Category Archives: New Furnace and Central Heating

How to avoid paying twice for heating and AC equipment installations

I recently attended a meeting here in Austin, and had some spare time to visit with two other attendees. It turns out that one was an attorney, and another was a heating and AC contractor.  The attorney told a really disturbing account of how she had to pay twice for her home renovation and new heating & AC system. During this discussion, the HVAC company owner shared his experience on how to avoid getting a lien placed on your property, having to pay twice for materials, labor, or both.  Although our discussion was about HVAC, the same process holds true for most any type of home or building improvement projects such as roofing, wiring, plumbing, windows, kitchen or bathroom renovations.

The particulars on this subject vary by state or local jurisdiction. Before going further, I’ll state the following disclaimer: this general article is in no way intended to be advice for a specific location or situation. Rather, the intent is to make you aware of potential problems. Then, you can choose a good contractor, and if needed check with your local authorities or attorney to take preventative action that is appropriate for your location.

Framing the potential problem: unpaid people “downstream”
Here’s the scenario you basically need to avoid: paying a contractor for materials and labor without assurance that they have paid suppliers of materials and sub-contractors. The reason is straightforward: even if you pay your contractor in full and in good faith, if that contractor does not pay others “downstream” who provided materials or labor, those downstream parties could come back and seek payment or other remedies directly from you.

Outline of some ways to avoid paying twice

Below are some tactics you can use or combine to avoid issues:

  1. Most importantly: deal with reputable contractors that you have thoroughly vetted. In addition to paying everyone who is owed, stand up contractors also are usually bonded, carry insurance, keep current with technical updates, and have other attributes that benefit you.  Keep in mind that the cheapest bid for a new heating and AC system may not be the best value. Over its life, monthly utility bills and other operating and repair costs will often be higher than the initial purchase price of your system.  Get a checklist here.
  2. Get release of lien documents signed by all parties who might be able to make a claim for payment against you or file a lien against your property.  There are several types of releases – get the correct release for your situation and locality.
  3. Consider paying with “two party” checks:  make the check payable to both the general HVAC contractor and second parties, as appropriate. The second parties can be the supplier of materials or labor such as a sub-contractor.  For this to work, though, you have to know who the second parties are and how much they are owned.  If the contractor has “issues” you might not have access to all the info you need.
  4. Pay suppliers directly and separately for materials. Of course, you will need to work with the contractor to make sure the equipment is correctly sized, etc. Make separate payments for labor costs and use the tactics above.

In some cases, paying with a credit card might give you some leverage.  If anything about the project does not work out as needed, you might be able to get the credit card company to help you remedy the problem before you pay your bill to your card issuer.  However, if the contractor’s bank account were to be closed, there could a lot less leverage to exert.  If you are financing your system, your lender will often have a say in who gets paid and how the funds are disbursed.

If you have experience with this topic, please send your comments in so that others can benefit.

Compare Bids for a New Heating AC System AND Anticipate Contractor Add-On Costs

Comparing Equipment Features
Attempting to compare heating and AC brands, or shopping for features get the most attention from buyers. We wrote about this in last month’s blog and in other place.  We provide a free grid to compare new equipment cost at a glance. From your research or bids, you can fill in the blanks on this printable chart to cut through the “noise” and understand the equipment efficiency and other objective features. However, this equipment must be installed as a system in the structural environment of your home or building, which has variables. So, on to our main topic.

Preparing for What ELSE Might be Necessary to get a New HVAC System Installed
In situations where the new heating and cooling equipment is going into an existing structure (as contrasted with new construction) there are some major potential “gotchas” to prepare for.  I’ve experienced this personally, so hopefully you can benefit from my lessons, some of which were costly. Two good examples of this are electrical wiring and ductwork. They both have the potential to be significant “add ons” to the scope of the work in the project.

