Whether you are looking to do a simple fix up or an entire remodel of your rental property, every Maryland landlord will need to hire a contractor at some point.
Although most repairs or maintenance issues can be handled without the use of hired help, sometimes the reality is that a job is too large or difficult to manage yourself and requires a contractor to complete.
Deciding on which contractor to hire can be confusing.
There are specific things to be aware of before hiring someone to perform work on your home in order to prevent substandard workmanship.
To lessen the risk of becoming the victim of poor workmanship or worse, a scam artist, take a look at these 12 things to help you hire a good contractor:
What to Look for in a Contractor for Your Property
1. Check licensing, insurance, and bonds
Before allowing anyone to perform work on your rental property it is essential to confirm that they are qualified to do the work in the state of Maryland. In order to legally carry out any type of home improvement work on your home, the contractor must be licensed to do so.
Before hiring a contractor in Maryland, request to see their MHIC license. Check online with the MHIC to make sure the license is current and in good standing.
If a contractor indicates that he will hire subcontractors to perform some of the work at your home, request those licenses as well.
Contractors are insured so that any claims made shift from your personal insurance to their general liability insurance instead. This way you are not held personally responsible for claims made.
- Always have yourself added as an additional insured to the contractor’s general liability policy.
- Verify with the insurance company that the contractor has adequate coverage to complete the work contracted for.
- Include in your written contract that the contractor is required to maintain adequate general liability coverage and that their insurance is to be the primary carrier should any claims get filed in the future.
- If the contractor has employees of their own working in your home, request to see their current worker’s compensation insurance certificate.
Bonded work is guaranteed by a third-party (the issuer of the bond). If the contractor fails to perform the work, pay subcontractors, obtain proper building permits, or performs substandard work, you can file a claim with the bond issuer for compensation.
Never hire a contractor that is not licensed or bonded and does not have insurance to cover future claims. By researching the contractor you hire beforehand you are protecting not only your rental property but yourself as well.
2. Secure Your Payment Plans
It is a good idea to get your payment plan outlined and in writing before the work on your home begins.
- Expect to pay a deposit upfront (especially for larger projects) but beware of those requiring payment in full before work initiates.
- In Maryland, home improvement contracts cannot require the payment of more than one third of the total contract price at the time of signing the contract.
3. Expect Some Fees
Read the fine print of your contract to get a full understanding of the potential fees you are responsible for.
- Don’t be surprised if contractors markup their completed project prices as much as 10% above actual costs for materials.
- Know whether you will be charged the credit check you agree to have the contractor run.
- Understand the interest or finance charges you will be responsible for should payments not be received on schedule.
4. Look for Experience
Match the contractor to the type of work you need done on your rental home.
General Contractors – Manage all aspects of a project, including the hiring and supervising of subcontractors, getting building permits, and scheduling inspections.
Specialty Contractors – Install particular products such as cabinets and bathroom fixtures.
Architects – Designs homes, additions, and major renovations involving structural changes.
Designers – Can be considered design or build contractors providing both designing and building services.
Make sure you feel comfortable from the start with the type and frequency of communication with your contractor and their company. Avoiding your calls, dodging specific questions, and not being available for consultations are some of the warning signs that you may not work well with a particular contractor.
6. Get a Guarantee
Sometimes, despite all of your research, the work completed may be substandard. If you are working with a reputable contractor, a warranty will be covered in the contract.
- A general warranty may include any problems that arise within one year of the work’s completion be fixed free of charge and within a reasonable amount of time.
- A good warranty will include material defects and workmanship errors.
7. Ask for References
Asking for references is always a useful practice when searching for a reliable contractor.
- Ask friends, family, and even other contractors for specific contractors that provided outstanding work and keep this list handy for future reference.
- Follow up on any references the contractor you are seeking to hire may have provided you.
- Check for customer complaints by calling 410-230-6309 or 1-888-218-5925. Ask if any complaints have been filed against the contractor you wish to hire and whether they have been resolved or are still open.
8. Get a second opinion
Do not hire the first contractor you speak with. There are a number of qualified contractors in Maryland, so be sure to research them first.
- Compare the contractors’ general knowledge, their quality of work, and their responsiveness to your requests for more information.
- Ask questions and don’t hire anyone unless you are completely confident they will provide quality work for your money.
9. Have a Written Contract
This may seem obvious but do not fall prey to a contractor who refuses to put anything (and everything) in writing.
- Put all things into the contract and have all involved parties sign – scope of work, pricing, payment schedules, proof of insurance/workman’s compensation, start date and projected completion date, and specific materials and products to be used.
- All changes to the scope of work should be in writing so they can be legally enforced.
- Dispute Resolution Clause – Determine how disputes will be handled. Will you use a mediator? Will costs of mediation be shared? What length of time must pass before an actual dispute claim can be pursued by wither party?
As of April 22, 2010, new federal regulations require that:
“…contractors, handymen and landlords who perform renovation and repair work in most residences built before 1978 be certified by the U.S. Environmental Protection Agency (EPA) and follow specific work practices to prevent lead contamination.”
This includes: Modification of doors, walls, and ceilings, particularly sanding, scraping and window repair. Removal of walls, ceilings, plumbing, and windows. Any type of weatherization. Conversions of any building into housing.
11. Sign-off Checklist
When all of the work is completed consider using a sign-off checklist to confirm all of the contracted work has been finished according to the terms both parties agreed to. Include things such as:
- All work was completed according to the written contract.
- Proof that all subcontractors and suppliers have been paid.
- Written warranties for materials and workmanship were provided with contact information should an issue arise.
- Both parties have inspected the property and workmanship and are satisfied.
There are many ways in which a contractor can scam you out of your money leaving you empty-handed, with no work completed, and no way of legally pursuing the business because they have simply vanished.
The goal is to protect yourself and your rental property from falling victim to those who make a living out of tricking good people such as yourself.
Know the warning signs of an unreliable contractor and steer clear at all costs.
Whether it’s to save money or save time, choosing a contractor that isn’t right for you can have long-term repercussions.
Being a landlord in Maryland is no small feat.
With time-consuming things such as remodeling your home and hiring reputable contractors to do the work for you on your list of things to do, consider hiring your favorite Maryland property management company to handle all of the other details regarding your rental property such as rent collection, tenant screening, maintenance, and more so you can concentrate on other things in your life.