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Manage Residential Construction Project

 

How Do I Manage a Residential Construction Project?

 

 

Taking Charge: What do I need to know when I am going to manage a building repair, remodeling, or construction project?

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Are you prepared to take control, and keep control, of the work that you are paying for? Home improvement and remodeling jobs can be overwhelming. Follow these steps:

  • If you cannot be on your premises at all times, arrange for someone you trust in your household to be home while the work is in progress. The supervisor should be sure the materials and the fixtures are examined before they are installed and check the work at each step.
  • Point out shoddy work to the contractor immediately and see that it’s corrected before the work proceeds.
  • When remodeling, never pay the bulk of your total project price up front. Try to reserve the majority of the balance due upon completion of the job and upon your approval. A good rule of thumb is a deposit at a maximum of only 10% plus actual material costs of special order materials.
  • The more money you hold back, the more power you’ll possess in your dealings with the contractor.
  • If you can pay with a credit card, you’ll be afforded additional protection under the Federal Fair Credit Act if problems arise.
  • Take time to inspect all the work and do it when the contractor is not looking over your shoulder awaiting the final check.
  • Look at every detail of the project when you are comfortable and relaxed. During your inspection, use the checklist you prepared when you first solicited estimates.
  • Remember, once you hand over the check, you may never see the contractor again.
  • Make sure any defects you find are fixed before you hand over final payment. Do not sign a Completion Certificate until all work has been completed to your satisfaction.
  • If Building Permits were required for any of the work (Building, Mechanical, Plumbing, Electrical) ensure you have a copy provided to you of the Certificate of Completion or Certificate of Occupancy from the City of Cincinnati Department of Buildings and Inspections before final payment.

 

 

When do I need a Building Permit or Certificate? Does Building or Replacing a Fence require a Permit or Certificate?

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When do I need a Building Permit or Certificate?  
Almost all projects that construct new structures, enlarge existing structures, demolish all or part of existing structures, or alter the interior rooms of existing structures REQUIRES a building permit.  Changes to electrical, plumbing, or HVAC systems REQUIRES a specialized building permit. Typically, projects that would be described as ‘decorative’ in nature would not require a building permit.  Review this link for more detailed explanations.

Fence Permit & Approval Information

 

 

Does Building or Replacing a Fence require a Permit or Certificate?   
In most cases a minimum of a Zoning Certificate is all that is REQUIRED.  In limited circumstances, a Building Permit may be SUBSTITUTED for a certificate.  Review this link for specific requirements.

Do I Need A Permit

 

 

What do I need to know when hiring a contractor? Overview

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STEP ONE:  DEVELOP A LIST OF POTENTIAL CONTRACTORS

Most of us rarely hire contractors.  When you do, go beyond the advertising.  Often the best leads come from people you trust who did similar work.  Take the time to ask around.  Did a friend or family member have a good experience?  Does the similar project down the street impress you?  Did your coworker recently note a great experience with a contractor?  Did your last contractor that you trusted have a reference for projects they don't do?  Acquaintances are often the BEST references.

STEP TWO:  RESEARCH CONTRACTORS FOR RED FLAGS

Once you have made an initial list, do some background checks to eliminate anyone with red flags in their background.

STEP THREE:  INTERVIEW THREE OR MORE CONTRACTORS

After completing your research, you should have developed a list of at least three contractors.  Interview each of them addressing your goals and issues of concern, and consider asking at minimum the following:

  • Are they a registered contractor with the City of Cincinnati?
  • Do they do the type of project envisioned?  Can they provide all the services or must they use subcontractors, (such as for plumbing, electrical, HVAC, etc.)
  • Do they typically complete projects similarly sized to yours?
  • Can they provide addresses and references of past projects, particularly ones comparable to yours?
  • When do they estimate they can begin the project?  How long do they anticipate until the project is completed?
  • What part of the work will be performed by employees?  How experienced are the employees that may do the work?
  • Is any work to be performed by subcontractors?  If yes, get the subcontractor names, explanation on business relationship, and if they work for the general contractor, or directly with you.
  • Do they provide written warranties above and beyond those that may be provided by law in Ohio?

