4 Common Mistakes To Avoid When Hiring a Commercial Contractor

[dt_highlight color=”” text_color=”” bg_color=””]Updated 9 May 2020, 2 Bonus Tips Added.[/dt_highlight]

A commercial contractor can make or break a construction project. You have to be very careful in selecting a commercial contractor and the selection process must be logical and based on hard facts. Trust your gut feeling and go on probing the facts available to you and avoid the common mistakes others do when hiring a commercial contractor.

While you are in the process of selecting your commercial contractor, you have to be careful and must not take a hasty decision and repent later. Do your homework and get as much information as possible and verify each of them carefully. Rely on the vital facts that will show the real character of the person you are considering. Apart from his professional qualifications and industrial certifications and insurances you have to see the character of the man standing behind all these to find the best commercial contractor for your construction project.

The true character of the person is the most important trait in the person you want to appoint as your commercial contractor and you must try to find it out for the successful selection of your commercial contractor.

Homeowner and contractor relationship is based on human values so place more reliance on the facts that show what type of person he is rather than relying solely on the papers he is producing to you. Trust and mutual respect with professionalism in approach are the real watchwords and you need to find a person to be your commercial contractor and in the process, you should not commit the following mistakes while hiring a commercial contractor:

Mistake No.1: Selection Based On the Pricing Alone:

This is the most attractive yet deceptive mistake!

This is the most common one and when you are hiring a commercial contractor, you get quotes from many persons and will be comparing each one with others and the natural tendency will be to select the one that has come with the lowest price tag. This is due to the reason that you want to keep the project cost low and this is not the best place to decide solely on the price alone.

You will be aware that most of the time the cheapest will never be the best things and the best things come with their price tag. So, do not go with the one that has quoted the lowest price as he may not be the best person to trust. He may be a person who is not sure of the real requirements of the project or maybe a person who wants to complete the project as he wants without taking into account what you want from the project.

This gap in approach may lead to fatal disputes later on completely jeopardizing the outcome of the project. So, avoid committing the mistake of selecting your commercial contractor based on their lowest price alone.

Mistake No. 2: Failure To Consider The References:

Never Forget, reference is the only evidence!

It is routine to ask for references from their past homeowners- customers with whom they have worked. The intention behind this is to see how they have conducted themselves during the past projects and how they have treated their past customers. This will show how desirable is the person to become your commercial contractor.

Once you have asked for references and the same has been given by the person then you have to contact them and enquire with as many persons as possible and get the answers you want to get from them. To know about the real person ask some of these questions and carefully consider the responses before making your final decision:

1. Were the past owners happy with the contractor with the way dealt with them?
2. Were they happy to have selected him as their commercial contractor at the end of the project?
3. Did he complete the project on time as agreed?
4. Were they happy with the quality of the work he did?
5. Did he communicate well with them during the project execution?
6. Was he available to you when you want to discuss something with him?
7. Did he kept his promises and gave sufficient importance to the terms of the contract?
8. Was he willing to make corrections and changes when they were requested?
9. Will they hire him again?
10. Did he complete the project on- budget?

The answers to these questions are very vital to consider him as a probable person to select as your commercial contractor.

Also with the social media coming to your aid, search for his business on social media and find out what their past customers have said about the contractor and if so how many positive reviews he has received for his business. Pay special attention to the critical or negative reviews and consider them carefully.

See if they are real and true and in their light decide how the facts given in these negative reviews will affect your contract if the contractor commits those things during the project execution phase after you had selected him as your commercial contractor.

Also, have interactions with those persons with whom the person you are considering has business transactions and find out how good he is in finance management, and people management which is very vital for the success fo the project. You can talk with people like design showrooms, owners of tile shops, home improvement centers, and so on.

This will help you find the human nature of the person with whom you want to enter into dealings as your commercial contractor.

Mistake No. 3: Not Checking On the Documents Properly:

Cause, documents cause no arguments!

