How to Hire a Contractor (Everything You Absolutely Must Ask)

How to Hire a Contractor (Everything You Absolutely Must Ask)
4/14/2017

There’s a lot of things to consider when your business is hiring a contractor.


How to Hire a Contractor (Everything You Absolutely Must Ask)

There’s a lot of things to consider when your business is hiring a contractor. The competition is stiff, and everyone is making themselves sound like the best possible option. If you want to know how to hire a contractor the right way, here are 10 simple questions that will tell you everything you need to know straight away.

  1. How to Hire a Contractor (Licensing)

Don’t be afraid to ask for proof that the contractor is properly licensed.

  • As a state, Maryland does not require a Contractors License, but contractors must still be properly licensed to perform electrical, plumbing, or HVAC work.
  • Virginia, on the other hand, requires multiple licenses.
  1. Insurance

Contractors must have:

  • Workers’ compensation insurance
  • Property damage and liability insurance
  • Commercial auto insurance
  • Rental equipment insurance
  1. Business History

Before hiring a contractor, you want to find out the following information:

  • Legal history (lawsuits)
  • Financial history (such as bankruptcies)
  • Any accredited associations they are a part of (such as the BBB)

Be sure to request a list of references for similar projects that they have worked on, and follow through by contacting them and investigating their legitimacy.

  1. General Procedures

Ask them who will be at the site, and how the site will be supervised. More specifically:

  • How much time will be spent at the site each work?
  • How many other projects is the contractor currently handling?
  • What permits need to be pulled?
  • What materials will be used?
  • Is the contractor performing labor themselves or supervising?
  • What is their clean-up procedure?
  • When is the start date and completion date?
  • Do they have itemized price estimates?
  • What is their payment schedule?
  1. Payments

Be sure to ask how “surprise” expenses will be handled, and agree upon a reasonable down payment. Remember: a stable contractor won’t need much money upfront, so if you are hiring a contractor and one of them asks for a huge advance, then it should be taken as a major red flag.

Also, make sure that you are paying a company and not an individual. If you are cutting checks to an individual who owns a business license, then it could mean they aren’t going to declare this on their taxes (again, not a good sign).

Most importantly, if you want to know how to hire a contractor properly, then don’t ever pay cash! You want to use a method of payment with a paper trail in case anything is ever disputed in the future.

How to Hire a Contractor While Doing Your Own Research

Asking the contractor about permits and licenses is a good idea, but don’t rely solely on their word. Do your own research and learn what the rules are in your area. There are plenty of resources to figure out exactly which permits are required for your area, whether you live in Maryland or Virginia.  

 

 

 

 

 

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