STEP FOUR:  CONVEY YOUR EXPECTATIONS FROM THEIR PROPOSAL

  • As you select finalists, and request they bid on your project, ensure that you believe they will meet the following requirements:
  • Expectation to receive a written estimate
  • Expectation that estimates will separate labor and material costs
  • Expectation that warranties will be in writing
  • Expectation that all required permits will be obtained by and issued to the appropriate licensed and registered contractors
  • The contractor(s) is financially sound
  • The contractor(s) communicates with you effectively
  • The contractor(s) demonstrate trustworthiness
  • The contractor(s) provided evidence of quality workmanship

STEP FIVE:  BE WARY OF THE LOWEST BID

Construction is not purchasing a product – it’s a purchase of a significant service with lasting consequences, and the lowest bid and getting a deal may end up having a deal for you – one of frustration, delay, and costly scope changes or worse, incomplete projects.  Consideration should be given to the phrase “Lowest AND Best Bid”.  Always be wary of pricing too good to be true.  If you require material and labor separation for your estimates and are specific to materials, you will find where the variance is, when materials should be identical/similarly priced.  “Lowest and Best Bid” considers workmanship, timeliness, and your sense that the contractor will perform as promised during your selection process and based on their fairness in their estimating and contract documents.  

STEP SIX:  REFINE YOUR FINAL SCOPE OF WORK

It’s very important that as you make final decisions to do your best to get apples-to-apples comparisons and to further detail/clarify your project before executing the contract.  Specific details to note:

  • Who creates drawings and specifications and are there additional costs for those services?
  • Estimated permits and associated costs and when payment is required
  • Define specifications or cost allowances for appliances, fixtures, and other critical components.  Consider specifically listing model names and numbers, manufacturers, etc.  

STEP SEVEN:  GET  YOUR AGREEMENT IN WRITING BEFORE YOU SAY YES

Key minimum contract points include:

  • Contract price
  • Incorporation of the scope of the work and materials
  • Payment terms and payment schedule (avoid cost-plus or unlimited/unknown cost contracts)
  • Requirements that the contractor give you lien releases from them and subcontractors at the exact same time you give them payments
  • Estimated or initial completion date
  • All oral promises or representations that were made to you before you sign the contract (and after)
  • Description of your cancellation rights
  • Requirement that any changes to the scope or price need to be agreed to in writing signed by you
  • Statement that your contractor is responsible for all permits, licensing, and registration required by law
  • Proof of insurance
  • List of all subcontractors if any are going to be used

Carefully review and consider removing before signing:

  • Attorney fees if the contractor must sue you to collect money
  • Unreasonable interest rates
  • Arbitration clauses
  • Liquidated damages (unless they are in your favor only)
  • Any waivers of warranties or rights or remedies
  • Any choice of court venue (i.e., location where lawsuit must be filed) which is far away from you
  • Anything that allows changes to be made or costs to be added without your prior written approval


STEP EIGHT: COMPLETE PRIOR TO INITIATING SUBSTANTIAL PAYMENT OR WORK

  • Proof of Contractor Registration and/or Licensing
  • Proof of Insurance
  • Estimated/Expected Completion Date
  • Approved Drawings and Plans
  • Fully Signed Contract
  • Receipt for Payment (especially a cash payment)
  • The Permit (when required) 

 

 

What are the seven things your contractor should show you before you show them the money?

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#1 CONTRACTOR REGISTRATION OR LICENSING 
Ensure the contractor is registered with the City of Cincinnati and can provide their registration number and expiration date.

Additionally, ensure plumbers, electricians, and mechanical contractors are also licensed with the Ohio Construction Industry Licensing Board (OCILB) and can provide their license number and expiration date.

