e;., (1 G1b2C> .C7 "II ~ ~ b Hb GEORGIA CONSUMER'S GUIDE To HOME IMPROVEMENTS Tips to help you avoid costly mistakes and misunderstandings with your contractor GOVERNOR'S OffICE OF CONSUMER AFFAIRS BARRY W. REID, ADMINISTRATOR 2 M.L. KING, JR. DRIVE, SUITE 356 ATLANTA, GEORGIA 30334 - 4600 ATLANTA: 404/651 - 8600 STATEWIDE TOLL FREE: 800 / 869 - 1123 Are you considering making any improvements to your home? If so, select the contractor with great care. To avoid many of the common pitfalls of remodeling, think about * what you want to have done, * what it will realistically take to do the job * how much you are willing to spend and what type of professiona/ you want to do the job. The most frequent consumer home improvement complaints are * cost overruns, * missed deadlines and * shoddy workmanship. Serious problems caused by poor workmanship may not be evident at the time the work is completed, but show up at a later time. How Do You CHOOSE A CONTRACTOR? Ask friends or relatives for recommen dations. Ask for the complete business name, address and telephone number of the contractor and verify them. Do not accept a post office box number without a street address. Check with the Better Business Bureau (BBB) in the area where the contractor's business is located to see if any complaints have been filed against the company. Ask about any unresolved cases and how long the contracting company has been in business under its current name. Unfortunately, some of the less reputable companies may frequently change names in order to avoid being located. Ask to see the contractor's business license and then check with your county or dty business license department to verify that it is valid. Check the records at the local Magistrate's, State and Superior Courts to see if any claims have been filed against the contractor or company. Ask if the contractor is a member of a professional or trade association that has a code of ethics and a process to arbitrate disputes, such as the Georgia Chapter, National Association of the Remodeling Industry, Georgia Home Builders Association or the Greater Atlanta Home Builders Association. Compare construction costs by getting written, itemized estimates or bids from several contractors. Similar building specifications, materials, and time frame for completion should be listed in each estimate. Verify prices for building materials quoted in the estimate by contacting building supply companies. You may also ask the supply company about previous dealings with a prospective contractor. Be CQutious if a contractor tries to pressure you into qUickly signing a contract. Do not automatically select the lowest bid. Beware of: * Unknown or out-of-town businesses in unmarked trucks or vans. * Door-to-door salespeople and tele- phone solicitors promising qUick jobs and bargain prices. * Outfits that offer a bargain rate because their "equipment is already in the neighborhood." * Businesses that advertise "special introductory offers." * High pressure sales tactics. * Scare tactics or threats. WHAT SHOULD You KNOW ABOUT THE CONTRACTOR? Ask for a list of previous customers whom you can contact for references on the contractor's work. If possible, inspect some of these properties. Ask to see a copy of the contractor's insurance certificate or the name of the insurance caITier/agency and verify the coverage. Contractors should have persona'l liability, workers' compensation and property damage insurance to protect customers from lawsuits if an accident happens on the customer's property. 00 not do business with any contractor who does not have this coverage. Request that the contractor apply for a building permit under the name of the business name or his name and not yours. This will protect you from any additional expense if the work does not comply with the building codes. Consider asking the contractor to post a bond to assure payment to all subcontractors and suppliers for any sublet work, or require subcontractors to sign a lien waiver when payments are received. Be aware that any subcontractor or supplier who is not 6. Lien releases from subcontractors and material suppliers. 7. A record sheet on each subcontractor listing the work performed and the length of time on the job. 8. Warranties. 9. Samples, swatches or identifying information on materials used in your project. WHAT SHOULD You Do BEFORE MAKING THE FINAL PAYMENT? Thoroughly inspect all work before making the final payment. Remember to specify in the contract that you will withhold ten percent (10%) of the total price until the job has been completed, you are satisfied with the work that has been done and you have proof that all subcontractors and employees have been paid. Review the entire project with the con tractor. Immediately point out any defects and be sure they are corrected before making the final payment. Never sign a completion certificate until the city/county building inspection department has certified that all work was performed in accordance with code standards, you have proof that all subcontractors have been paid in full and you are completely satisfied with the jato You have three (3) days to cancel a home improvement contract (emergency repairs or maintenance are not covered) for more than $25 signed inside your home with a contractor. If the contractor routinely extends credit and your home is used as security to arrange financing for the improvements (such as a second mortgage), you also have the three-day right to cancel. You must be told about these cancellation rights and be prOVided with all necessary cancellation forms. If you decide to cancel the contract you must sign, date and return the Notice of Cancellation form to the contractor by certified mail, return receipt to show that the cancellation was sent on time. Within ten (10) days after receiving your cancellation notice, the contractor is reqUired to return all of your money. WHAT RECORDS SHOULD You KEEP? You should keep a file with all papers related to the home improvement job, including: 1. The contract and any change orders. 2. Plans and specifications. 3. Bills and invoices. 4. Cancelled checks. S. Letters, notes and correspondence with the contractor. TIPS To CONSIDER BEFORE SIGNING A CONTRACT Make sure that the written contract contains all terms of the agreement and that you have read and understand everything before signing. Keep a signed, readable copy of the contract in a safe place. Make sure all verbal promises are included in the written contract. Be sure that the materials you select are what you want. Changes made after construction has begun can be costly. If you need to borrow money to finance the work to be done on your home, add a clause to your contract stating that it is valid only if financing is obtained. When writing a contract, limit your down payment to no more than 25% of the contract price. The remaining payments should be made depending upon the progress of the work, but you should withhold 10% until the work is satisfactorily completed. Be sure the contract includes everything you feel is important to the job. Never sign a partially blank contract. Fill in or draw a line through any blank spaces. If you have any questions about the contract or do not understand something, ask before you sign. paid by the contractor may file a materialman's lien (a legal claim) against your home. At a minimum, require the contractor to provide an affidavit of completion when the work is finished. A home improvement contract should include: 1. The date of the contract. 2. The contractor's full name, address, telephone number and professional license number, where required. 3. Name, address, telephone number and professional license number of each subcontractor. 4. A complete description of all work to be done. S. The grade and quality of all materials to be used. 6. An agreed upon starting and completion date. 7. The cost of the total project. 8. A payment schedule showing the amount and date of each payment. 9. All warranties. 10. Financing arrangements. GOVERNOR'S OFflCE OF CONSUMER AFFAIRS BARRY W. REID, ADMINISTRATOR 2 M.L. KING, JR. DRIVE, SUITE 356 ATLANTA, GEORGIA 30334 - 4600