A fixer-upper, real estate

Buying real estate often means hiring contractors to fix defects or remodel a home to meet a client’s specifications. When hiring a contractor, there are some necessary steps to take that can minimize risk and protect the homeowner from deficient work.

Researching the Contractor

Start by running the contractors name through the records of the Illinois Attorney General. Look for complaints and any issues or fraudulent activity that the contractor has been involved in. It’s also a good idea to review the contractor’s reputation with the Better Business Bureau.

Homeowners should also review the contractor’s license to ensure the contractor is in good standing within the state. A contractor who works without a license may not have the proper training, skills, or insurance to conduct the work properly.

It is also important to get recommendations and references from the contractor. Ask to receive references from the most recent clients he has conducted work for. It is also advisable to ask for project-specific references, i.e. projects similar to the work that needs to be performed.

It is also strongly advisable to request proof that the contractor has the necessary property damage, personal liability, and workers compensation insurance. Homeowners should never hire a contractor that does not provide this information.

Permits and Contracts

It is necessary to determine what permits will be required and if there are any specific inspection requirements for the project. This can be done by contacting a local building inspector and the city.

It is also imperative to have a solid written contract in place prior to commencing any work. This contract should be written or reviewed by an Illinois real estate attorney. The contract should clearly spell out the scope of the work, the timetable, the quality of the materials to be used, and the total cost of the work. It should also include specifics related to warranties, disputes, and contractor liability.

Be aware of mechanic’s liens. In Illinois, homeowners are liable when a contractor fails to pay their subcontractors. State law requires contractors to provide a written list of each and every person who will be furnishing materials or labor to complete a project. Always be sure to get a list of these names prior to commencing work on a project. Moreover, make sure the contract includes the methods and timetables the contractor intends to pay the subcontractors.