#2 PROOF OF INSURANCE 
Request a copy of the contractor's Certificate of Insurance.  Thoroughly review the effective dates and follow-up with more information if the Certificate is recently issued or near expiration. 

#3 ESTIMATED / EXPECTED COMPLETION DATE  
In either the initial contract, and preferably prior to any substantial payments, a written and mutually signed Estimated Completion Date should be agreed upon.  

#4 APPROVED DRAWINGS AND PLANS  
Consider signing/initialing all drawings prior to work being initiated and prior to permit applications if needed.  Consider signing/initialing all drawings prior to work being initiated and prior to permit applications if needed.  

#5 FULLY SIGNED CONTRACT  
Require your contractor to provide a copy of the contract, and any key amendments, signed and dated by both the homeowner and contractor.  

#6 RECEIPT FOR THE PAYMENT (ESPECIALLY A CASH PAYMENT)  
Always require a dated receipt at the time of any contractor payment.  Ensure an invoice or receipt adequately describes work and materials provided, and preferably the amount paid, previous payments and balance left to be paid.  

#7 THE PERMIT (WHEN REQUIRED)  
Always be sure what building permits are required for your project. Most work, beyond simple repairs, including new buildings, additions, demolition, or changes in use (1-family to 2-family, etc.) and any systematic changes or additions to electrical, mechanical, or plumbing systems REQUIRES a building permit.  

Never pull a permit in your name, attesting that you are doing the work yourself,  when you intend to hire a on behalf of your contractor.  The entity performing the work is legally liable to perform the work in a proper and safe manner.  If you claim to do the work and it is not code compliant, you may be liable for the costs of modifications.  Registered contractors in the city have proven they have insurance, are bonded and particularly for plumbing, electrical, HVAC contractors they are state licensed. Subcontractors performing electrical, mechanical, or plumbing work should have their contracts issued in their name as well.  

Any required permits will require the contractor to be named prior to issuance and beginning of construction.  Most HVAC, Plumbing and Electrical Permits require the contractor to directly apply.

It’s advisable to withhold any substantial payments until you have received a copy of the permit and/or stamped/approved drawings.

 

 

What do I need to know when hiring a contractor? Picking the contractor

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Get estimates from at least three contractors to compare prices.  This may require researching and interviewing a greater number to get three finalists.
Ask the contractor questions such as:

  • Do they do the type of project you want to have done?
  • Have they done projects as big (or small) as yours?
  • Are they willing to provide references from the business they buy from (material suppliers)?
  • Will they show you examples of previous work and let you talk to previous customers?
  • Do they have time to get your project done when you expect it to be done?
  • Do they use subcontractors or employees? How long have they worked with them?
  • Do they offer a written warranty? (There are often automatic warranties in Ohio under the law, but sometimes written warranties are provided, too.)
  • Are they insured, do they have workers compensation coverage, and can they get a license and bond in your city?

 

 

What do I need to know when hiring a contractor? Canceling a contract

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The contractor must honor any valid notice of cancellation. Within ten business days after written receipt of notice, THE CONTRACTOR MUST:

  • Refund all payments made under the contract
  • Cancel and return any negotiable instrument executed by the consumer in connection with the contract
  • Terminate any security interest, including mechanic’s liens
  • Notify the consumer whether the contractor intends to repossess or abandon any shipped or delivered materials that are uninstalled

 

 

What do I need to know when hiring a contractor? Put it in writing

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Changes or modifications to the original home improvement work sometimes become necessary while the work is underway. If this situation should arise, a consumer should be sure to put all work and financial changes in writing. Have this document signed by both the contractor and consumer. Never rely on verbal agreements.

Avoid oral contracts! Insist on a written contract which includes:

  • contractor’s name
  • address
  • telephone number
  • license/registration number
  • complete description of all work to be done
  • start and end date
  • total price
  • any additions or changes made
  • any warranties including timelines

 

 

Is a contractor required to be licensed, bonded, and insured to work in the City of Cincinnati?

