Tips to Starting a Project
Determine the Overall Scope of the Project
Prioritize your needs and wants, as these will affect what you can really afford to do. Call your local building department regarding property setbacks, easements, as well as your HOA office (if applicable) to stay within the CC&R guidelines. Sketch your ideas on paper; this will help in the design process. Don’t worry about being accurate or being artistic—you won’t be graded on it!
Communication Is Vital
Be open and honest. This is not the time to be silent and accept all that your contractor suggests. Suggestions and comments should be shared and openly discussed. You control the overall outcome of what you are paying for; others can only do what you request. Whomever you select to design/draft your project is just as important as whom you hire to construct it. If for any reason you question the choices you have made, it could be too late!
Responsibility of the Homeowner
It is the responsibility of the homeowner to ascertain the business and ethical reliability of the contractor prior to signing any contracts. Do not rely on phone books, newspapers, or even business cards, as these do not guarantee they are a valid, licensed contractor. Only the R.O.C. can provide this information.
Determine the Project’s Budget
First, think realistically, and second, rethink it all over again! If you are unsure of the cost of your project, call a couple of licensed contractors for ballpark estimates, but please see Note #4. The more information you can provide regarding the size, interior, and exterior details are very important. Ballpark estimates can be very misleading once you start the design process, as things will usually change. If you are financing your improvements through home equity loans or refinancing, complete these procedures prior to meeting with a contractor.
*Lending institution may want to see plans first before discussing hard numbers.*
Hiring a Building Designer/Architect Is Crucial
They will confirm vital information regarding your property, setbacks, easements, grade and drainage, and building standards that are allowed as to lot coverage, overall height, etc. This information is also used in the site plan that must be created. It is a necessary step before proceeding into an agreement with a contractor. There are two usual ways of getting plans done. One is by a design/build contractor (via a design/build contract), which can be good and bad. The other is by the design-bid-contract process, but you must understand the difference between the two.
How to Select the Right Contractor
Selecting a Contractor Can Be a Simple Process
Doing it the right way will save you time and money. References from friends and family can be a good source, but not always. First and foremost, get at least three contractors to discuss your project. Provide each with a set of completed plans and your list of specifications. Each should be receiving the exact same information, so when you start collecting the bid proposals, you can easily see a comparison of how the final costs add up. This will help you make an informed decision as to who will do the work and be the best at providing good communication.
IMPORTANT NOTE: It is best to make one very important phone call before meeting with your selected contractors:
ARIZONA REGISTRAR OF CONTRACTORS (R.O.C.)
3838 North Central Avenue, Suite 400
Phoenix, AZ 85012
Toll Free AZ: 888-271-9286
After calling the Arizona Registrar of Contractors (R.O.C.)
- Does the contractor have a permanent mailing address or showroom to which all communication is directed? A showroom is not necessary, but if so, this is a plus.
- Does the contractor have an immediate paging, cell phone, or answering system and after-hours answering service (Extremely important for emergencies or answers needed immediately)?
- Does the contractor assign a designer/project manager or lead carpenter to your project to act as a go-to person throughout the project’s duration?
- Does the contractor maintain a communications reference log at your home as a standard for written communication, change orders, subcontractor’s reference, and progress updates?
- Does the contractor schedule daily/weekly meetings with the homeowner to assess the progress of the renovation (make sure you confirm this before you sign on the dotted line)?
- Does the contractor have proof of liability and workers’ compensation insurance? Make sure that you retain a copy of these documents during the renovation. It may be wise to ask that these copies be mailed directly from the insurance company itself. Copies can easily be altered.
- Does the contractor have a list of customer references, scattered over a period of time, so that you may assess past and present workmanship, as well as the contractor’s call-back response when completed work may need repair or adjustment? When touring current jobsites, make note of the cleanliness of the site and how trash is removed, including items such as an on-site toilet.
ONE SPECIAL NOTE: Before visiting an address of a reference, talk to the neighbors first. It seems, almost in every encounter with them, that they NEVER forget anything! You may be surprised at issues that may have come up before, during, and after construction. This may be better information than the actual reference may be able or willing to share. Don’t be shy; asking questions will save you from a costly mistake.
- Does the contractor have a list of local supplier references so that you may determine if the contractor maintains a fiscally prudent record of paying bills and has sound credit?
Contracts: What They Should Include before You Sign, and the First Rule: ASSUME NOTHING!
- Contract Specifications—Amount of total project, payout schedule, start and finish date, NO ARBITRATION CLAUSES should be on it (if so, this strips away your rights and doesn’t always favor the consumer), all items pertaining to what the contractor and/or what you will do.
- Scheduling and consequences for not adhering to the start and finish dates without lawful excuse.
- Change orders—what they mean in potential charges and the effect on scheduling; NEVER AGREE TO ANY CHANGES VERBALLY—HAVE ALL AGREEMENTS WRITTEN AND SIGNED.
- Mechanics Liens—“Notice to Owner” must be on contract as per the law. Always receive lien waivers from the contractor when making payments. If you have received Notices to Owner from suppliers, subcontractors, etc., ensure that you receive lien waivers from them to avoid paying TWICE for labor and materials! Before filing a lien on your property, the tradesperson who has not been paid must file a preliminary notice. This notice must be sent to the homeowner no more than 20 days after the claimant begins working on a property. If the subcontractor fails to do this, however, they can still file a late notice and go ahead with the lien.
- To avoid a receiving a lien after a project is finished, require the general contractor to provide you with either a conditional waiver and release or an unconditional waiver and release. In the first case, the contractor gives you a conditional release in exchange for payment in full by personal check. The release is conditional until the check is cashed when it automatically becomes an unconditional release. In exchange for an unconditional waiver, you give the contractor a certified check for the work completed.
- Right to Cancel Notice—3-day right of rescission from date of signing the contract.
- Warranty Information—all information or warranted items purchased to be given to the homeowner.
- You can protect yourself from liens by getting a list from the contractor of all the subcontractors and material suppliers who will work on the project. If they do provide dates when they will start, recognize that this is just an “estimated time schedule,” not a promise.
- No Completion of Substantial Work clause should be in the contract. Final payment should be made only when you have received a Certificate of Occupancy from your local building department, AND any and all punch-list items have been corrected to your satisfaction. You have the legal right to withhold payment of up to 10% of the total contract costs.
Contact us to schedule your consultation. We proudly serve property owners in Arizona as well as the surrounding states.