203k Contractor

Be sure your contractor is experienced and qualified! A handyman might change a lock or some other minor repair, but never manage the whole project.

Building contractor reviewing plans with owner

The general contractor is the responsible contractor and is working for the owner. The general contractor may do some of the work and he may use subcontractors that are working under him.

Subcontractors are not employees of the general, but contractors themselves.

The owner has no authority over the subcontractors as they are not working for the owner, but the general contractor. In the case where the owner is not satisfied with the sub-contractor, he must discuss it with the general contractor to resolve any issues.

This explains the legalistic order of things, but in the real world the sub-contractor wants to keep the owner happy and address his concerns.

Both the contractor and the owner should have a copy of the "Code check" book.

The owner should insist,

the Contractor and any subcontractors provide him with certificates of Liability and Worker’s Compensation insurance before work begins. In most areas, if a subcontractor is working without employees, he is exempt from worker’s comp. If an employee gets hurt on your project, you as the owner become liable for all expenses incurred because that accident.

If you get the necessary Certificates of Insurance, you should have nothing to worry about.

Which bid should I accept?

Through my experience in reviewing bids, I find there are three basic categories of bids. Many contractors do not understand how to put together a bid that is both proper and reasonable, and that also allows the contractor to complete the project and earn an income.

One

If the contractor is overly busy and cannot easily take on a new project, he may submit a high bid and figure a way to do the job if you are willing to pay his premium price.

A bidder that does not understand how to figure the cost of construction, but wants to be sure he will not lose money, will also bid high.

Two

Some contractors will low bid the job planning to renegotiate a higher price after the job starts. He will often use the excuse “That item was not included in my bid”. Be sure your contract clearly explains all of the items that are to be included. I recommend owners insist that the contractor list all the items not included in the bid.

Three

The middle bid is often a contractor that wants the job and feels his bid will complete the project as specified and earn a reasonable income.

Change orders

Items that come up that were not anticipated and not included in the original contract require change orders. Change orders should include a description of the change and who is going to pay for it. Put it in writing, signed and dated by Owner, Contractor and Consultant.

This has nothing to do with honesty, but memory. In a short time we forget what we agreed on.

203k lenders must also approve the change order. Usually Change Orders are "OK" with the Change.

on Building codes:
“Who Uses the Building Codes?

To become a HUD approved 203k consultant;

  • 203k consultant must have a minimum three years’ of experience as a home inspector, or general contractor. A state-licensed engineer or state-licensed architect does not need to document three
    years of experience
  • State licensing requirements (remodeling or general contractor, home inspector, etc.). In those states where a Home Inspector or contractor is required to be licensed, the Department requires the applicant to be licensed and to provide proof of that licensing
  • A narrative description of the current/prospective consultant's ability to conduct feasibility studies review or prepare architectural drawings, use proper methods of cost estimating, prepare change orders, and complete draw inspections
  • A certification verifying that the consultant has read understands the requirements of HUD Handbook 4000.

When approved, you should receive a 203(k) Consultant Roster Certification on their letterhead.

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