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May 26, 2005

Protect yourself from scam or unqualified contractors

Tumwater — Upfront work by a homeowner can help protect against a contractor who takes your money and runs, or does a poor job and won’t come back to fix the problem.

“It takes a fair amount of work to find a good contractor, but it’s easier than trying to recover from a bad one,” said Pete Schmidt, who is in charge of contractor registration for the state Department of Labor & Industries.

Schmidt steers homeowners to L&I’s highly popular online contractor database, which was visited by nearly 350,000 users last year. At Contractors.LNI.wa.gov, you can find out whether your contractor is registered with L&I, and whether that contractor has any current claims against his or her bond.

Contractors are required to:

  • Register with the state.
  • Carry a minimum of $250,000 of liability insurance.
  • Obtain a $6,000-$12,000 bond (depending on the type of contractor) that a customer or supplier can use to make a claim against a contractor who didn’t finish a promised job, did the job improperly, or didn’t fully pay for supplies or labor.

Contractors.LNI.wa.gov will help a homeowner find out whether their contractor meets these requirements.

Checklist for hiring a good contractor

Checking out your contractor on the L&I web site doesn’t guarantee that he or she is a good one, or that they are qualified to handle your particular job, but it’s one of several steps you can take to protect yourself against unscrupulous or unqualified contractors:

  1. Interview several qualified contractors and solicit written bids. Bids that are significantly lower than all others should be questioned.
  2. Verify that the contractor is properly registered. Ask them to show identification and their L&I contractor-registration card. Then verify the contractor’s registration status at Contractors.LNI.wa.gov or by calling L&I’s toll-free contractor-registration line (1-800-647-0982) or by calling your local L&I service center, listed in the state government section of the telephone book.
  3. Review all aspects of the bid, not just the price. Materials, time frames, cleanup practices, required deposits and references are also are important.
  4. Ask for references on similar projects and go look at the finished product. Also, visit a project in progress to see how the contractor operates — is the site clean, do they communicate with the homeowner and follow-up in writing with changes? References should also include suppliers of products and subcontractors.
  5. Be wary of contractors who ask you to buy the building permit. Property owners can purchase a permit for work they personally do on their own property, but only a registered contractor can buy a permit for work on someone else’s property. Also, make sure that all inspections required under the permit are conducted.
  6. Be wary of a contractor who asks for a large deposit or the entire cost upfront. Ten to 15 percent of the bid price is normally sufficient. Before work begins, ask the contractor for the required disclosure statement, called “NOTICE TO CUSTOMERS,” if your project is valued at more than $1,000. This statement provides you with information about your rights and responsibilities.
  7. Withhold 15-20 percent of the project cost until you are fully satisfied with the finished product.
  8. Try to anticipate problems and inconveniences such as cost overruns or cleanup, and make sure a written agreement is in place before the work is begun.
  9. Protect yourself against liens on your property for a contractor’s unpaid bills. You can make your check payable to both the contractor and the material supply house, pay for the materials yourself, or require a lien release at the time of delivery. You may also want to consider a “performance bond” for any project over $12,000.
  10. Put all change orders in writing and include the additional cost. Ask questions as work progresses. If you don’t like an answer or don't understand it, stop the work until you do.

What if the job goes bad?

To recover damages from a contractor, you must file a claim in the county superior court where the job was done. A description of the process can be found on the L&I web site at http://www.LNI.wa.gov/IPUB/625-088-000.pdf or by calling 360-902-5753.

To report an unregistered contractor, call the toll-free fraud hotline at 1-888-811-5974 or visit www.LNI.wa.gov/TradesLicensing/Contractors/ContractorFraud.


For media information: Ron Langley, L&I Public Affairs, 360-902-5405 or lanx235@LNI.wa.gov.

Radio broadcast version (:30)
If you’re looking for a good contractor to build or remodel your home, here’s a great web site to help get you started: “Contractors.LNI.wa.gov.”

On the site, the state Department of Labor & Industries has a checklist to follow when hiring a contractor, plus an online feature that let’s you check whether someone else is trying to collect against the contractor’s state-required bond.

Go to the Department of Labor & Industries’ web site at “Contractors.LNI.wa.gov” for the checklist and to look up the contractor you want to hire.

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