Selecting a Contractor

1. Good sources for locating contractors include: referrals from friends or relatives, yellow pages advertising, the Internet, newspaper, radio and television advertising.
2. Be sure the ads contain the contractor's state license number. If the contractor is not licensed, the law requires the contractor to state "not a licensed contractor" in the ad. The contractor's ad should also show the contractor to be insured and bonded.
   
3. Compile a list of contractors you would wish to contact.
4. With your touch-tone phone, dial the state contractor's board computer at 1-800-321-2752 to pre-qualify the contractor. It is a swift and simple process to determine the validity of a contractor's license. You are guided through the process and can check up to three license numbers with one call. You can determine if the license is current, active and in good standing. You cam also determine if the license is suspended, revoked or expired. You can determine if the contractor is licensed for the specialty service you require.(You would not want a painter to rewire your home.) You can determine whose name or names appear on the license as owners, painters or officers of the corporation. This information will enable you to determine who owns the business and who is an employee of the business. Any person not listed on the business is an employee of and as such should be covered by workman's compensation insurance in case of injury.
5. Call your local state contractor's board office by dialing 818-901-5168. You can request the record of a contractor and determine if this record is clean or blemished.
6. Once you have eliminated those who are not worthy of your call, then call the remaining contractors, without revealing your name or address, tell the contractor that you have checked the contractor's licensing credentials and found them satisfactory. Tell the contractor that in addition, you will require labor and material releases submitted with the billing for services rendered, certificates of insurance, name of the contractor's bonding company and the bond number. A qualified contractor with your protection in mind should not object to any of these requirements. If a contractor cannot comply with these requirements, an explanation is due. The explanation may reveal interesting facts.
7. The age of a license can generally be determined by first digit. Licenses are issued numerically. Contractor's state license numbers usually contain six digits. As of 12/95 a license beginning with 1 is 40 years old, 2 is 20 years old, 358722(my number) is 17 years old, 630592 (my son, Bill's number) is 4 years old and a new license number will begin with 7. The exception to this rule is if recent organizational changes have occurred, a new number is issued to the contractor. It is advantageous to deal with long term companies for obvious reasons and for the most part you can use this scale to determine the longevity of a business.
8. Certificates of Insurance: The following certificates are the ones you should ask the contractor to supply you completely.
   • Certificate of Workman's Compensation Insurance: Since 1993 the law requires contractor's to carry Workman's Compensation Insurance. A certificate of insurance is required to be on file with the Contractor's State License Board. If this coverage is interrupted the contractor's license can be suspended or revoked. Workman's Compensation insurance covers medical bills incurred by an injury to a contractor's employee or employees while on the job. Your homeowner policy is not required to pay for these injuries.
     
   • Certificate of Liability Insurance: This insurance is not required by law. It protects both the homeowner and the contractor for damage done to the premises by the contractor or the contractor's employees. A contractor with "nothing to lose" will probably not have this coverage. Responsible contractors will.
     
   • Contractor's Personal Health Insurance: Contractor's Personal Health Insurance: Required by owners or partners in a business not incorporated. Workman's Compensation Insurance covers only the employees of a company, not the owners. An uninsured owner of a contracting business, if injured on your property, could file against your homeowner's policy. Your policy may not cover these individuals. Contractors can operate legally without Workman's Compensation Insurance if they file an affidavit with the State Contractor's Board stating that they will not be hiring employees. In this case, be positive that your prospective contractor works alone and ask the contractor to produce proof of health and accident insurance to cover any injury to the contractor. Family members of a contractor are excluded from Workman's Compensation Insurance Policy. If you do not require your contractor to produce proof of insurance coverage on those family members, you could again place yourself in jeopardy.
   • Bonding Information: Ask your prospective contractor to supply you with the name and telephone number of the contractor's bonding company and the bond number. If the contractor hesitates to supply this information or does not answer your question satisfactorily you have the option of terminating the phone call without disclosing your name, address or telephone number. Invite the contractor who appears legatee to make an appointment to see the work. It is important to pre qualify your Contractor. You need to be assured that the individual coming to your home is legatee. It is best err on the side of caution in this day and age.
     
   • Labor and Material Releases: These forms are submitted to you by the contractor. The labor release is signed by the contractor's employee. The material release is signed by the material suppliers. These releases relinquish the right to file a Mechanics Lien on your property and those who signed the release thereby relinquish their lien rights by stating that they have been paid by the contractor for their improvement of your property.
     NOTICE-"Under the Mechanics Lien Law(Civil code, Sec. 3110et seq.) any contractor, subcontractor, laborer, supplier, or any other person who helps to improve your property, but is not paid against your property." This means that, after a court hearing, your property could be sold by a court officer and the proceed of the sale used to satisfy the indebtedness.
     Even if you pay the contractor in full, if the contractor does not pay the parties listed in the Mechanics Lien Law, those parties can file a lien on your property. The law does not state who pays these parties simply whether they were paid or not. Labor and material releases are very important to a homeowner. Demand them!

Selecting a contractor

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Copyright © 1997 William L Myles and Sons
Last modified: September 10, 1999