My Buddy, My Friend: The Contractor from Hell (Part 5)

Once the repairs were complete, thinking the worst was behind us, Ms. Lowball and I continued down our merry paths.

Until…

Ms. Lowball got another phone call from one of our tenants. The tenant was questioning when the new shower head, lock and toilet seat that they paid said contractor $250 for would be installed.

Ms. Lowball was less than happy to hear this as she had already paid said contractor to complete those items, only to find out that these had not be done either!

WTF?????

Mr. Contractor had collected double payments on a job he never finished.

That was it for Ms. Lowball. She filed a complaint….well, several complaints. This extracurricular activity took up many, many hours of her day – making her disposition even more sour than usual. She even wanted to put him on blast on social media….but she didn’t. She is a professional…most days.

However, the moral of the story (of this series) is to always vet your contractors, stick within the model given to you by your real estate mentors, check referrals and don’t pay for a bunch of work up front. Contractors should have contracts in place that help protect you, protect them and protect their subs. If they don’t have all three of these elements, run away….as fast as you can.

But just don’t take our words for it. Check out this awesome advice from Bob Jackson, who managed a contracor's office for many years, because Bob says it best:

A few thoughts on hiring contractors/workmen: If the estimated cost of the job is more than you are willing to lose, only do business with a licensed, bonded, insured person/company. People will give you all minds of reasonable or sad stories as to why they don't have the above, learn to smile and say "sorry, I can't risk my money" because that is exactly what you are doing.

Contracts are everything. In the age of the internet, contracts for various levels of work are not hard to find and if you are spending $5,000 +, it is advisable to do consider the few hundred dollars it would cost to have one drawn up by an attorney, which you can then use as a "boiler-plate" for future jobs.

Contracts should contain the following provisions:

Payment schedules. These lay out how much of the total contract amount will be paid and when as the job progresses. I also recommend that you only hire contractors that can buy their own materials, put them on the jobsite, THEN be reimbursed. I know this leaves out aunt Sally's nice neighbor boy, but most contractor rip offs begin with paying for materials that are never purchased.

Make sure all changes in work scope and materials be subject to written approval or "change orders."
If appropriate, have "LD's" or liquidated damages built in to the contract. This means of work progress falls behind a certain mark, not due to circumstances out of the contractor's control, the dollar damages are deducted from the final contract amount.

People tend to want to do this kind of business on a handshake, mostly because we want to believe in the honesty and good nature of most people. Don't do it. You can give people favorable deals, etc, but it should always be subject to the above.

The moral of the story? Be a wise ass, not just a smart one.

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About Unknown

Ms. Lowball is the editor in cheif for the smartass. This website is run and administered by her company, Valkeryie Consulting.