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BBB: Top 10 things to do when hiring a contractor

Spring was a long time in coming, but now that it's here, people are going to be more anxious than usual to tackle construction projects. Whether it's a remodel, an addition or a design-build, many consumers will turn to professional contractors to bring these jobs to completion. The Better Business Bureau of Minnesota and North Dakota has a Top 10 list of things people should do before hiring a contractor.

"Successful projects often hinge on taking the time to choose the right contractor," said Susan Adams Loyd, President and CEO of BBB of Minnesota and North Dakota. "That crucial first step can be the difference between a rewarding relationship and a satisfying outcome versus roadblocks, unexpected delays and headaches."

Here are 10 things everyone should do before hiring a contractor:

1. Research their track records. Visit bbb.org to obtain free Business Profiles on companies you are considering hiring. This gives you access to customer complaints and business responses, as well as any customer reviews on file. In Minnesota and North Dakota, call toll-free at 1-800-646-6222.

2. Solicit multiple estimates. Shop around and get at least three estimates in writing. Use BBB Search or BBB Request a Quote to find reliable firms.

3. Verify licensing and insurance. Ensure that companies are properly licensed. In Minnesota, contractors should be licensed or registered with the Minnesota Department of Labor and Industry (www.doli.state.mn.us); in North Dakota, with the ND Secretary of State's Office (sos.nd.gov). It's also important to verify that they are fully insured.

4. Ask for references. Get references from three recent projects and follow up on them before signing a contract.

5. Inquire about a lien waiver. A lien waiver is a statement from the contractor that all suppliers and subcontractors have been paid for their work. Be sure to ask whether the contractor will provide you with a lien waiver upon completion of the work.

6. Don't forget building permits. Permits are for your protection and help ensure that work performed meets local building codes. Check with your contractor before starting your project. Homeowners are responsible for the cost of building permits, but companies should be responsible for obtaining any necessary permits.

7. Consider future service issues. If you choose to do business with a company that isn't local, keep in mind you might have difficulty resolving any warranty or service needs which may arise after the project is completed. Be clear on how and in what timeframe warranty issues will be addressed.

8. Get everything in writing. Never allow work to begin without a signed contract that includes: start and completion dates; a detailed description of services to be provided; any costs or allowances; a payment schedule and warranty information. Be aware that anything you sign is a contract.

9. Don't rely on verbal promises. Any promises made orally should be written into the contract, including warranty information.

10. Arrange a payment schedule. Never pay in full in advance of a project. Stagger your payments according to agreed-upon stages of work completion and make a final payment only when work is finished.

BBB also advises consumers to exercise caution with salespeople who are going door-to-door claiming to be doing work in your neighborhood. Know who you're dealing with; always verify the company's track record with BBB before making a hiring decision.

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