Legitimate Contractor
The name of a legitimate contractor given to you by a friend who tells you the home renovation this contractor completed a year earlier was superb. Competence and legitimacy pass to you in the conversation. Even the credibility of who referred the contractor, perhaps subconsciously, also is considered.
Whatever the source of the contractor's name, you must always check for the legitimate contractor. As you know, the fate or any business relies on profit. The larger and more diversified a business the more able the business can sustain a loss. A small contractor is more vulnerable to a loss so their financial health rides on each project. Your friend may not know the current financial health of the contractor and you do not want one who has financial or legal problems.
The first step to managing your construction risk is to ensure the contractors are legitimate before you invite them to bid:
• Ensure the contractor is listed with Pennsylvania Contractor Registration Site(new June 2009) called People Protecting People.
• Research the corporate name with the Pennsylvania Department of State.
• Receive a Dunn & Bradstreet report.
How to Check for a
Legitimate Contractor
The first step to managing your construction risk is to ensure the contractors are legitimate before you invite them to bid:
• Ensure the contractor is listed with Pennsylvania Contractor Registration Site(new June 2009) called People Protecting People.
• Research the corporate name with the Pennsylvania Department of State.
• Receive a Dunn & Bradstreet report.
Compare To Industrial Construction
Industrial construction process requires the contractors provide the customer three different bonds: bid bond to insure the proposal has all the items included for the price quoted, performance bond to assure all the work is completed, and the maintenance bond to guarantee the workmanship. The companies issuing the bonds research the contractor for every project and allow the bonds only if the contractor is proven reliable.
Please remember this tool for construction risk management eliminates the counterfeit contractor for the Industrial customer - not you, the homeowner.
Since this bonding method is NOT "Usual and Customary" to homeowners in Pennsylvania, contractors in Pennsylvania in the past were able to declare bankruptcy one day and then reappear under a different name the next day. Home builders and developers are able to do this legitimately because they set up each site as a corporation. When all the homes sell, they dissolve the legal entity and move to the next site. If there is a latent defect, you will not have legal recourse unless they are a public company.
The definition of a legitimate contractor is very difficult to describe. The best way for me to help you is to show you how to prevent bad things from happening when you hire a contractor.
Have you had a defect that appeared years after construction was completed? You can help others with this concept if you would let us know your experience. Pictures would be extremely helpful!
