How to Ensure You Don’t Get Ripped Off By Contractors


Jennifer Robson
9 November 2017

No one sets out to hire a bad contractor. Yet many of us are left with shoddy work, or an independent contractor who took your money and ran, or a subcontractor who never even showed up. 
In advance of having any problems, keep a list of the following things for your local area, that way when something does occur you have the tools on hand to get it fixed easily. 

  • Appliance installer/repair-person
  • Electrician
  • Exterminator
  • General contractor (carpentry, etc.)
  • Handyman
  • Heating/cooling technician
  • Landscaper
  • Locksmith
  • Painter
  • Plumber
  • Roofer or exterior specialist
  • Tailor/upholstery/curtains specialist

When seeking outside help to complete a job around the home you have three options, you can, hire a company, hire a worker through an agency or hire an individual. 
If you hire a company to do the work you would expect them to send qualified workers and be in charge of paying them. The company should be responsible for their staff’s employment taxes and have insurance coverage to protect you in case of worker injury or damage to your property.
If you hire a worker through an agency there are two options, either you pay the agency directly and they employ the worker covering their taxes, insurance wages. Or you pay an agency a finder’s fee and then separately employ the individual they find in which case you are responsible for the associated expenses. 
Hiring an individual means you have the flexibility to screen and select your own service provider, pay and negotiate directly, and direct the person's work.  However, you have more obligations as the employer if you elect this route.
It’s also important that you understand the different types of contractor so that you can hire the right person for the job.

  • General contractor, who manages all aspects of a project, including hiring and supervising subcontractors, getting building permits, and scheduling inspections
  • Speciality contractor, who installs particular products like cabinets and bathroom fixtures
  • Architect, who designs homes, additions, and major renovations — especially ones involving structural changes
  • Designer or design/build contractor, who provides both services

Tips for finding the right contractor
  • Have a clear idea of what you want
  • Make a list of potential contractors
  • Do your research on a contractor before hiring
  • Get written estimates from several firms
  • Check if the contractor is licensed or not
  • Ask for proof of this insurance
  • Look at sites you trust that post ratings and reviews
  • Check for consumer complaints against this contractor
  • Find out how long they’ve been in business
  • Check with friends, neighbours, or co-workers who’ve used a contractor. If you can, take a look at the work done and ask about their experience.

Before Hiring Ask Questions
  • How many projects like mine have you completed in the last year?
  • Will my project require a permit?
  • May I have a list of references?
  • Will you be using subcontractors on this project?

Understand Your Payment Options
  • Don’t pay cash
  • Try to limit your down payment
  • Try to make payments based upon completion of defined amounts of work. This way, if the work isn’t going according to schedule, the payments to your contractor also are delayed.

Get a Written Contract
Your contract should be clear and concise and include the who, what, where, when, and the cost of your project.

Before you sign a contract, make sure it includes; 
  • The contractor’s name, address, phone, and license number (if required)
  • An estimated start and completion date
  • The payment schedule for the contractor, subcontractors, and suppliers
  • The contractor’s obligation to get all necessary permits
  • How changes to your orders are to be handled.
  • A detailed list of all materials including each product’s colour, model, size, and brand. If some materials will be chosen later, the contract should say who’s responsible for choosing each item and how much money is budgeted for it.
  • Information about warranties covering materials and workmanship, with the names and addresses of who is honouring them — the contractor, distributor, or manufacturer. The length of the warranty period and any limitations also should be spelt out.
  • What the contractor will and won’t do.
  • Ask for a clause that makes the contractor responsible for all clean-up work, including spills and stains.

Keep Records
Keep all paperwork related to your project in one place. This includes:
  • Copies of the contract
  • Change orders
  • Any correspondence with your contractor
  • A record of all payments. You may need receipts for tax purposes. 

Tips for Dealing With Things if it Goes Wrong
  • Don’t make the final payment until you’re satisfied
  • Use a Sign-Off Checklist
  • You also need to know that subcontractors and suppliers have been paid
  • Document with photographs
  • Consult your lawyer

Signs of a Scam
  • Knocks on your door for business or offers you discounts for finding other customers
  • Just happens to have materials left over from a previous job
  • Pressures you for an immediate decision
  • Only accepts cash
  • Asks you to pay everything up-front
  • Asks you to get the required building permits

Always let your gut instinct tell you if this is the right person for the job. They may have all the right credentials but something about them may feel off.

Remember you don’t owe them a thing if the work hasn’t started or materials haven’t been purchased yet; if it doesn’t feel like the right fit then look for another contractor.