Avoid home renovations nightmares by following these simple steps when hiring a general contractor or a renovation company:

1. Have a set of renovation blueprints to detail the scope of the project.

The renovation process should begin by taking a clear and detailed brief with you on your renovation requirements. These requirements should be translated into design sketches or blueprints which is often done by a general contractor / remodeling company. Remodeling  drawings and blueprints will provide more details about the scope of the work leading to more accurate estimates and a renovation budget.  At least, you should be able to sketch out the plan to scale, denoting dimensions such as windows and doors, openings,  fireplaces etc. Also be prepared to provide your finishing ideas including the types of materials that are being considered. If you need help with design and drawings, most general contracting companies can also provide the design services and create renovation blueprints. 

2. Assemble the list of prospective home remodeling companies/general contractors. 

In most cases, a general contractor is the person who takes drawings from the architect and builds the home. Most licensed contractors are competent, honest, hardworking and financially responsible. That said, given the potentially large amounts of money you will give to your contractor, the risks are enormous. Do your homework and you can avoid the rare case of being a victim of an unscrupulous contractor.

How to you pick a general contractor? Start by asking friends and relatives, who have recently used a contractor, for their recommendations. Another excellent source of information is the Web/ local listings. 

3. Conduct phone interviews asking the following questions: 

• Do they take on projects of your size?


• Are they willing to provide financial references, from suppliers or banks?


• Can they give you a list of previous clients?


• How many other projects would they have going at the same time?

4. Conduct reference checks with former clients, confirm a valid business license.

Once you have some names (I recommend a minimum of three contractors per job),  check for a valid contractor's license, insurance: liability, worker's compensation and auto insurance. The certificates are your proof that the contractor is currently insured.

The best general contractor to work with is the one who has a solid experience. You can determine this by reaching to the past clients and checking references. If they indicate they were satisfied, establish whether they would be willing to use the same contractor for related problems. 

In Calgary, contractors are required to hold a valid City of Calgary business license and The City has the authority to suspend or revoke this license. Before you hire a contractor call 3-1-1 to confirm that the contractor holds a valid business license.

Also note that most of renovations require Building or Development Permit and to verify  the requirements you can check The City of Calgary Home Building and Renovation Web page: 

http://www.calgary.ca/PDA/DBA/Pages/Home-building-and-renovations/Home-Building---Renovations.aspx

Typically, a permit is going to be required whenever any exterior, structural, plumbing or electrical work is done. 

5. Bids

A conscientious general contractor will want not only a complete set of blueprints but also a sense of what homeowners want out of a project and what they plan to spend. To compare bids, ask everyone to break down the cost. Generally materials account for 50 percent of the total cost; the rest covers overhead, labour and the typical profit margin, which is 15 to 20 percent.

6. Set the payment schedule

Payment schedules can be a detailed payment plan for a construction project. The goal is to make progress payments to the general contractor as work is completed.  The payment schedule is typically proposed by the general contractor and may be further negotiated between the contractor and the homeowner.

The number of payments in the payment schedule will depend on the size of the project and the preferences of the builder. A payment schedule of five to seven payments is common for a new house.

Most payment schedules link payments with milestones in the project, such as completion of the foundation and completion of the rough framing. Sometimes, the payments are more generally based on the percent completion of the total job.  In either case, the payment should be roughly equal to the value of the work completed. These line-item values have been determined by the renovation company in their detailed estimate.

7. Put it in Writing - Draw a Contract

Draw up a contract that details every step of the project: payment schedule; proof of liability insurance and workers' compensation payments; a start date and projected completion date; specific materials and products to be used; and a requirement that the contractor obtain lien releases (which protect you if he doesn't pay his bills) from all subcontractors and suppliers.  

Finally, remember that as soon as a change is made or a problem uncovered, the price can increase and the project can get longer. It is critical that you keep track of these changes in signed (by both a contractor and a home owner) changes orders.

Insist on holding a minimum of ten percent of the total job cost until the work has been completed to your satisfaction and per the contract requirements.