10 Things Contractors Won't Tell You

When you hire a general contractor to come build an addition onto your house, you probably assume you’re getting someone who has spent years learning his craft, giving him the proper credentials to saw a hole in the side of your den. In reality you could be getting a madman with a toolbox who answers to no one. That’s because only 27 states have any state-licensing requirements—and where regulations do exist, they vary. In California, one of the stricter states, aspiring contractors must have four years’ experience, prove their financial solvency, and pass a written exam to become licensed, whereas in South Carolina, they need only two years’ experience along with an exam and submission of financials. Maybe the disparity helps in part to explain why the Better Business Bureau received 1.1 million inquiries in 2006 from people seeking “reliability reports” on specific contractors—to ensure they were trustworthy enough to hire—ranking them third among industries for that request, according to the Council of BBBs.

So how should you shop for a contractor? Ask for and check references, of course. One good resource is Handyman Online (www.handymanonline.com), a referral service that can connect you with contractors in your area who are legitimately licensed, carry liability insurance, and have at least three references. And Tom Pendleton, owner of McLean, Va.–based consulting firm The House Inspector, offers this advice: “Close to 95 percent of home-improvement contractors go out of business or change their name within three years” due to consumer complaints or mismanagement, he says, “so you want a contractor who’s been in business under the same name for more than three years.”