How to Hire a General Contractor in NYC: The Ultimate Guide

Making plans for a home renovation can be an exciting but also daunting time. You’ll need to make many big decisions about your budget, design plans, and the general contractors doing the job. In NYC, the high demand for the services of general contractors often makes it difficult for customers to find reputable contractors. Those that are available may overextend themselves by promising more than they can deliver. Then, you have the charlatans and scam artists looking to take advantage of customers.

That said, good contractors are out there; finding them simply takes a bit of research. To ensure you get the best person for the job, this guide will take you through everything you need to know about hiring a general contractor for a home renovation project in NYC.

What is a General Contractor?

An NYC general contractor is a professional who manages all the work in your project from beginning to end. They are often skilled in many different trades, including carpentry, plumbing, electrical work, and more. In addition, their duties include hiring subcontractors, sourcing materials for the project, and finding suitable equipment and tools.

Think of them like office managers. They oversee the project’s big-picture planning while ensuring everyone is where they need to be and doing what they’re supposed to do. They also handle the administrative side of things, such as scheduling, payroll, trash cleanup, and implementing safety standards and building codes.

Why Type of Licensing Do General Contractors Have?

Every state in the U.S. has specific licensing requirements for general contractors. In New York State, all general contractors receive their licensing through the city or county agencies where they will work. The only state-level licensed contractors are asbestos handling contractors and crane operators. In NYC, the NYC Department of Consumer Affairs handles licensing for general contractors, also known as home improvement contractors. Licensing is required for any projects involving construction, repairs, demolition, or remodeling of a building when the total cost of the project is above $200.

All those applying for licensing must pass a background check and an exam to be accepted. In addition, all construction projects in NYC require a Home Improvement Contractor’s Bond of at least $20,000, on top of their general liability coverage. This bond protects the contractor and their client from any mishaps. Larger construction projects will require a larger bond for complete coverage, which increases the project’s overall cost.

Types of General Contractors

There are at least two types of general contractors, traditional and design-build. Traditional contractors oversee the implementation of design plans that have been put together by someone else, typically an architect or engineer. Design-build contractors provide a complete package by working with the client to plan and implement the entire project. This makes them a lot more dynamic than traditional contractors when making changes in the project.

There is also a third group, subcontractors. These are not general contractors that oversee the entire project. Instead, they are underlying workers charged with handling a specific aspect of the project, such as electrical work, roofing, or general labor. The general contractor may bring in subcontractors for the entire project length or for a limited time until their job is done. It should be noted that subcontractors are not employed by the general contractor and that the client has full discretion on whether to accept the general contractor’s recommendation for a specific subcontractor.

What to Look for in a General Contractor

There are some essential things to look for in a general contractor. The first one is practical experience with similar projects in the past. They should have both broad and general knowledge of the construction process. Experience also helps with estimating timeframes and costs for the project. While a college degree in construction management or engineering is a plus, not having one shouldn’t be considered a deal breaker. Many general contractors only have a high school diploma, which can be more than enough, provided they have plenty of on-site experience.

Confirm that they’re also fully licensed by checking with the NYC Department of Consumer Affairs. They provide a database to search and verify all licensed general contractors in the city.

The next thing to consider is what previous clients have to say about them. Ask your general contractor to provide three to five references. Don’t be afraid to call these previous clients and ask about their experience. Also, don’t just rely on whatever information the contractor provides, do your research by searching their name online. One or two bad online reviews should be taken with a grain of salt. But if the number of negative reviews spirals into the dozens, then it’s probably safe to assume they’re not a good choice.

Do you get along with the contractor?

Lastly, determine whether the contractor is a good fit for your project. Being fully licensed with a high level of experience and dozens of glowing references are necessary checkboxes to make, but it’s also important that you can get along with them. Both you and your chosen contractor will be working closely, side by side, for the next several months. Spend a little time getting to know them during the initial consultation phase. If this isn’t someone you can easily see yourself working alongside, you should probably find someone else.

How Do I Find a General Contractor?

The best contractors always tend to be busy with other projects. In which case, you may need to be patient and wait for them to become available. In the meantime, you can continue searching. Some ways you can do that include:

Word of Mouth

Do you know any friends, family members, neighbors, or work colleagues that recently completed a home renovation project? Ask them about the general contractor they hired and whether they are someone worth recommending. Many good contractors tend to be found this way because when someone is good at their job, the word gets out pretty fast.