As a contractor, he needs to submit his basic documents like a contractor’s license, the insurance papers so that you can find out his status and legal permissions to act as your commercial contractor. He must be fully insured to comply with all current laws and regulations and must be able to show enough proof for the same.

Above all, he must have insurance coverage under the Workmen’s compensation for taking the liability for the injuries or death that occurs on your worksite. Apart from this, he must have general liability insurance for a sufficient amount so that you are free of any liability occurring during his tenure as your commercial contractor.

Likewise, you must also check his professional association affiliations so that you can easily find out his professional acumen which is one of the most important characters for selecting a person as your commercial contractor.

Apart from this check if he is having a well-marked physical office or he is operating out of his residence with a PO Box for his letter correspondence.

Mistake No. 4: Working Without A Written Agreement:

Never let verbal agreements cause physical disagreements:

Once you have hired a commercial contractor, you must enter into a written contract with him. This is the basic document that will have everything you need to hold him responsible for the completion of the project.

A well-written contract with clearly defined terms and conditions will speak for you in case of court proceedings later on. So, you must insist on entering into a written agreement with him giving out all the details of the project, and defining the rights and obligations of each of the parties to the agreement.

If you are not entering into a written contract with the commercial contractor you will not be able to prove the full scope of the project and you cannot make him do the project as you want.

This is a grave mistake to be committed by a homeowner and most of the times the contractor will take advantage of this vital lapse on your part and will complete the project to his liking and you will not have any recourse to correct him or direct him to complete the project as you want.

So, always insist on entering into a well-written contract and sign it after reading and understanding each and everything contained in it knowing the real meaning of the content of the contract and the way they will have an impact on the outcome of your project.

Thus, selecting your commercial contractor is a lengthy process that calls for the collection and consideration of various documents and facts. So, Pay more attention to the human part of the transaction and take steps to find out the nature of the human being rather than paying more attention to his professional qualifications.

Mistake No. 5: Unawareness Of Unexpected Costs

In Commercial Construction, Awareness Is Better Than Carelessness:

Before the project work starts, have a clear understanding of the cost estimates given by the commercial contractor, this is because the estimates are just anticipated expenses that a contractor considers based on his past project experiences. No contractor will give an unfair estimate but no two projects of a similar objective are the same, there could be costs that were never in the contractor’s vision for the project. So, you must never expect that the estimated cost for the project will be the final cost.

Instead, request the contractor to give the maximum possible cost for your project. This maximum cost could include cost for any possible work which was not included in the initial project plan. For example- during the project work it is discovered that the previously built foundation is not durable enough and rework is required, such an unexpected event can reduce the long term maintenance cost after the project is completed.

So, never assume that the estimated cost is the only cost that you will have to bear, always keep extra funds to make the unavoidable and unexpected project costs.

Mistake No. 6: No Advance & Cash Payments

As Cash Payments Don’t Qualify For Statements!

When the contractor is insisting on advance payment for the project, this act signals danger. This showcases unprofessionalism because, in this industry, the client has to initially pay a small deposit amount before the project starts which then followed by payments in installments at pre-decided stages of the project.

Before the project starts, if the contractor is telling you to pay the initial deposit or any of the future installments in cash, you must not hire that contractor. All the professional & experienced contractors will accept their payments in either debit card, credit card, or through money orders. This helps the client and the contractor to have a record and proof of the payments made at the time of ending the project contract.

Please Note: Pay more weightage to his experience in conducting similar projects to yours and know-how he has treated his past customers and did he made them feel happy at the end of the project. Know whether his past customers will be happy to hire him as a commercial contractor again and this will be one of the best qualifications he will have to be considered by you to act as your commercial contractor.

I hope this article has made you well aware of the most common mistakes you could make if you are looking for a commercial general contractor with a decade of experience in this industry, please feel free to contact us.

Relevant Resources:

How To Be Your Own General Contractor

Tips for Selecting the Right Commercial General Contractor In San Francisco? – Part 2