(WMC-TV) - The Better Business Bureau is the place to start shopping a contractor. It's not the place to stop shopping a contractor.
Because the BBB tracks and certifies so many companies, sometimes it misses things.
A good example is the investigation in the video attached to this story.
The bureau failed to check the Mississippi licensure status of Mid-South Home Mechanics, Inc., of Bartlett, TN. The home improvement contractor is licensed in both Tennessee and Arkansas, but it never secured a Mississippi contractor's license before it entered a more than $25,000 contract with consumer La'Shelle Chandler of Olive Branch, MS. The Mississippi Board of Contractors requires a home improvement company to apply for a Mississippi license -- even if it holds an active license with a reciprocal state -- for any residential job that exceeds $10,000.
At the time Chandler signed the contract, the BBB had listed MHM, Inc., as an accredited BBB member with an "A-" rating. Then the company started to quietly rack up complaints with the bureau, including Chandler's. The bureau eventually revoked MHM, Inc.'s accreditation, assigned it a "F" rating and acknowledged it did not check the status of the company's Mississippi credentials.
"We check licenses when a business applies and when they renew," said Nancy Crawford, communications director for the Mid-South BBB. "But that is not a real-time, dynamic license check. It's the business's responsibility to know what license is required, and it's the consumer's responsibility to check."
With that in mind, here's my checklist for shopping a building/home improvement contractor:
1. The Better Business Bureau. You should still start with the bureau. Build a list of contractors who are listed as "BBB-accredited" and carry at least an "A" rating. BBB-accredited businesses automatically agree to arbitration in the matter of consumer complaints -- and that arbitration is binding.
2. Your State Contractors Board. Depending on the type and cost of your job, your state may require the contractor to hold an active state contractor's license. If you cannot verify the licensure status of the contractor, drop that company from your list, no matter what its BBB rating. Also, just because a contractor is licensed in one Mid-South state doesn't necessarily mean it is licensed in another Mid-South state. Mid-South states recognize reciprocal licenses only in certain conditions.
3. Get 3-5 Estimates. Once you've assembled a list of highly-rated and properly credentialed contractors, insist on estimates from each of them.
4. Verify Insurance. Ask the contractors to provide proof of insurance. According to Angie's List, contractor's insurance typically falls into one of two categories:
LIABILITY: covers property damage and injuries caused by the contractor's work.
WORKERS COMPENSATION: covers workers injured on the job on your property, regardless of fault.
5. Verify Bonding. Most states require contractors to carry a surety bond. The consumer can file a claim against that bond with the bonding company should the contractor fail to complete the job, fail to pay the on-site workers or fail to pay for materials. Ask the contractors to provide either proof of bonding or the contact information of the bonding company, then verify the bond with that company.
6. Check Your City's/County's Requirements. Some municipalities require contractors to carry additional credentials. Crittenden County, AR, for example, allows a privilege license for contractors who perform small jobs for less than $20,000, but they must carry an Arkansas contractor's license for jobs above $20,000. Make sure the contractor is cleared to pull building permits, electrical permits, plumbing permits, etc. with your city and/or county.
7. Make Your Choice, But Keep Records. Keep copies of your contract, licenses, proof of insurance, proof of bonding and any additional requirements. Consider keeping a photo or video "diary" of the construction's progress.
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