When Hiring An Independent Contractor

Unless your company is large enough to have employed individuals with all the necessary skills to repair and remodel the properties you manage, you will be looking to hire an Independent Contractor sooner or later. Here, briefly, are a few things to keep in mind:  

  • Plan Ahead - know exactly what you want to accomplish before searching for a contractor. Will you need a general contractor who will then be responsible for hiring subcontractors with the skills necessary for specific jobs or will you only need to hire a specific contractor, such as a plumber or electrician?
  • Ask Questions - if possible, obtain referrals from trusted friends. Look at the work a particular contractor has done for someone else. Check out any online reviews of the contractor. How long has the contractor been in business? Are there signs that he is going out of business? Get bids from several different contractors and compare their answers. What might appear to be a good deal may result in a shoddy job, so don’t go for ‘cheap’. A nice person is not necessarily an appropriately skilled person. Ask about who will actually be doing the work, when they will be able to start, etc.
  • Observe - how thoughtful is the contractor when visiting with him? Is he careful with his equipment, protective of your home, and does he pick up after himself? If he is careless when he enters your property to make an estimate, he may be careless in the way he does the job.
  • Confirm - make sure the contractor is licensed, experienced, and has a reputation for competence in the specific task you are hiring him/her for, and is known for his/her integrity. Check your state and local licensing requirements. Be sure a permit is obtained. Ask to see all documentation.
  • Insurance - though the contractor should be insured, it is often best to have your own insurance that will cover the contractor and his work. Check to see what your own insurance does or does not cover. It is not unusual for clients to not only sue a contractor, but also the management company that hired the contractor. Make sure all bases are covered. Again, be sure to ask to see the contractors certificate of insurance.
  • Contracts - read the contract through very carefully. Are the provisions generally stated or is it adequately detailed? Does it list the specific materials that will be used, the model numbers for parts, brand names, etc.? What is the payments schedule? How soon after the job is completed must you make the final payment? Will you be allowed time to see if the job was truly done correctly before making the final payment?
  • Taxes - if the sum of what you have paid out to an independent contractor is $600 or more in any given year, you must obtain his/her taxpayer ID number and file form 1099 with the IRS. Be sure to request form W-9 from the contractor to avoid being held responsible for backup withholdings.