What You Should Know About Home Repair Contracts

by Marta A. Brooks, Esquire

SeniorLAW Center

            As a homeowner you are aware of all the things that can break or go wrong in your house.  Repairs are often too complicated to do yourself, so you hire a contractor.  Some corrupt contractors see this as an opportunity to take advantage of seniors.  So it is important to know how to choose a contractor and what to look for in a contract.

            How do you go about hiring a contractor?  First, ask people you trust if they know a reliable contractor or look in your local newspaper.  You can also call Contractor Network at 1-800-828-4342 for a referral.  You should be suspicious of any “contractor” who unexpectedly shows up on your doorstep offering to do work, or calls you to solicit work.

            Next, get written estimates from at least three contractors.  Some contractors will charge a small fee, others will not.  Have the contractors come to your home to give an estimate. Walk through the house with the contractor, having him thoroughly explain what will be done.  Each estimate should be clearly written.  It should include the date; the contractor’s name, valid business address, and telephone number, not a beeper number; the contractor’s license number; specific details of the work to be done; the materials used; the cost of everything; and the contractor’s signature, not yours.  Speaking to several contractors should help you choose the best one.  Remember, the lowest estimate is not always best. 

            What are some additional questions for a contractor?  You want to know when the work will begin, approximately when it will be completed, and whether the work will require hiring a subcontractor such as a roofer, electrician, or plumber, and the cost.  You want to find out what type of guarantee is being offered, and for how long.  You should also ask the contractor for the names and numbers of several other customers.  Then call them and find out what work was done and when, if they were satisfied with how it was done and the results, and if they would use the same contractor again. 

            Also, your contractor should have liability insurance and workman’s compensation in case a worker is hurt while working.  Ask the contractor for proof of insurance such as a current certificate of insurance.  Make sure the contractor intends to get any required City permits.  Otherwise, the City can fine you.

            How can you be sure a contractor is licensed?  A contractor must have a home repair and business privilege license, and may need other licenses too.  Call L&I’s License Issuance Unit at 215-686-2490, before entering into a contract.  Give them the contractor’s name and address, and describe the proposed work.  They can tell you if that person has all required licenses. 

            Because of lower costs, you may be tempted to hire a contractor who tells you that licenses, permits, and insurance are unnecessary.  Ignore those contractors, or you will pay in the end!

            What should your contract contain?  The contract is the most important part of your relationship with the contractor.  It sets out each party’s responsibilities.  You and the contractor are bound by the contract’s terms, so read it carefully before signing it.  Some of the things your contract should include are: a date; the contractor’s name, valid business address, and telephone number; the contractor’s license number; the exact beginning date and estimated completion date; a list of all work to be done, materials to be used, the cost of each, and the total cost of the job; a guarantee against defects in workmanship and materials; a statement that the contractor will get all necessary permits; a fair payment plan (i.e. 10% before job is started; payments as job progresses; and the final 10% when job is completed to your satisfaction); and the contractor’s and your signature.  Never pay a contractor in cash, and get a receipt!

            If you are thinking about taking out a home equity loan to pay for repairs, make sure you read the contract very carefully, and understand its terms, before signing it.  Among other things, the contract should tell you the amount and number of your monthly payments, the interest rate, how much you are borrowing and how much you will end up paying back, and the date your payments will be complete.

            If you and the contractor agree to change the contract, then make sure the changes are put in writing and signed by both of you.

            When can you cancel your contract?  When you sign a contract for goods or services worth at least $25, as a result of a contact with you or call on you at your home, it should include a statement explaining your right to cancel the contract within 3 full business days following the day on which you signed it.  You should also receive a form, in duplicate, explaining that right.  You must notify the contractor in writing that you intend to cancel, and your letter must be postmarked by midnight of the third business day following the date of the contract.  Be sure to keep a copy of the letter, and mail the original by certified mail, return-receipt requested.  If due to an emergency work started immediately, the right to cancel within three days will not apply.

            What can you do to try to make sure the work is done correctly?  Watch the work.  If you have a friend or family member who is familiar with construction practices, have them help you.  One of the best ways to protect yourself is to get involved and ask questions. 

            If problems arise during or after the job, you should contact the contractor and try to resolve them.  Remember to keep copies of any letters you send to the contractor. 

SeniorLAW Center assists many elders with legal problems relating to their homes and its Homeowners Assistance Program specifically focuses on such issues.  Elders can discuss a legal problem or get information by calling SeniorLAW Center’s telephone intake line 215-988-1242 Mondays through Fridays, 9 a.m. – 1 p.m., or coming to our center city offices, Mondays through Wednesdays, 9 a.m. – 4 p.m.  Most issues can be addressed initially over the phone.  For general information, please call us at 215-988-1244.  

Marta Brooks is an attorney and Coordinator of SeniorLAW Center’s Homeowners Assistance Program.