Working with Contractors

​Every state has its laws and regulations when it comes to contractors.  Do these requirements pertain to contractors and subcontractors and dictate classes of licenses and years of experience needed?  

​The Investor’s Guide to Working with Contractors
By Pierre Mouchette | Real Property Experts LLC

Contractors!
The term contractor is often used interchangeably with everyone working in construction.  In this article, we want to clarify this. 

Handypersons
These are individuals that know how to do a multitude of tasks and are multifaceted (handy).  Handypersons are great for small jobs or detail-oriented jobs and do not need a license for the type of work to be performed. 

Licensed Contractors
Every state has its laws and regulations when it comes to contractors.  These requirements pertain to both contractors and subcontractors and dictate classes of licenses and years of experience needed?  Yes, there are many variables, and it is up to you as an investor to verify your state requirements.  
For enlightenment, a General Contractor (GC) usually oversees all the subcontractors on the project.  Often the GC is the one that is also tasked with being the Project Manager, managing and selecting subcontractors and the trades.  Whatever is decided, be clear who is responsible for what, what the compensation is, and all terms of the agreement.  The agreement must be in writing so that it is unambiguously spelled out!
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The property owner can choose to be the Project Manager, with the following tasks

• select and hire the GC
• approve the subs determined by the GC, or fire them for non-performance
• coordinate the project with the GC
• schedule the project with the GC
• order materials and schedule deliveries
• track expenditures
• pay the bills in a timely fashion

No matter what you decide, you must confirm that all contractors are licensed, bonded, and carry their insurance.  Confirm all information with your state's online database.   Additionally, you should ask to see some other form of ID to verify that the person in front of you is the person that is licensed. 
 
One Of, If Not the Most Important Subject – Payment
Be sure to spell out how payments to the contractor, subs, materials suppliers, etc., will be made.  If a contractor hires subs and does not pay them, they may place a lien on your property.  Suppose there are materials bought or subs hired by your general contractor. In that case, you need a system to be sure the material supplier or subcontractor signs off and releases any lien rights to your property at the time of payment.  If you are not experienced in this area, make sure you TALK TO YOUR ATTORNEY AND DISCUSS WHAT NEEDS TO BE DONE TO COVER YOURSELF AND YOUR PROPERTY LEGALLY.