Any remodeler who raises red flags is one we believe you should not consider further. If you get an unsatisfactory response to even ONE of these questions, we recommend you disqualify them from consideration.
1. The remodeler cannot show that they have a currently registered business and are currently licensed as a contractor to do the kind of work you are looking to have done.
2. The remodeler is unwilling to provide you the street address of the business. It is okay if they use a PO Box for mail and it is okay if they work from their home as many small and midsize remodelers do, but you want to know they are indeed more than a mailbox should you ever need to find them.
3. The remodeler is unable to show you proof of current insurance coverage for general business liability and that the insurance is of an amount satisfactory to you.
4. The remodeler is unable to show proof that they provide workers’ comp insurance for their employees and other workers on your project that they may be liable to cover. (Workers’ comp helps protect you as well as the business owner and worker.)
5. The remodeler is unable to show you proof of applicable licensing, business liability insurance, workers’ comp, etc. from their subcontractors. Note that not every remodeling specialty is required to be licensed in all jurisdictions.
6. The remodeler does not agree to provide you with lien waivers from the remodeler and subcontractors, materials and product suppliers.
7. The remodeler does not pull building permits for projects when they are legally required to or asks you to take them out in your name. Not pulling a permit is illegal and means your work will not be inspected to assure that it meets building code. If the permit is in your name and the work does not pass inspection, you are responsible for it passing inspection. If the remodeler takes the permit out in their name, they are responsible for it passing inspection.
8. The remodeler uses questionable (unfair, misleading, unethical, illegal, etc.) marketing tactics such as offering a Free TV, “$1,500 or 15% off” of a project when you have no way of knowing what the project would normally cost without the discount. If you got a flyer or coupon and it says to present it before an estimate is given to you, you surely don’t know if you are getting a discount or just getting had.
9. The remodeler puts “undue” pressure on you to make a purchase decision immediately without giving you the time you need to think about it. For example, they may say the offer is only good until they walk out of your home, then the price goes up. You may in fact be ready to sign with a remodeler at the first visit and that is fine. But if the remodeler unduly pressures you, that should raise a red flag.
10. The remodeler does not provide you clearly and in writing with the fact that on consumer contracts — such as most remodeling projects — there is a “cooling off” period (often 3 days) during which time you have the right to change your mind. Some unscrupulous remodelers may tell you, but ask you sign a waiver of your right.
11. The remodeler won’t give you a reasonable number of client references for you to talk with, or the people they give you are difficult to contact or can’t be found.
12. The remodeler wants the full payment up front.
13. The remodeler will not allow a portion of the project to be paid after completion.
14. The remodeler requires the payment made in cash, a check made out to cash, or to someone or a company other than the remodeling firm you are hiring.
15. The remodeler gives you a price that is much lower than those you are getting from other remodelers whom you know to be legitimate and reputable. This could mean: the remodeler is “low-balling” and will find a way to increase the price later; the remodeler didn’t estimate the same project (same quality, quantity, materials, craftsmanship, etc.) as the others; or the remodeler doesn’t know how to estimate and might not be able to complete the project when they find they have priced the project too low.
16. The remodeler appears to be on shaky financial footings. This could mean they may not be in business long enough to complete your project, pay their suppliers or stand behind their work.
17. When you try to confirm business address, references, insurance, business license or other information the remodeler has given you (and you should verify it), things do not check out.
If the remodeler you are considering raises NONE of these Red Flags, proceed to the “Yellow Flags.”