General Contractor Help Needed (1 Viewer)

[Alex S]

We had a flood in our basement recently form a broken washing machine. We want to gut the basement and refinish it.

We've had 8 estimates so far. The last guy that came I liked the best and felt most comfortable with him. Plus he had the best ideas and was one of the lowest estimates.

When he came to my house he asked me if would be paying cash. I told him I would be.

When I spoke to him on the phone yesterday I asked him when will you becoming by with the contract. He said since you're paying cash we can't have a contract. He said he will make a list up of everything that needs to be done.

Is this true ?
Should I not pay cash ?
I just don't want to have problems later on.
Anyone have any advice ?

Thank you.

 

[Jesse Leonard]

Get a contract signed before giving him ANY money!

 

[LewB]

I'll also bet he has no insurance either. The cash transaction allows him to fly under the radar so to speak. I'll guess he would also talk you out of getting a building permit.
I would run from this guy as fast as I could !

 

[Alex S]

Jesse,

Can you have a contract if you pay cash ?

 

[Jon_Gregory]

Yes, a contract can be had if paying by cash. If the guy does not want to sign a contract, DO NOT DO BUSINESS WITH HIM. This will give him the right to take your money and do no work. And you will have no legal way to get your money back. RUN, RUN far away from this guy.

 

[Alex S]

He just called me.
I told him I didn't feel right about not having a contract.
He said I could pay any way I wanted to.
He said he wanted me to feel comfortable with him.

He gave me a reference of his last job.
I called them and they loved him. I'm going to their house tomorrow to look at his work. They had their basement done too.

 

[Bruce N]

Deposit the cash in your bank account. Sign a contract. Pay with a check.

Any other way is nuts.

 

[Alex S]

I just thought of something ,isn't there no tax on home improvement anyway ?

 

[Alex S]

Bruce,

I plan on paying him by check not cash.
But can he charge me more by paying for check ?
There shouldn't be any tax on home improvements.

 

[LewB]

Sure ! Paying by check leaves a paper trail which now causes him to have to at least think about reporting this income. You'll pay more to make up the amount of tax that he figures he'll have to pay on his income from your check.
The 'no tax on home improvements' comes on the material purchase. I'm not sure how they 'prove it' to the seller of the materials that the stuff being purchased is part of a home improvement. Proof that your local building department knows about the job (building permit) might be involved.

BE VERY CAREFUL when paying. Pay as little up front as is possible !!! Your only leverage to get problems fixed is to owe the guy as much as you can. Problems that are detected after the payoff are hard to get fixed since the contractor has already been paid.

 

[Alex S]

Thanks Lew.

I guess paying the extra cost will be worth the piece of mind.

He's not a fly by night guy. He came highly recommended by 2 people. The woman I spoke to whose basement he just finished said he's very reliable, He's done a lot of work in their house before. She said whenever she needed him to come back for something , she just called him and he came right away.

 

[James_S]

Alex,

First off what State are you located in? I know here in Washington State you can go to the states website to see if a contractor is license, insured, and bonded. Depending on your location I would check to see if he is licensed.

Also if he does not have Industrial Insurance (Workers Comp) with the State or Insurance company, you could be liable for all cost of fees associated with your job. This could happen if a State/Local Rep comes to your jobsite and finds out they he is not insured or if someone gets hurt on the job.

DO NOT PAY IN CASH! What he is trying to do is not trying to pay taxes, state, federal and any other taxes.

1 or 2 references in my opinion is not enough, as far as you know the "references" are friends or relatives. I have seen it before. Get more references.

Also, check with your Better Business bureau and see if there have been any complaints made against him.

Cash, check, credit card, your first-born, trade or anything
NO CONTRACT! = NO WORK!

If you need some help please feel free to e-mail me and I can see what I can do.

 

[LewB]

Not sure where you are located, but you might want to see if the work you need to have done requires any permits.
Be careful if the locality says yes, it needs permits and the contractor says 'you don't need no stinking permit'
The permits will cause your home assessment (taxes) to go up but will also keep the contractor honest with inspections to assure that his work is safe and up to code. You as the home owner are ultimatley responsible for any non-permitted work that is discovered later (sale or re-fi). I know someone who had to rip open a 20 year old bedroom addition and re-build it to today's codes due to fact that the work had been done without a permit.

