Papers, Please! What to Know When Hiring Contractors

Just think about this—you go to a doctor’s office for the first time and, hanging on the wall is an empty frame where his medical degree should be. You question him about it and he tells you, sure, he graduated from med school. He's totally qualified to wield a scalpel and prescribe drugs. But there’s no proof. At this point, you probably get off the examination table and head out the door. After all, with no degree, you probably wouldn’t let him take care of you. It could cost you your life.

Or how about this: would you ride around with someone who didn’t have a driver's license, or car insurance? Of course not—and you would question the wisdom of anyone who did.

Working with contractors is not much different. In Chicago, contractors doing work on residential buildings need some sort of documentation verifying that they are qualified to do whatever job they're doing. Some need certain licenses, some just need proof of insurance, and others need to prove they have both. Building and HOA administrators deal with contractors all the time, whether for a simple lobby repair job or a major capital improvement. Things can always go wrong on a project—that's just the nature of any business. But without the right paperwork, things can go from bad to much worse.

Due Diligence

It’s easy to find examples of this. A simple Internet search of ‘contractor wasn’t licensed,’ and up comes thousands of scathing service reviews and cautionary tales from all over the country. According to consumer advocate and rating website AngiesList.com, in 2010, several Chicago-based customers were owed more than $100,000 in total by one kitchen contracting company. The company either took payments and never started the work, or they started work on a customer's kitchen and never finished it. The consumer website states that city records indicated that the company wasn’t licensed.

To prevent such headaches, it's crucial that boards and their managers perform due diligence before hiring any type of contractor—ideally as soon as the call is put out for bids.

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