Do Some Online Sleuthing

See what you can find online. Sometimes a few good reviews or mentions on social media, chat forums, or review sites can be enough to point you in the right direction. There are also some online services where, for a fee, they can provide you with a curated list of licensed local contractors that fit the scale of your project.

Ask Your Real Estate Agent

Whether you’ve just bought your home or have had it for a few years, the buyer’s agent who helped you close the deal is still around to help if you need it. Most agents keep a list of past industry professionals they’ve worked with who they can recommend to clients. Ask them for recommendations for local general contractors.

How Much Does It Cost to Hire a General Contractor?

The cost to hire a general contractor depends on the scope of the job, what it involves, and where it is and can range from a few hundred dollars for a small project to several thousand or tens of thousands for a large one. When you first begin searching for a general contractor to hire, make sure you already have the plans for the project drawn up. With that, they can provide you with a quote on what you can expect to pay for their services and a rough estimate of the materials costs. If you’re hiring a design-build contractor, the service cost will be considerably more than that of a traditional contractor.

Ask anyone who’s made it through a home renovation project; they almost always take longer and cost more than expected. Be aware that most general contractors charge by the hour, so if your project takes longer than expected to complete (which they usually do), this will cost you more. Therefore, you should ensure a sizeable reserve fund for when your project inevitably exceeds the budget.

How Much Does a General Contractor Make?

An NYC general contractor makes about $45,000 to $60,000 a year. However, this can vary significantly based on the type of work they do and their experience level. Some of the most in-demand general contractors can make more than $100,000 a year, but that figure can drop to under $40,000 a year for new general contractors who are just starting.

Tips on How to Hire a General Contractor

While you might be tempted to quickly find a general contractor so you can start your project immediately, there are precautions you should take to ensure you don’t make a costly mistake. Consider the following tips when choosing a general contractor:

Be Wary of Scam Artists

There are a lot of unscrupulous individuals out there that try to pass themselves off as licensed and experienced general contractors. They tend to pop up in large numbers after a major hurricane or flood that damages many homes. Be extremely wary of any unsolicited offers from “contractors” that show up at your door or repeat phone calls where they promise you the moon for a low price. Any high-pressure sales tactics should be considered a red flag.

Ensure You Receive a Written Contract

New York State law requires that all customers receive a written contract for any home improvement project that exceeds $500. The contract should contain the contractors, name, address, contact information, the approximate start and completion date for the project, a detailed description of the work to be performed and materials to be provided, and a notice advising you that you have three business days to cancel the contract, and a notice that all payments before the completion of the project must be kept in an escrow account. Do not hand over any deposit until both parties sign the contract.

Never Pay Full Price Up Front

No legitimate contractor will ever pressure you to pay the full price before completing the project. There will be an initial deposit, though you can probably negotiate on the price if you feel it is excessive. Also, ensure that you set up a payment schedule and adhere to it. Contractors must place all payments in an escrow account and notify you within five business days of where the funds are located.

Work With Your Insurance Company and Building’s Board

Before your contractor starts the project, consult your insurance company to ensure your insurance policy covers the work. Wait until you receive approval from your claims adjustor before beginning any substantial or permanent work. You’ll also want to check with your building’s board and have them sign off on your project. Ensure that you adhere to any building rules about renovations, such as appropriate working times, and not make any alterations that affect the common areas or your neighbor’s units.

10 Questions To Ask a Contractor Before Hiring

You’re renovating your New York City apartment, and you’ve narrowed the contractor search to three. Now things get tricky because the firm you choose to oversee the process could make or break your renovation. Poor choices could mean shoddy craftsmanship, unexplained costs, or an unfinished remodel. A great contractor will realize your vision and get the job done on schedule and within budget.

Selecting the right person to manage your project is one of the most critical decisions. Rule number one: be sure they have experience renovating New York City. Any contractor who will perform work must meet the minimum for your particular building. What’s more, your building will require pre-determined liability insurance.

Once these two key points are addressed, ask these ten questions before hiring anyone to run the show.

How long have you been in business?

