Ask the Pro
Get It In Writing!
When you hire a contractor to work on
your home, you need to be protected from a number of risks. These fall
into two general categories:
- Risks related to poor work or dishonesty
by the contractor, and
- Risks related to accidents that cause
damage to property or injure someone.
The best protection from risk is to hire
a contractor with a solid reputation for doing good work, and having a
comprehensive written contract in place before the work begins.
Some consumers choose to deal with
"underground" contractors who charge less, but only work for cash and do
not provide a written contract. This type of business arrangement
involves significant risks that you need to be aware of. This web site
provides information about these risks, and how to avoid them.
The first step is to examine some of
the questions consumers should ask about underground "cash deals".
Why is the price lower?
Everyone loves a bargain. But when it
comes to hiring a contractor to work on your home, a "special cash
price" can mean a lot of extra risks.
It's no secret that some contractors
offer to do work for unrealistically low prices. Part of the "deal"
involves paying them in cash without a written contract or a receipt for
monies paid.
Homeowners who get involved in cash deals
usually assume the contractor is cheating on taxes in order to offer the
low price. They also assume that the contractor is the one who runs all
the risks-after all, it is the contractor, not the customer, who ends up
not declaring the income on their tax return.
In reality, underground cash deals involve a lot more than evading
taxes-and considerably more risk than homeowners imagine.
Whether it involves new home building, a
cottage, a major renovation or something less substantial like roofing
replacement or kitchen remodeling, residential construction is a fairly
complex business.
Municipal building codes, permits and
inspections make sure things are done the right way.
Provincial regulations govern the health
and safety of workers as well as hazards related to equipment and
chemical use.
Workers' Compensation programs protect
workers injured on the job.
Contractor liability insurance protects
customers in the event of an accident, damage to the home during
construction, or damage or injury to third-parties such as the
homeowner's family and neighbours.
A written contract sets out what the
contractor will do, the work schedule, the price you will pay and the
terms of payment.
Provincial lien regulations limit the
homeowners' liability in the event that the contractor fails to pay
suppliers and sub-contracts.
A written warranty provides customers
with some assurance that they will get what they pay for.
Taken together, these measures serve to
protect customers. They reduce the chance that serious mistakes will be
made. And they provide protection for the customer in the event that
something goes wrong.
However, all of these measures require "paperwork" and records-something
underground contractors must avoid for fear of being caught for cheating
on taxes. And that is the real secret behind the underground
contractor's low price. When you get involved in a cash deal, there is a
lot more than taxes being evaded.
Get It In
Writing Part Two
