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Originally published August 25, 2012 at 11:15 AM | Page modified September 3, 2012 at 9:16 PM

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This contractor's terms are not acceptable

Home Fix: Dwight Barnett answers home-improvement questions. This week's topic is on how to work with a contractor and avoid getting taken.

Dwight BarnettScripps Howard News Service

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I hired a general contractor to oversee a renovation to my 988-square-foot two-story farmhouse. The contractor charges me 20 percent plus an hourly rate when he is on the site.

He does not inspect the work his subs do because he says they are professionals and don't need to be watched. He has come up with two payment plans. Plan A is $5 per hour plus 20 percent ($80,000) and plan B is $50 per hour plus 10 percent ($70,000). If I don't agree to his terms on things, he says he will be following plan A rather than B. I feel trapped, confused and helpless. Not to mention everything is breaking. Can you help me?

So the general contractor is making 20 percent profit on the work performed by the subcontractors, plus he charges you by the hour when he's there, but he does not oversee their work. Bad idea!

Most contractors are hardworking, honest individuals, trying to eke out a living in a struggling economy, but there are exceptions that give the industry a bad name. When I was a builder, I was in charge of the entire project and I was the one who had to make all the arrangements for the subcontractors so that the plumber, for example, did not show up before the carpenters had finished the framing.

I also had to make sure that one trade did not damage the work performed by another trade. I once found a situation where a subcontractor had accidentally cut some electrical wires running through an interior wall. Their solution was to simply tape the wires together and go on with their work. Had I not found the damaged wiring, the circuit from that wire may not have worked, or worse, the house could have caught fire.

The general contractor is responsible for all work completed by the subcontractors.

When someone is paid by the hour, they have little incentive to complete the work in a timely manner. When they are paid by the job, they have a huge incentive to get the work done as quickly and efficiently as possible and go on to the next project.

It's time to sit this person down and explain that you want a contract with a finalized price, a time for completion, a copy of his insurance and licenses, if required, and all permits filed with your local building authority.

Do not pay another dime until you have had the work inspected and approved by a building inspector from the county or by a home inspector of your choice.

If the general contractor is not willing to meet these demands, change the locks and get a new contractor. With a contract price there probably will be cost overruns on some items, especially on an older home, but all additional costs should be explained by the contractor in writing and signed by you before changes are made.

If the job is already finished, hire a home inspector to check the completed work, and if there are damages, improper or incomplete repairs, seek the advice of an attorney.

Dwight Barnett is a certified master inspector with the American Society of Home Inspectors. Send home-improvement questions to him at C. Dwight Barnett, Evansville Courier & Press, P.O. Box 268, Evansville, Ind. 47702 or email him at d.Barnett@insightbb.com. Always consult local contractors and codes.

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