Companies that have been around longer not only have more experience, but they’re less likely to scam and “go out of business after receiving a large deposit.” (This happens in New York City and in other places too.) If you don’t know this, this should be one of the first questions you’ll ask.

How many projects does your firm manage at once?

You’ll want to ensure that your contractor doesn’t take on too much of a workload, so he has plenty of time to dedicate to your apartment. Besides an MIA contractor, there’s nothing worse than one who’s spread himself too thin.

Who will be my project manager?

Will you meet with the actual manager, or will he designate a site super? ; the latter is more likely. Meet them before making your final choice. You’ll want to feel comfortable with the person calling the shots.

Personally, how much time will you spend on my renovation?

Even if they are not the person on-site, you’ll want confirmation that the company owner will be involved and check in at least weekly.

Can I have three references?

Always ask for references to get the opinions of past clients. Come up with a list of questions for them, too, such as, “Would you hire him or her again?”

Is this an estimate or the price?

Know how you stand on pricing from the very beginning. The more specific you are from the get-go, the less likely you will discover surprises later. If your quote is just an estimate, find out how much the final price will be within 20 percent.

What’s the biggest challenge in my project that could keep you from completing it on time and within budget?

If your would-be contractor has doubts, get them during the interview process. Every remodeler has strengths and weaknesses; ensure they feel confident and experienced enough to handle your redesign.

How many hours per day will you work on my project?

You should expect sub-contractors to be at your project, working daily between business hours (9 am and 5 pm, except for weekends). If no one is working, your renovation isn’t getting finished. Confirm this before you start.

How do you handle changes once the project is underway?

Ask anyone you interview how they will bill for changes and the process for making a change. Do you tell the sub-contractor or email them directly? Find out the protocol now so you can nip any faux pas in the bud when you’re knee-deep in construction.

How will you invoice me?

Invoice terms should be in the proposal, but if they’re not, you’ll want to know if you’ll be billed monthly or at the end of each project phase. Be sure the terms are spelled out.

How to Get Along with Your General Contractor

During this process, consider the contractor and yourself as partners in the project. Staying on the same page is crucial, so your remodel can finish on time and within the established budget. Try and keep these five tips in mind and hopefully, you’ll see eye to eye and avoid potential bumps in the road.

Establish boundaries from the get-go

Your contractor and subcontractors will probably spend more time in your residence than you. It’s essential to establish boundaries early on. Let him know what’s acceptable and what’s off-limits. Perhaps you’re OK with workers taking lunch breaks in your apartment, but you’re not OK with smoke breaks. Be clear about every last detail from the beginning, so no stone goes unturned.

Communicate openly and regularly

Treat your relationship with your contractor like you do your marriage. Schedule weekly meetings to review the job schedule, delays, issues with materials, delivery, etc. You’ll want to communicate throughout the process and ensure your relationship remains in good standing until the final punch-list items are completed. The more you talk to the person and keep communication lines open, the less likely you’ll experience friction and disagreements.

Pay contractors on time

If your contractor delivers the goods, expect to pay on time. Decide on the payment schedule at the start of the job and stick to it. Not only does he need to eat, but his subs will also. Don’t withhold money unless the contractor isn’t holding up his end of the deal. And then, it’s best to nip any issues in the bud and confront him immediately. This apartment or townhouse is your home, but this job is his livelihood.

Let them do the job

Don’t micromanage your contractor. You hired him for his expertise and probably because you trusted him against others interviewed. Let him work and follow his lead. Don’t be afraid to ask questions, but create a list to review during your weekly meetings rather than bombarding him daily.

Be sure every detail is in writing.

Besides your cost estimate and scope of work, be sure they wrote down any revisions. Change orders are an everyday aspect of construction projects, and having records will keep the remodel running smoothly and help avoid errors.

Make sure the contract includes a mediation clause. You’ll never need to use it, but knowing how disputes are handled legally should something go wrong will make you sleep easier at night.

Final Thoughts

Finding the right general contractor for your home renovation project can be challenging, but the results can be well worth the effort when you do your homework. Unless you’re a highly experienced construction worker who has previously handled similar projects, it’s always best to leave jobs like this to the professionals, especially considering all the bureaucratic red tape and building codes that must be followed.