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Yes! You can verify if a contractor is licensed, bonded and insured to do work in Cincinnati by searching registered contractors online or by calling the Department of Buildings & Inspections at 513-352-3271 (opt. 9).

 

 

How can I verify if a contractor has had complaints filed against his/her company?

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You can check on contractor complaints through the following agencies:

 

 

I think the contractor I hired is not doing a good job on my project. Can the City help me?

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If you feel the contractor you hired is doing an improper or poor job, contact the Department of Buildings and Inspections at 513-352-3271 (opt. 2) and request that an inspector inspect the project.

 

 

What if the contractor failed to pull a permit for work done on my home?

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Failure to pull a permit may result in a fine (to the property owner) from the Department of Buildings & Inspections, but not all contractor work requires a permit. For additional information contact the Department of Buildings & Inspections online or contact the department at 513-352-3271 (opt. 9).

 

 

What should I know before making a final payment to a contractor?

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Following these steps can help protect your rights and investment. Make sure:

  • All work meets the standards indicated in your contract
  • You have written warranties for materials and workmanship
  • You have proof that subcontractors and suppliers have been paid. Laws may allow a mechanic's lien to be filed against your home to satisfy unpaid bills!
  • All excess material, tools and equipment have been cleared away and the site has been cleaned to your satisfaction
  • You have inspected and approved the project

 

 

What should I do if I hired a contractor who never finished the job, or I gave a contractor a down payment, but he/she never returned to do the job?

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If you have come to an impasse with your contractor, you may need to seek legal advice.  You may have rights for recourse based on federal law and/or one or more of the following Ohio laws.

  • Projects under $25,000: CONSUMER SALES PRACTICES ACT – CSPA – O.R.C. 1345.01-1345.13 online
  • Projects over $25,000 - THE HOME CONSTRUCTION SERVICE SUPPLIERS ACT – HCSSA – O.R.C. 4722 online
  • THE HOME SOLICITATION SALES ACT – HSSA – O.R.C. 1345.21-1345.28 online

 

 

Can the City of Cincinnati staff serve as my attorney?

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No employee of the City of Cincinnati or its Law Department can act as your private attorney.

If you need legal advice, seek counsel from either a private attorney, the Legal Aid Society of Greater Cincinnati, or other organizations. Contact or visit the Cincinnati Bar Association to learn how to find a lawyer and to see if you qualify for a free attorney or other legal aid.

 

 

What is small claims court?

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Small Claims Court is part of the court system which allows an inexpensive, informal way to resolve a dispute with an individual or a business. An attorney is not required, but you may use one if you prefer. For additional information you may contact the Hamilton County Clerk of Courts at (513) 946-5721 or search online.

 

 

What is the maximum amount of a small claims suit?

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The maximum amount of damages which can be requested in Small Claims Court is $6,000. There is a minimum $49.00 filing fee that must be paid at the time of filing, and additional charges per defendant if you are suing more than one person.

 

 

How do I file a small claims suit against a business or company?

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Small Claims suits are filed at the Clerk of Court’s office at the Hamilton County Courthouse, 1000 Main Street, Cincinnati, OH 45202.  To file, you must supply the name(s) and address of the person(s) you wish to sue and any information you have regarding your claim.  When filing against a business you must have the first and last name of the owner unless the business is a corporation. If you are suing a corporation, the correct corporation's name should be on the complaint. You can contact the Ohio Secretary of State (Toll Free: 877-767-6446) or search online to obtain the corporation’s name, and the name and address of its statutory agent. The statutory agent is appointed by the corporation to accept legal papers.

 

 

Sources:

  1. Myers Law, LLC. Protecting Ohio Consumers.
  2. City of Cleveland, Office of Fair Housing & Consumer Affairs. When Hiring a Contractor for Home Improvement or Repair.