Of all the steps in the ADU process, your decision about a contractor can have the biggest impact on the success of your ADU project. The first step in contractor consideration is making the decision about whether you need a contractor.
Do I Need A Contractor?
There are several factors you must take into account to make this decision. Do you possess both the construction skills and project management skills that the scope of your ADU project requires. If you have the necessary skills, then you must determine if you have the time, energy and willingness to do the project. Honestly assess whether you will be happy with the 'quality' of work your construction skills would provide. If you have any doubts in these areas, you may be wise to look into hiring a contractor.
The Remainder of this section addresses
- Selecting a Contractor
- Managing the Construction Process
- Construction Contract
Selecting A Contractor
Where Do I Find Potential Contractors?
You can find contractors in the yellow pages of your telephone book, by contacting agencies who know or work with contractors, or by word of mouth.
Check the yellow pages under 'Building Contractors' or under 'Contractors'. You will find a variety of listings for both general and remodeling contractors. You will also find a couple of other advertisements offering free consumer tips or referrals. A couple of these are listed below:
- Contractor Referrals
This service is created by a for-profit corporation called 'Service Magic,' and headquartered in Golden Colorado. They have a local telephone listing, so you do not have to call Colorado for information. This service is free. You will not be charged for referrals. Contractors sign up with the agency so they can be referred to people looking for contractors. The service indicates that they carefully screen contractors who want to sign up with them, to make sure they are properly licensed and bonded for the area(s) they will be working in. They say they also check for such things as whether the contractor has any liens against them and whether they have filed for bankruptcy in the recent past. Their intent is to make sure that all contractors who are referred are reliable. If you want to look into this service, the local phone number for this service is (425) 644-5059.
- Q and A, Information Guide and Consumer Tips
Look in your U.S. West Dex telephone book. You will need to go to the 'Contractors' section of your yellow pages to see the advertisements. This service is free of charge and easy to use. Just call (206) 442-2880. You will notice in the advertisement in your phone book that there is a four-digit code for each contractor-related topic. The audio recording will prompt you when to enter the code. After listening to the recorded message, either hang up or enter another code.
Master Builders Association of King and Snohomish Counties
Provides a free telephone contractor referral service called 'Remodelors* Referral Service', at (206) 622-7766. When you call, you can expect the business names of two (2) contractors, referred to you based on the geographic location (address) of your project. Each contractor signed up with the referral service must have been in business for at least 5 years, and must have been a member of the Master Builders Association for at least 1 year before they can be included in the service. You may also get information about other contractors at their Website www.mba-ks.com
Word of Mouth
Still one of the most common ways to find a contractor is through friends, relatives and other persons who have had experience with contractors and can recommend them to you. You might also ask your local building inspector if he/she can let you know of any contractors they are aware of who have general residential or ADU experience, but keep in mind that your city building officials are not in the business of recommending a 'specific contractor' or otherwise giving 'preference' to any contractor.
What Questions Should I Ask Potential Contractors?
As you look for a contractor, you are looking for a candidate that has the credentials, previous experience, skills and management capabilities to do your ADU project in the way that you expect. You want the contractor to be able to work with you throughout the duration of the job, get it done on time and on budget, and not have any unresolved problems at the end. Below, you will find questions to help you assess the credentials, experience, and skills and management abilities of potential contractors.
1. Contractor Credentials
- Are you Licensed and Bonded? Contractors must be licensed by the Washington State Department of Labor and Industries. Contractors must also have a liability bond (cash or insurance policy) of at least $6,000 for a general contractor and $4,000 for a specialty contractor.
- Do you have general liability insurance for your business? the State of Washington requires contractors to carry a minimum of $120,000 liability insurance, per occurrence.
- Have you had any Prior Claims, liens, or lawsuits against your current business, or any previous contractor business you have owned? This would be a historical record of claims, liens or lawsuits made by others against the contractor.
- Have you ever had your license suspended or revoked? You may want to know if the circumstances of their suspension or revocation might have any bearing on your project. If this has occurred, you may want to know how long the penalty was in effect.
2. Contractor Experience
- Do you have a portfolio of residential projects you have completed? You should plan to obtain two or three referrals off of this list. You can then go visit those projects.
- Does your portfolio include any ADU projects? This is not necessarily critical. You want to make sure you have a contractor with experience in 'residential' projects. It is a bonus if the contractor has completed ADU projects, and even more of a bonus if any of the completed ADU projects were in your city. Again, obtain referrals and then visit the projects.
- Were your past jobs completed on time and on budget? If the contractor has too many projects going at the same time, the contractor's employees or subcontractors may be pulled off of your job at times to work on other projects. This could delay your project completion. Also, if the contractor does not tend to use the same construction and supply team, there may be delays in getting subcontractors scheduled, problems in getting reasonable subcontractor bids, or in getting materials supplied and/or delivered. In either case, delays affect your overall time of completion and could affect your budget.
