Remodeler Beware
At best, remodeling is disruptive, expensive and trying.
At worst, as Mitchell Ackerman and his wife, Lenni Conrad, discovered, it can be a horror story. It began when they decided to redo a small master bathroom in their Tarzana home. No problem, they thought.
They hired Home Depot’s EXPO Design Center in Monrovia last year as their general contractor, but the company didn’t even start the job for six months. Ackerman recalled it was “then the circus really began.”
It was 9:30 at night before materials were delivered. The tile subcontractors changed their clothes in the frontyard, used brown grout instead of white and splotched an outdoor deck. The plumber installed the hot and cold faucets backward.
The bathroom was finally finished 14 months later--and only after threats of a lawsuit. Ackerman had hired EXPO Design Center because he owned stock in Home Depot and figured the company would offer the best service for the cheapest price. But, he said, “they didn’t hire the most skilled people.”
An EXPO Design Center spokeswoman, Melissa Watkins, said the company does extensive checks on potential subcontractors, including criminal-record, credit, license and insurance checks. “We should have done a better job in [Ackerman’s] case. But it’s an imperfect process. And we did ultimately fix the problems.”
To avoid such nightmares, homeowners must know and demand their contractual rights.
Some 26,000 complaints were made against contractors last year, according to the Contractors State License Board, which licenses and regulates about 278,000 contractors in the California construction industry. Further investigation resulted in 2,360 citations, 587 license suspensions and 702 license revocations. The most common complaints were poor workmanship, job abandonment and contract violations.
An iron-clad contract may be the homeowner’s best protection. Attorney Belle Mason learned this when the fireplace in her West L.A. home cracked after the 1994 Northridge earthquake. She hired a general contractor to replace the fireplace with windows, and had him do other remodeling projects without asking for a detailed contract.
“All we had was a one-page proposal,” she said. Mason lost a lawsuit when her contractor sued her for payment on the extra work, which hadn’t been properly documented.
Mason went to a detailed 10-page contract on her next remodel, which stipulated that any additional projects and materials required written “change orders” signed by both parties.
The project was done by Bill Simone, owner of Custom Design & Construction in Los Angeles, whom she hired last August to redesign her bedroom, bathroom and dressing room. Their agreement included the cost and a detailed description of all materials used.
“Most people spend more time planning a one-week vacation than they do a major remodel they have to live with for years,” said Simone, also the author of “Six Secrets to Successful Remodeling: The Report Fly-by-Night Contractors Hope You Never Read.”
A contract should specify a start and end date for the project, said license board spokeswoman Tracey Weatherby. It should also include a payment schedule outlining the down payment and when fees will be paid.
When comparing job estimates, if one contractor makes an unusually low bid (more than 20% below other proposals), it’s often a warning that the contractor will cut corners, either by using cheap materials or abandoning the job partway through--after collecting the deposit.
According to California law, the down payment cannot be more than 10% of the entire project, or $1,000, whichever is less. Payments are usually made in 10% to 15% increments or at such stages as framing or plumbing, when an inspection is required.
“If a contractor wants a payment of 40% or more after the first stage,” said John Johnston, owner of All-Pro Remodeling in Orange, “his motivation won’t be as strong to finish.”
Ackerman found that out the hard way. Although his contract did not require it, he paid the entire $13,000 for his bathroom remodel up front.
“I thought they would treat me better if I prepaid,” he said. “Instead, the project dragged on, and I had no recourse because I had already paid.” Homeowners should hold 5% to 10% of the payment until after a final walk-through with the contractor, advised Alan Hanbury Jr., head of the National Assn. of Home Builders Remodelors Council.
Homeowners should check for such last-minute work as touch-up painting, not relying on building inspectors--whose job is to focus on safety and structural integrity--to point out cosmetic details.
At completion, suggested Simone, owners should obtain a written lien waiver, a legal document proving payment.
Without this waiver, subcontractors or suppliers could claim they hadn’t been paid by the general contractor; and owners could be forced to pay twice or risk losing their homes.
Contractors generally offer two types of payment options.
A “time and materials” agreement requires payment for actual labor and materials used, plus 10% to 50% for overhead and profit. This arrangement might work for small remodeling jobs, but larger projects could cost far more than expected. Contractors might also use this to cover costs if they bid too low.
A more customer-friendly “fixed sum” agreement requires the contractor to perform the work for one lump sum, assuming all responsibility for completing the job. Simone said the contract should describe materials, colors, brands, sizes and model numbers in a detailed list.
One alternative offered by some contractors is called an allowance or overall budget.
Hanbury warned homeowners to be careful about allowances. “This is where contractors delude a client by deliberately offering a low bid and then buying cheap materials.”
Homeowners need to be aware, too, of the pitfalls of the permit process.
“A reputable contractor will pull permits for every job,” Simone said. “If you obtain the permits yourself, the liability rests on your shoulders if anything is not up to code.”
Elaina Ballew and her husband wanted to get the permit themselves when they knocked out a wall to enlarge a bathroom in their Burbank home. But a city building inspector told them the contractor should do it because of the complicated rebuilding involved. Ballew said: “I now know this was for our protection.”
Further safeguards in contracts include warranties and such provisions for dispute resolution as mediation or binding arbitration; lawsuits can be expensive to both parties.
Mason can attest to that: The lawsuit with her contractor lasted 31/2 years and cost her $14,000.
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Karen Lindell is a Sierra Madre freelance writer.
