What homeowners should know before hiring a contractor

When you invite a contractor into your home to repair or enhance it, you are taking a leap of faith. You are expecting that the person knows what he or she is doing and will fix your problem, not make it worse.

There are ways that a consumer can lessen the risk and take some of the guesswork out of these kinds of interactions. They just have to educate themselves on terminology and their legal rights and know what to request.

For instance, before you let anyone in to work on your home, you should ask them to produce their Certificate of Insurance, said Robert Melko, president of Bishop Plumbing in Des Plaines. Once you see that they have one, a homeowner also has the right to ask to be added to the contractor’s policy as an “additional insured.”

“Ninety-five percent of customers have no idea that they can do this and should,” Melko said. “Once they are added, the contractor’s insurance covers the customer in case a worker is hurt on their property. If they have not done this and a worker is hurt, their homeowners insurance would be responsible.”

Most well-established companies do not charge a customer extra to add them to their policy for the duration of the job, he said. But some may charge a nominal fee.

It also isn’t a bad idea to call the insurance company whose certificate the contractor produces and double check the coverage, according to Melko.

Another thing you will want to see if you hire a general contractor who, in turn, hires subcontractors to do the plumbing and other work, Melko said, is a waiver of liens from all of the subcontractors. This proves that the subcontractors have been paid by the general contractor. You don’t want a subcontractor to end up putting a lien on your property, which they have every right to do if they are not paid.

Something else most homeowners don’t know is that if you hire someone without a plumber’s license to do plumbing or someone without a roofing license to do roofing, your homeowner’s insurance has the right to walk away and not cover any problem that arises.

And in today’s economy when so many people are out of work and doing side jobs for their friends, neighbors and relatives, Melko added another cautionary note. Out-of-work plumbers and other contractors may have a license, but most won’t have any insurance. So if anything bad happens, the homeowner is on their own. In addition, if you go to a store and buy a hot water heater, for instance, and install it yourself, many manufacturers void their warranty and once again, insurance companies can choose not to cover mishaps.

Licenses are another sticky subject. Unknown to many, the state of Illinois licenses very few tradespeople. Only plumbers and roofing contractors have their knowledge tested by the state and are issued Illinois licenses. In addition, fire alarm contractors are tested nationally and certified by the National Institute for Certification in Engineering Technologies (NICET), according to Chuck Kobus, deputy building department director for Arlington Heights.

Testing and licensing of electricians is not done by the state. Instead it is handled by a handful of municipalities scattered throughout the state that administer a test and issue licenses which other municipalities agree to honor. And over the years, the list of testing municipalities has continuously shrunk. In fact, Des Plaines, Naperville and Waukegan are among those that have recently discontinued or temporarily suspended their programs.

“We license electricians in Libertyville because we are looking out for the best interests of our residents,” explained Michelle Cox, building department secretary and permit clerk for Libertyville. “We want to make sure they know what they are doing.”

In addition to scoring at least 70 percent on the test, which is based on national electric codes and approved by Libertyville’s electrical commission, electricians seeking a license from Libertyville must provide proof of a minimum of 8,000 hours of documented experience in the field.

Other communities in the Chicago area that still test and license electricians are Chicago, Elgin, Schaumburg, Streamwood, Buffalo Grove, Downers Grove, Woodstock, Lansing, Deerfield and Orland Park, according to Anita Lichterman, chairwoman of the Association of Building Coordinators of Illinois. When an electrician or electrical contractor registers to work in a given community, they must provide their current license, issued by one of these communities, in order to work legally.

Some communities also test and license the mechanical contractors involved in heating/ventilation/air conditioning (HVAC) work. But most municipalities do not require proof of such a license. In this area only Aurora, Elgin, Joliet and Evanston require this of the people who work on furnaces and air conditioners. The only uniform requirement for this trade is that they be certified in the handling of Freon by the Environmental Protection Agency (EPA), Lichterman said.

Even fewer communities — Chicago and Evanston — require general contractors to take a test on general building questions and their knowledge of local building codes, according to Dave Brady, president of the Remodelers and Custom Builders Council of the Home Builders Association of Greater Chicago and owner of Oak Design and Construction based in Oak Park.

“In most cases, when a contractor shows you his license, it is just a business license which means he has paid a fee and has the right to do business in your community,” Brady explained. “Under the current system, it is difficult to know who knows what.”

Carpenters, insulation contractors, window installers and other trades are not tested or formally licensed by anyone in Illinois.

One new certificate is required of all contractors working in homes built before 1978. The federal government requires all such tradespeople to become certified renovators and to take required steps to contain lead contamination. Painters, window installers, plumbers and any contractors that are disturbing more than 5 square feet of wall space in such a home must be able to show their certification, Brady cautioned.

The last area of concern is bonding, but according to Mike Show, general manager of Insignia Kitchen and Baths in Barrington, the surety bond that most municipalities demand primarily protects the municipality against damage to roads, sidewalks and other public property in the event they are damaged by a contractor. For instance, Arlington Heights requires demolition contractors provide a $20,000 bond with the village named as the beneficiary. Sewer contractors there must provide a similar bond for $10,000. These protect the village, not the homeowner, Show explained.

But such a bond does also allow the municipality to remediate any problems with work that show up during an inspection if the tradesperson walks off the job, added Brady.

So-called “completion bonds,” which are issued by insurance companies to ensure that the work is completed by the contractor, are seldom seen in residential jobs, he said.

“Quite honestly,” Brady said, “a company’s reputation is the homeowner’s best surety bond.”