How to avoid contractor problems

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July 12, 2004 // UPDATED 2:27 pm - April 25, 2007
By: Scott Russell
Scott Russell

1. Hire a licensed contractor. The Minnesota Department of Commerce can tell you which companies are licensed and whether the state has taken enforcement action against them.

The Department's number is 651-296-6319. The Web site is www.commerce.state.mn.us. Click on "Consumer info and services," and go to "License lookup." Click on "All publications and tips" for more information on hiring contractors.

Electrical contractors are licensed by the State of Minnesota Electricity Board. Go to www.electricity.state.mn.us/ or call 651-642-0800. Plumbing and heating contractors are licensed by the city of Minneapolis. Go to www.ci.minneapolis.mn.us and click on "Help Center," then "Need a Contractor?" or call 673-5800.

2. Ask to see proof that they are bonded and licensed.

3. Check Hennepin County court records to see if the individual or business has a history of litigation. Computer terminals with instructions are available on the second floor of the Hennepin County Government Center at 4th Avenue South and 6th Street Downtown.

4. Get your questions ready. The National Association of the Remodeling Industry suggests these for starters: How long have you been in business? What percentage of your business is repeat or referral business? How many projects like mine have you completed in the past 12 months? What is the time frame for starting the project?

5. Write expectations into the contract that are important to you -- such as a starting and ending date for the project and the types of materials used (e.g. wood framed or metal framed windows; pine, cherry or oak wainscoting; any specific fixtures you want, etc.) Get a list of all subcontractors who will work on the project.

6. Do not pay all the money up front; it can provide needed leverage to get a job done and done right. For larger projects, have a payment schedule written into the contract with final payment due after the project passes inspection.

7. When you pay for part of the job, such as the roof, ask for a lien waiver. If the contractor does not pay the subcontractor, the subcontractor can put a lien on your home for the unpaid bill.

8. If a licensed contractor defrauds you, you can apply to the state-administered building contractor recovery fund for compensation if you can prove your case in court. You can't get compensated if you hire an unlicensed contractor.

If you have a problem or complaint with a residential building contractor, call the Department of Commerce Market Assurance Division at 651-296-2488 or 800-657-3602. You will be able to discuss your situation with an investigator who may offer suggestions on how to resolve the dispute. If you cannot resolve the dispute, you may submit a written request for a formal investigation.