- Are you familiar with the rules and regulations for ADUs in my City? Again, this is not necessarily critical, but it can save both time and money if the contractor is already familiar with the requirements for your project and does not have to spend much time researching them.
3. Contractor Skills and Management Capabilities
- Can you design my ADU or will I need to hire an architect?
- Will work from other jobs you have going interrupt the work on my project? If the contractor is busy with a number of jobs going at the same time, it could affect whether your project will be completed on schedule or delayed, while workers are repeatedly pulled off the job to work on other projects.
- What subcontractors will work with you on the project, and are they your 'regular' team of subcontractors? Most contractors have a team of regular subcontractors who they like to work with, and can count on to give them reasonable bids and to be available when they need them on a job. If the contractor does not have such a team, they must call around for bids and availability. Often, this translates into higher subcontractor bids and uncertain availability.
- How long have you employed your businesses' employees who will work on my job? Generally speaking, employees who have been with a business for years would tend to reflect a stable business that employees are happy with and stay with. There may or may not be business issues with a company who has high turnover or otherwise trouble keeping employees.
Please Note: Contractor questions assistance provided by Construction Dispute Resolution Inc.
What To Ask The Contractor's Referrals
The following set of questions are provided for you to get a feel for what past clients liked and did not like about the contractor(s) you are considering, as well as to give you an indication about what it might be like to work with them if you select them. Keep in mind, though, that the answers you get to these questions will be somewhat subjective.
How were you introduced to the contractor that worked on your project?
You want to find out if the contractor was referred to them based on a recommendation from another party, or if they just found them in the telephone book.
What were the best things about working with the contractor?
This would be a question to see if the contractor made them feel like he/she was working together with them on the project, and if there were any areas where the cooperative effort was especially good.
Did the project progress along the contracted schedule and budget?
(if not, what varied most---costs or schedule?) Depending on the answers you get, you might want to follow up on this matter, with the contractor, to see what steps you could take to prevent these issues from occurring on your project.
How well did the company respond to your requests for project changes?
Were they responsive to your needs? If you get a more negative response here, follow up with the contractor about how requests changes in your project will be handled, and make sure you are comfortable that the process or methods proposed to you are fair and reasonable.
What two things would you change about the way the contractor does business?
The best response would be if the previous client had no response on this item. You are looking to see if they had any negative comments about the contractors performance for them.
Would you use the contractor again on another project?
If the previous client would not use the contractor again, you will want to follow up and find out what their reasoning is.
Would they recommend the contractor on a project the size of your ADU project?
You want to see if the size of the project has anything to do with how the contractor approaches the work project. In particular, if the previous client thought the contractor may have perceived the ADU job as too small to bother with.
Verify The Credentials Of Contractors
Washington State Department of Labor and Industries
1-(800) 647-0982 for confirmation of license, bond and general liability insurance. You will also be able to find out if the contractor has had any prior claims against their bond. By getting the principals name(s), you can cross reference for information about their previously owned contractor business(es) as well. You may also get on-line at www.lni.wa.gov/contractors/contractor.asp
Better Business Bureau
Call (206) 431-2222 to see if any complaints about the contractor business have been made.
Washington State Attorney Generals' Office
1-(800) 551-4636 to find out if any lawsuits have been filed against the contractor business by Washington State. You can also get online at http://www.atg.wa.gov/
Contractors Insurance Company
You can get the phone number from the contractors insurance policy or policy certificate. You can call them to see if any property damage or other liability claims have been filed against the contractor.
Managing The Construction Process
If you're thinking about managing the project yourself, there are three basic stages of your ADU project that are listed below. For more detail on each stage, go to the pages listed by each stage.
Pre-Construction/Permitting (see ‘Basic Steps’, sections 1-8, Note: for more detail preparing a construction contract, see ‘construction contract’ below.)
Construction Management (see ‘Basic Steps’, section 9)
After-Construction (see ‘Basic Steps’, sections 10-12)
If you hire a contractor, IT IS ABSOLUTELY ESSENTIAL FOR YOU TO HAVE A WRITTEN CONTRACT. There is no substitute for a well designed and written contract.
- You could write it yourself.
This is generally a poor approach unless you are an attorney. However, if you decide to undertake this task, you could use a 'form' contract, such as from the American Institute of Architects www.aiaseattle.org/ You will find a variety of types of standard forms for you to choose from, depending on the type of contractor services you want for your project. These will be of the 'boiler-plate' form that will have some very good provisions. However, as a boiler-plate form, none of these forms are designed to specifically cover the particulars of your project. Typically, this kind of form would need to be modified, in at least some places, to fit your needs. You can also get forms from you local office supply store.
