Commercial Contractor Red Flags: What to Watch for Before Signing a Contract

Completing a commercial construction project in the Twin Cities requires the skilled work of a local general contractor. There are a lot of moving parts with any construction job, and thus a lot of things that can go wrong if the project is mishandled. If you want to make sure that commercial construction work is completed on-time, on-budget, and without any major mistakes, it’s crucial to work with a reputable commercial contractor.

To ensure that you’re working with a trustworthy company before any contracts are signed, be on the lookout for red flags that indicate someone should be avoided. We’ve compiled a list of these red flags that are telltale signs you’re dealing with an incompetent or disreputable commercial contractor.

7 Red Flags That a Commercial Contractor Isn’t Reputable

Vague Contract Terms

A contract for a commercial construction project in the Twin Cities should be written with clear and specific terminology. Project timelines and milestones, as well as payment schedules, should be outlined in detail. If you see a contract with vague terminology, it’s a huge red flag. Disreputable commercial contractors may leave a contract deliberately ambiguous so that they cannot be held accountable for delays or for labor that goes beyond the discussed budget.

No Licensing or Insurance

Any reputable general contractor in the Twin Cities should have valid licenses and proper insurance for the work they’ll be doing. If a contractor cannot provide proof that they have obtained the necessary licensing and insurance, then they cannot be relied on. When a construction company operates without these things, your own company could end up being held liable for injuries or damage caused by the work, as well as code violations discovered after the work is completed.

Excessive Payment Upfront

In most cases, a general contractor in the Twin Cities area will request an upfront payment of 10-20% of total project cost. When a commercial contractor requests more than this on the front end, it’s a red flag. Some shady contractors may even ask to be paid in full before they begin work. At best, this indicates issues with cash flow on the contractor’s end; at worst, this could be a complete scam.

No References or Portfolio

Two pretty standard things to ask for when vetting a commercial contractor are references from past clients and a portfolio of the construction team’s previous work. Any reputable contractor should be able to provide both of these items readily, so if they don’t, it’s a red flag. An experienced or shady commercial contractor will probably be evasive when asked for references or a portfolio, or they may even try to deceive you with examples that are obviously fake.

The Bid Sounds Too Good to Be True

As the old saying goes, if something sounds too good to be true, that’s because it is. If a general contractor gives you a bid for a commercial construction project that sounds impossibly low, this isn’t a cause for celebration, it’s a huge red flag. When a bid sounds too low, ask why and make sure there’s a good reason. Otherwise, a shady contractor may be trying to bait you with a low upfront bid while planning to charge you much more later on.

Disorganized Communication

Good, consistent communication is the foundation of any project. If a commercial contractor seems poor at communication and generally disorganized when you do meet with them, this is a red flag that shouldn’t be ignored. Trust us, you don’t want to work with a construction team that seems unresponsive and can’t keep their facts straight. Working with such a company can prove to be a complete nightmare for the duration of your project – if they manage to finish it at all.

Prior Legal Disputes

Before signing a contract with a commercial contractor in the Twin Cities metro, it’s a wise idea to check court records for past legal disputes. If you see multiple lawsuits by either prior clients or sub-contractors, this is likely a sign that you’re dealing with a disreputable business. Of course, even the most legitimate general contractors may have some legal disputes in their history; what you’re looking for is a consistent and ongoing pattern of legal troubles.

A Reputable Commercial Contractor in the Greater Twin Cities Area

At Heritage Construction, we’ve worked hard to build our reputation as a trustworthy construction company that can be relied on for quality services, good communication, and transparent pricing. Connect with us today if you’re interested in our commercial construction services in the greater Twin Cities area!