Home » Planning » Subcontractor Agreements

So now you have completed the planning stages for your new small house, received the building permit, and obtained your own liability insurance. Now is the time to find a good subcontractor and establish a workable Subcontractor Agreement.

There are basically two ways to go about finding a good subcontractor. One is by word of mouth and the other is through the yellow pages or other similar sources of advertising. There are also contractors that operate by both word of mouth and advertising sources.

The word of mouth method is a good way to begin your search for a good building subcontractor. People are more likely to be honest with someone they know and would not want to sacrifice their friendship or acquaintance with you.

You can begin by asking your friends and acquaintances for suggestions. You can also ask around to your local businesses and Chamber of Commerce for recommendations. If you live in a small town, you may consistently get good reviews on the same subcontractor. The subcontractor will most likely be reliable and deliver quality work because word tends to travel faster in a small town.

A lot of subcontractors have many jobs on the table at one time. It is a good idea to find out if they are currently overextended and their history of delivery time for the completion of past projects. Some subcontractors have long-term commitments to other general contractors that they must give priority to. Ask them if they do, and if they will be called away for this “bigger” client (thus extending you job).

If you have the time and the resources, it may also be a good idea to create a pilot project for subcontractor prospect. This could be a little project on the parcel where you are building your small house or perhaps where you are currently living. Have them construct something small that maybe you were going to do in the future anyway- like a shed, garage, or chicken house.

This will give you a feel for the work etiquette and workmanship quality of the contractor and you will find out if you are comfortable with the professional relationship. If you have this kind of time it could save you a lot of future headaches down the road.

I have personally dealt with levels of professionalism all the way from having very formal meetings to discuss ideas, plans, and contracts… to having to bluff my tolerance of language to make a sailor blush. Decide on your level of tolerance at the start, and how you’ll handle the inevitable blue-collar atmosphere. Having been brought up in a white-collar home with a PhD father and Master’s degree mother, this was a bit of an adjustment for me.

If you look for a subcontractor via the advertising route you may have to do extensive research. Sometimes the advertisement looks good on paper but the workmanship quality is questionable. If at all possible, try to find out more about the subcontractor through word of mouth. If this is not possible, try to research a history of their work and perhaps even visit some of the sites where they completed work. Ask if they’d feel ok about letting you contact and visit their past projects. If they hesitate, or say they have to get back to you on that (and then don’t), take that as a red flag.

If you are considering a subcontractor that has many advertisements, you want to follow the same procedure as word of mouth and find out how many jobs they have on the table. Remember to ask if they have long-term commitments to main contractors or developers. That could mean your project will turn out to play “second fiddle” to their bigger contractor obligations.

Some subcontractors with large advertising budgets are bonded. This guarantees that they will perform the workmanship in a timely manner and as promised. If the subcontractor disappears or does a bad job and refuses to fix the errors, the bonding company is responsible.

Once you decide on a subcontractor you want to make sure he/she will be willing to sign a subcontractor agreement. This will protect you as the manager of the project and homeowner from any costly legal expenses during the course of the project. You need to also make sure to place in writing which party is carrying the worker’s compensation insurance. If the subcontractor is not willing to sign this agreement it is a good idea to move on to someone else.

Make sure to ask for written proof of their liability insurance. This can often be directly faxed or e-mailed to your insurance agent. If they try to avoid the issue or talk you into just letting them work the job without coverage you should thank them for their time, but keep looking.

If you spend the time doing your homework at the beginning of your house building project, it will save you tons of time and headaches in the long run and you will be closer to achieving your dreams of owning a small house.

Other Resources for Finding Subcontractor Agreement Contracts

Woodworking Industry Information has a downloadable doc file you can start with.

‘Lectric Law Library has a contract that you can copy and paste into your own word processing program. They also add a caution that the validity of their contract will vary from State to State, etc., so getting local legal advise is pertinent.

Some pdf downloadable documents:

Here’s a subcontractor agreement from the State of Oregon.

InfoForBuilding.com has a fairly basic subcontractor agreement contract to get your started (pdf form).