 

[CalvinCarr]

Also check the better buisness bureau in your area. If he gave refrences how can you be sure it's not just friends of his? Make sure he is licensed and bonded.

 

[Alex S]

James and Lew I am in NY.

Do you know of a website I can check to see if he is licensed, insured and bonded ?


Lew, whom can I call to find out if I need a permit ?
He's going to gut my basement, put up new studs and sheetrock and put in hi-hats.

Thanks.

 

[Brian Perry]

Truer words were never spoken.

I am trying to work out a settlement right now with a guy (recommended by a friend) who pretty much stiffed me on my basement. I've paid him $8,100 out of the $8,600 or so that the project was supposed to cost, yet he's actually finished only about 25% of the job. He started out great and gained my confidence enough for me to advance him more money than I knew I should. And sure enough, after he got the majority of the money, he suddenly disappeared to work on the other five jobs he was trying to juggle at once. I had no leverage to get him back to finish in a timely manner.

I finally lost all trust and told him I didn't want him back. I was afraid he would fake an accident in my house and sue me or my insurance company. And this was someone I felt comfortable enough to give a key to my house! (I've since changed the locks.)

 

[Alex S]

Brian,

I don't plan on giving him much up front at all.
He only works on one job at a time and has only one crew.
So, jumping back and forth between jobs isn't a problem.

 

[Malcolm R]

From the NY State website:

 

[Jeff Ulmer]

I would get him to detail everything that is going to be done in writing, with the costs associated for the job. While verbal agreements are legally binding, they are unenforceable.

Part of that agreement should include completion dates, and quality of mterials to be used. It is not uncommon for work to commence, a deposit be made, and the contractor to disappear. It is also not that uncommon that low bids equal shoddy materials and/or workmanship. Get your permits, and have things inspected, but also realise that inspectors are not always that great. I have seen one case where an inspector failed to notice that a bearing wall had studs at 3 foot centers instead of 16 inch centers, and when sued, got off because he hadn't measured them, assuming they were installed correctly by the contractor.

If there are any structural modifications, ie moving walls, make sure to have the plans inspected by an engineer. If you are simply partitioning, there is less likelihood of the contractor seriously damaging your home, but you want to be sure he has insurance if something goes seriously wrong, either during construction, or down the road. Make sure any subtrades are licenced as well, or your insurance may not be in effect if there is any damage caused by faulty wiring or plumbing.

I would also keep a log book of the work's progression, just in case. The cash payment and resistance to a contract suggestion would raise a red flag for me.

 

[Alex S]

Jeff,

Thanks for the reply.

When he came over to give the estimate he asked me how I would be paying. I think he did that just to figure out his price. If I would have said check the price would have been higher. It's not like he said I had to pay cash.

He did say he was going to write everyting down that he was going to do. He is coming over Monday with 2 "contracts", one paying by cash and one by check.

He wasn't the lowest estimate. Him and 2 other contractors had almost the exact same price. 2 others were higher.
As far as using shoddy materials, he is the only contractor that is removing the old studs and putting up new ones with steel on the bottom in case we ever have another flood, the steel will prevent the bottom studs from getting wet.

My basement was already finished (years ago) when the flood
happened so I don't need any building permits.
I called my town's Building Dept.

There are 2 things I am wary of with him.

1) He is going to remove our existing oil tank that is
behind a wall in the basement and move it into the
boiler room to gain space in the basement. He says it's
no problem being next to the boiler. I called my oil
company up and they said it has to be 5 ft from the
boiler per NY State law. Another contractor also said
it's no problem putting the new oil tank next to the
burner. I think I have enough room anyway for it to be 5
ft away.

2) He wants to move the one support column in our
basement 3 feet over and bury it inside the wall to open
the room up. He said the 8 inch steel I-beam we have is
more than enough to hold the load and moving the column 3
feet is not a problem.

My friend is an architect and says the contractor should
have an engineer or architect look at it first to be
sure. He offered to look at it for me.
We're leaning towards leaving the column up now.