliers and the various sub-contractors.
   

• Performance Bonds: Guarantees complete/performance of the con-tract as stated.
   

• Contract Bonds: Guarantees both aspects of payment and perfor­mance bonds.

 Payment Methods.

     There are several payment methods that you can choose from:

• The standard schedule method which relies on the completion of cer­tain stages/phases of the project.
   

• The Escrow Account method: Whereby you open an escrow bank account containing the required funds. The joint signatures on this account provide the contractor with the assurances that you can pay your bills.
   

• A joint control organization: There are various organizations, who will agree for a fixed percentage fee, manage and co-ordinate the pay­ments to the contractor. Here you could open an escrow account with such an organization. You can also employ them to monitor the work performance and the collection of the LIEN RELEASES. This option can help reduce a considerable number of problems and headaches. Your architect or a project manager can do these things for you.

Capital Improvement Certificates

     If you are spending money to improve or maintain your personal or investment property you can avoid state sales tax on goods and services as long as your contractor provides you with a Certificate of Capital Improvement. Be sure to ask your contractor about it. You'll save yourself a lot of money.

PROBLEMS DO OCCUR

     Always remember that home improvement and remodeling is not a precise science and if things can go wrong, they will. There are always teething problems at the start, middle and end of any project. Be patient and ask questions if in doubt. Some stages of work can move extremely quickly while others will appear to be dragging along. It's the nature of the beast.

     It's not due to the contractor going slow, but rather that a certain stage/phase can't go any faster. Sometimes you will be able to see what has been performed and other times you will not. As in other professions, contractors also have step back from a job and use their grey matter once in a while.

     Construction work by its very nature is messy and dirty -- don't expect it to be neat and clean. As the saying goes "You have to break an egg to make an omelet." The unexpected will always occur and you should not necessarily blame the contractor for it or even look for blame. Things happen.

     A contractor can't be expected to know that you have wood rot behind your nice clean sheetrock!

     Always maintain good communications with your contractor and architect. Find out what's happening on a regular basis and make yourself easily avail-able, so that they can turn to you for your instructions.

      Occasionally, you may have to act as mediator between the architect and contractor. Things can get pretty hot between them. Be a Chief not an Indian and try to avoid committee decisions, i.e. don't throw a problem back and forth and get nowhere fast.

    At the same time try and keep everyone in the loop. Keep the communication of the decisions as much as possible up to one person. "Too many cooks can spoil the broth."

YOUR LEVEL OF INVOLVEMENT

     You may wish be involved in every aspect of the project, or you may decide to have little to no involvement other than confirming the plans with your archi­tect and signing the checks.

     Whatever level of involvement you decide on, we strongly recommend that you personally interview the final contractor selec­tion. Why? Because you will be turning over your home and or business property to them, forfeiting your privacy, having strangers trespass on your property, and handing over large sums of money.

     In effect, your lifestyle will be turned upside down while they are around. Be sure that you can conduct your work and live your day-to-day life with them around for 8 to 10 hours a day.