- The contractor will prepare a contract for you.
The contractor will typically use their standard contract form. You should expect the content of the contractors form to be 'slanted' to favor the contractor in most respects. You may want to consider having it reviewed by your legal advisor before you sign.
- Use an attorney to prepare a contract.
An attorney can prepare a contract that is specifically tailored to the details of your project.
- Parties To The Contract:
Both you and the contractor should be named in the contract document
- Amount of the contract:
Write in the total amount of the contract. This would be from the written bid from your contractor. Make sure the written bid includes the contractor's business name and address on it. Make sure the bid includes sales and other taxes that apply. If the bid does not include permits or other costs, you will need to find out what they are and add them into the amount of the contract.
- Plans and specifications:
This should refer to the final plan and the construction and materials specifications that will be used. Normally, the bid you get from your builder will not include this, so you will need to talk to the contractor about it. You and the contractor should agree on the standards for quality of work that you can expect. Examples of this might be: "Residential Construction Performance Guidelines for Builders and Remodelers" (first edition), or the "Residential Construction Performance Guidelines Second Edition of Contractor and Homeowner Version." You can view these documents on-line at www.builderbooks.com. Click on the search button in the banner and type in one of the two book names listed above. For related information you can also call the National Association of Homebuilders, at 1-(800) 368-5242, or visit them on-line at www.nahb.com. Also include in this section whether you will be selecting any of the materials, either on your own or through a budget given you by the contractor.
- Duties of parties:
Some people want to handle the bill paying function in order to free up the contractor to concentrate on construction. If your contractor agrees with this, it should be written into this section of the contract. Make sure you include in this section that the contractor is licensed and bonded by the state, and that he has the property and liability insurance levels to protect you against litigation.
- Getting permits:
Decide who will get the permits and who will arrange for inspections.
- Change orders or changes to the contract:
Write in that all changes will be through a written change order signed by both you and the contractor. (Note: be sure you check with your city and lender to see if any proposed change order will require approval by the city or lender, before you execute the change order. For example, if you propose to change the size and location of a bedroom window, the new size and location would need to be reviewed first by the city to determine if it met proper codes for height from the floor and openable area, to allow emergency escape in case of fire.)
- Start date and end date:
This would include both the first day of construction and the date on which construction will be completed. You may also wish to consider some sort of penalty clause here if construction is not completed by the completion date. Penalties may provide you with a means of relief against delays in your project.
- Acceptance of work:
This is where the quality of work specifications mentioned above (in the plans and specifications section) may help establish the quality of work you are expecting. You may also want to consider having disputes about acceptance of work handled through a dispute resolution provision (see below).
- Dispute resolution:
This is an optional provision for the construction contract. This means you do not have to include it in your contract. Unfortunately, though, disputes can and do occur over the course of construction projects. As an alternative to going to court over a dispute, some people favor the use of a mutually agreed upon contract mediator/arbitrator to settle disputes. There are a number of attorney and non-attorney persons or firms who can provide this service for you. If you are interested in this type of provision, please note the following:
- Potential attorney references:
There are a number of attorneys and law firms known to have experience in writing or reviewing construction contracts, as well as in the general area of construction law. Some of these may also have mediator/arbitrator experience and may be able to help you in contract dispute resolution. Look in the yellow pages of your telephone book under 'Attorneys'. You will find that attorney listings are first sorted alphabetically, then sorted by 'Fields of Practice'. Under the fields of practice listings, look for 'Construction Law'. This will give you a list to start with. If you are looking just for contract dispute resolution, ask the attorney you call for attorney references for this service.
- Potential non-attorney references:
There are also a number of individuals and firms who provide non-attorney dispute resolution. If you want a non-attorney referral for this service, ask the attorney you call if they know of such individuals or firms. You can find at least one of these in your yellow pages under 'Contractor Referral Services'.
- Potential attorney references:
- Liens releases and other guarantees or warranties:
Make sure you have a section of the contract that requires the contractor to supply you with a lien release as well as lien releases for all subcontractors and material suppliers for the project. The lien releases are your guarantee that subcontractors and material supplies have been paid in full and won't file any liens on your property at a later date. You will also want to get warranties for any products used on your project and a guarantee of workmanship from you contractor.
- Contract close-out provisions:
You will want to negotiate some amount of retention in the contract. Consider withholding 10% of the overall budget until after the contractor has completed the punch list of corrections issued by city inspectors, any work you may have outstanding through one or more disputes (especially if you are using a dispute arbitrator), and until you receive all your lien releases, guarantees and warranties, and receive your final approval from the city. You may wish to have other close out provisions as well, but the idea is to establish an amount of retention you will hold back from the contractor until the final details have been completed. After close out is completed, you would give the retention amount to the contractor.