What does it mean to be my own general contractor?
As the name implies, general contractors typically handle a fairly wide range of construction projects. Some might specialize in home construction, while others focus on remodeling or additions. Each of these jobs requires specialized skills from professionals like roofers, plumbers, carpenters, and electricians.
The general contractor ensures that the different parts of the project are working together efficiently. They procure materials when necessary and keep the project on schedule. They often handle administrative matters like permit applications, scheduling, and inspections.
Property owners, however, can organize a construction project themselves and may hire subcontractors to do each part of the work, but this can be challenging. Whether to hire a general contractor or be your own general contractor depends on many factors. Here are some questions to ask yourself:
Do I understand the scale of the project?
Construction projects require planning. They also require flexibility in case something derails the plan. Many general contractors have a knack for determining time and resources required for a project, and can anticipate or handle the likely complications.
Do I know the building codes and other regulations in my area?
Experienced general contractors not only know how to build something, they know the local building codes, and how to obtain the right permits from city or county officials. When you act as your own general contractor for your project, you are ultimately responsible for complying with all the legal requirements.
Do I have the necessary knowledge and experience?
A general contractor must know what skills are needed for a project, and they must plan ahead to determine when they will need each subcontractor’s services. An electrician cannot install wiring in a new garage, for example, until the framer has finished their work.
Can I manage multiple subcontractors?
As the general contractor, you may hire subcontractors, make contracts with them, and monitor their work. Each step in this process can take time and energy, and having multiple subcontractors working on the same project at the same time can be complicated.
A general contractor must be ready to remove a subcontractor and find a replacement if the work is not satisfactory or on time.
Do I have the time to devote to managing the project?
If you want the project done quickly, managing it could be rather demanding on your time. If your work schedule is flexible, you may be able to do your normal work around your subcontractors’ and inspectors’ schedules. If you are not able to line up schedules, prolonged delays can lead to additional costs piling up.
Can I shoulder the risk of not having a general contractor?
One benefit of hiring a general contractor is that they act as a buffer between you and the various subcontractors. If something goes wrong, or someone is injured, general contractors are typically insured and paid to be responsible for those issues. When you serve as your own general contractor, you may benefit from always getting a written agreement and confirming you have the right insurance coverage in place.
How do I make sure I am legally protected when hiring subcontractors?
Get your agreements in writing, and signed.
A Subcontractor Agreement formalizes the relationship between a general contractor and a subcontractor. It can protect both your rights and the subcontractor’s rights by laying out the terms of the agreement, and what happens if the terms are not carried out. A Subcontractor Agreement may contain:
- An effective date, timetable, and completion date.
- Details of the work to be performed.
- Amount and form of payment.
- Who will be responsible for insurance, purchasing materials, and obtaining permits.
- Contingencies for going over budget or tardiness.
You might consider using specific agreements tailored to different types of subcontractors. A Painting Contract, for example, is different from a Roofing Contract. Similarly, a Carpentry Contract or Drywall Contract differs from a Landscaping Contract.
Do I need a license to hire subcontractors to work on my home or property?
License requirements for general contractors and subcontractors vary from one state to another, and they may vary among cities and counties within a state. Some states will not require a license if you are only acting as a general contractor for your own property. Even if your state does not require any sort of license, though, your city or county might. Or there may be other restrictions on what work a property owner can do themselves without being licensed.
You may also have to verify the licensure of the subcontractors you hire. In some areas, you could face penalties for hiring an unlicensed subcontractor. If you are considering doing otherwise, you may want to ask a lawyer about the potential risks.
Do I need special insurance to be my own general contractor?
Insurance requirements vary from one area to another. But if you are hiring your own subcontractors, you may want to consult with a lawyer about state and local legal requirements. You may want to adjust your insurance coverage, or purchase a supplemental policy, to cover you, your property, and the workers you hire.
Additionally, many construction projects include one or both of the following bonds, which are similar to insurance policies:
- Performance Bond: A homeowner or general contractor can obtain a performance bond to ensure that everyone completes the job successfully.
- Warranty Bond: This bond protects the homeowner or general contractor if the work has defects.
What are the pros and cons of being my own general contractor?
Acting as your own general contractor can have some benefits:
- You may save money by not paying a general contractor’s fee.
- You can also save on material costs without a general contractor’s markup.
- You maintain control over the project, its scheduling, and its costs.
- You develop knowledge and make industry contacts.
On the other other hand, there may be disadvantages:
- You may face a steep learning curve, which can lead to higher costs.
- Cost savings often come at the cost of your time.
- You have more risk if a subcontractor is injured, or fails to perform.
- Inexperience can lead to unfinished, failed, or subpar projects.
How can I handle a dispute with a subcontractor that I hired?
Experienced general contractors have the benefit of established relationships with a network of subcontractors they know are reliable. General contractors also typically charge for overhead and contingencies, which allows them to absorb the costs of a bad subcontractor, or other small errors. When you serve as your own general contractor, disputes with subcontractors are your own responsibility, and the costs are yours to absorb.
If a dispute happens, a project can be delayed and costs can balloon. Before taking action, you may want to review your contracts and talk to a lawyer about your options. You typically have a few options to move past disputes quickly:
- Your contract may contain clear instructions on how to resolve disputes.
- Talk to your subcontractor about how they can remedy the problem to your satisfaction.
- Fire the current subcontractor and hire a new subcontractor to fix the issue.
The best way to resolve a dispute is to prevent the dispute from ever happening. Thorough research and reference checks before hiring a subcontractor helps, along with maintaining clear communication with each subcontractor while work is underway. When you discover a problem with a subcontractor, you may want to stop work from moving forward. Subcontractors are generally entitled to pay for the work performed, even when it is bad, so stopping the work can lead to saving some money.
Being your own general contractor may seem daunting at first, but with the right support, a construction project can get done the way you want it. If you have more legal questions about how to be your own general contractor, reach out to a Rocket Lawyer network attorney for affordable legal advice.
This article contains general legal information and does not contain legal advice. Rocket Lawyer is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.