WATCHING YOUR CONTRACTORS

© Copyright 2014 Landlord.com

By Bob Cain
www.rentalprop.com
Copyright 2005 Cain Publications, Inc.,used by permission

Landlord Pete knew that the back porch was really rickety on that duplex over in the north end.  Since he wasn't a skilled enough carpenter to do the job right, he knew he was going to have to pay someone to do it.  Problem was, he didn't know whom to call.
 

The classified ads in the newspaper always have people who want odd jobs, so he looked there.  Joe, an all-around handyman who worked cheap, had one that really caught his eye.. The cheap part really appealed to Pete, so he called him.

Pete left a message for Joe on his answering machine, and Joe called back the following evening.  Not the best sign in the world, especially since he didn't even offer an explanation for his taking so long to return the call.  He did say that he could come over to the duplex in the morning, though.  Pete set an appointment for 10 o'clock.

Pete was there a little before 10, and at 10 Joe wasn't there.  Since he had some work to do anyway, he putzed with that while he waited for Joe.  A little after 10:30 he put in an appearance. Another bad sign, since he again offered no explanation or apology for being late.  Pete suspected that Joe might have had a drink or two already.

Pete took Joe to look at the back porch.  He poked around a little, actually noticed the dry rot, wiggled and prodded a few other things, and said "$100."

Boy, did that ever sound reasonable.  Pete asked him when he could get started and how long it would take.

"Oh, I can start this afternoon. Should be finished by 5 or 6."

Pete had heard that everyone who works on a property should be licensed, bonded and insured, so he asked Joe if he had a license from the state contractors board.  Then the tirade began.

"The state is just trying to put the small guy out of business!  What a ripoff!  Yeah, the big guys can afford all that license and bonding stuff, but us little guys have to watch every penny.  Do you know how much it costs to get a license and all that from the state?"  Without waiting for Pete to admit that he didn't, he told him, "They want over a thousand dollars.  Then the bond is another few hundred.  Then there are a bunch of other picky rules.

"If I got all that, I'd have to raise my rates so you small guys couldn't afford me."

Not wanting to set him off any more, Pete began thinking, how much can he mess up a porch?

Pete told him he could do the job.

About 5:30 he called to say the job was done.  Pete drove over to check it out.  It seemed to look okay, but what did Pete know, he was no carpenter.  Joe didn't say much, so Pete had to investigate the work without any guidance.  The job looked neat and tidy.

Pete wiggled where it used to wiggle, and it didn't.  He prodded where it used to be soft and it wasn't.  He poked where a screwdriver used to go right into the wood, and it didn't.  Joe hadn't stained the new wood, but Pete hadn't asked him to and he could do that anyway.

Pete paid Joe off and thanked him for a fast, efficient job.

A couple of weeks later Pete got a letter from an attorney.  It said that one of the tenants in the duplex had the newly repaired porch collapse under him, causing him to fall down, break his arm and dislocate his shoulder.  The injury meant he would miss at least a month of work, plus he had the hospital and doctor bills to pay.  The letter from the attorney demanded that Pete pay $5,000 for the damages.

Pete goes into shock.  Immediately he called Joe's phone number.  Disconnected.

Pete then called his attorney and told him the situation.  He said he would check into it.  Pete called his insurance agent.  He told Pete that he wasn't covered.  Ideally, Pete should have had an umbrella policy that would protect him from problems such as this, but he had decided he didn't need one.

A few hours later Pete's attorney got back to him.  His news was far from good.  Joe, it turns out, had had his contractor’s license revoked and his bond used up because of other shoddy work he'd done.  There was no listing for him with the phone company and the ad wasn't in the paper any more.

Then, Pete's attorney explained the facts of life to him.  Sure, if they can find him, they can sue Joe, probably get a judgment, and probably never collect.  Pete, as the person who hired Joe, though, was ultimately responsible for any damage or injury that came about as a result of his work.  Pete's options are to pay up now or go to court, where he will surely lose and have to pay not only for the injury to the tenant and his lost wages, but also court costs.  "Settle while you can," suggested the lawyer.

No, this story is not an actual case, even one where the names have been changed to protect the foolish and miserly.  However, the facts of the case fit exactly what has happened to too many landlords.  Trying to save $10, they put themselves at risk for losing thousands.

Smart and experienced landlords usually have regular contractors they use for repairs and maintenance on their rental properties.  They know the work these folks do will never result in a tenant or a tenant's guest being injured and will always look and be professional.

But think about this: even if there were no injuries of any kind, the entire situation of landlord Pete begs the question, what kind of job can you expect from an inexperienced, incompetent or careless contractor?  It is simply bad business to allow people to work on your investments who will not do a workmanlike job.

At some time in the future you may want to sell the property.  Sloppily done work is usually obvious.  If you look at much property, you can spot it in an instant.

Sloppy work fetches a sloppy price at best, the wrong end of a judgment at worst.

When you are looking for a contractor, always:
1. Ask for a certificate of insurance.
2. Ask for references of most recent work.
3. Get an estimate in writing.
4. Check with the Better Business Bureau.
5. Have a signed contract from both parties.
6. Schedule a specific time for a meeting to discuss the work.
7. Explain all your needs and expectations to prospective contractors up front.
8. Make sure that all questions are answered to your satisfaction.
9. Quiz contractors and expect detailed answers.
10. Ask a contractor to show permits if necessary.

And never:
1. Begin work without a signed written estimate.
2. Hire a contractor based on price alone.
3. Pay for a contract in full up front.
4. Be afraid to ask questions at any stage.
5. Be intimidated by overbearing contractors.
6. Pull any permits when hiring a contractor; this is the contractor’s responsibility.
7. Forget the contractor is working for you.
8. Take advantage of the contractor.
9. Hire a contractor you feel uncomfortable about.
10. Allow additional work without a written change order.

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Robert Cain is a nationally-recognized speaker and writer on property management and real estate issues. For a free sample copy of the Rental Property Reporter call 800-654-5456 or visit their web site at www.rentalprop.com.

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