Electrical Wiring
If you are having central heating and AC installed into an existing structure for the first time, be sure to get info about wiring conditions.  This would be especially true for a older home or building with original wiring.  Essentially, you want to make sure that the wiring, connections, and circuit breakers, etc. can safely and efficiently handle the new load. If they cannot, you will experience circuit breakers tripping or perhaps much worse.  Because inadequate wiring will increase the cost of a job or might slow down the decision to buy a new system,  some equipment installers might be tempted to not bring it up at all. Or, they might focus the discussion on the new equipment first, get that signed, then bring up the wiring issue and cost.  This is also true for an older structure that already has central heat and air, but needs them replaced.

Ductwork
If your home or building already has ductwork, there are several parallels with electrical wiring to consider:

– The existing ductwork might be usable, OR it may need to replaced due to its structure, design or condition.

– Most potential issues can be seen ahead of time, but some could be discovered during installation of the new system.

– Project add-ons can be  awkward to negotiate or expensive to buy, because work has already begun.

The solution: Focus First on Getting High Quality Advice and Labor on the Installation
We rarely miss an opportunity to highlight the variable that matters most in heating and AC: the quality of the installation.  If you choose a dealer whose sales reps and technicians are trained, experienced and  ethical, dealing effectively with existing wiring or ductwork should be automatic. That way, you can be sure to get the right equipment for your situation and needs AND deal with potential variables in the original project scope.

If you and your contractor handle it well, getting a new system installed will be the start of a long-term relationship that includes preventative maintenance. There are also manufacturer and possibly installer warranties to consider, and those will be the topic of our next blog post.

If you find this useful, please share your thoughts and experiences with other reads. If not, let us know how we can improve.

Helpful Steps for Choosing a New Furnace or to Replace Your Central Heating System

What types of fuels or sources of heat are available to your home or building
Before spending too much time researching heating systems, you must determine which fuels or external heat sources are available to your home or building. This will provide the initial list of choices you have.  For example, if gas is not readily available, gas/electric dual fuel heat pumps are off the list.  Further, if surrounded by solid rock close to the earth’s surface, then you are much less likely to consider geothermal heating.

Your climate: number of days with high temperatures below freezing
If your location has many days of sub-freezing high temperatures, this will likely cause an all electric heat pump to be in auxiliary heat mode more than you would want. If the source of that auxiliary heat is strip heating (electricity) there may be better alternatives.

Type of construction of your home or building: basement, attic space and existing heating infrastructure
If your home or building has existing piping or ductwork already in a floor, basement or attic and it is in good condition, you will need to factor this in your decision.

We recently were told an account of a homeowner in Montana who had piping for radiant heating in their concrete slab.  The piping sprung a leak and, assuming it was all bad, the owner got bids to bypass the old piping and a new system.  A quick excavation revealed a nick in the old piping system that dated back to its installation, not degradation.  So, uncovering the cause saved an unnecessary expense.

If you are considering the re-use of existing ductwork, be sure that your price quotes or bids address the condition of the existing ducts.  Include interior condition as well as sealing against air leaks.

Forced air systems vs. radiant heat: personal comfort and preferences
Do you prefer warm or hot air blowing into your rooms from  a forced air system or gradual warming through radiant heat?  Within the blowing warm air category, if there is an all electric heat pump involved, the air that comes out of the vents into your rooms will not likely be as warm as the air from a gas furnace. If you are cold natured or have respiratory issues or allergies, these factors could also affect your decision.

Length of time you plan to own your home or building, if known
If you know you will be there many years, this could affect the type of system you select. Reason: a future owner might not place the same value on your type of new system as you do.  With fuel costs mostly going up,  a higher efficiency system is still recommended, though.

Training, experience and integrity of installation companies you are considering
As written elsewhere on our website, the quality of the installation of your furnace or heating system will likely prove to be a bigger variable to your indoor comfort and satisfaction than the brand of equipment  you select.  Go here to read a quick list of tips on how to select a heating and furnace contractor.

Four parts to the cost of ownership of the life of a system
Over the life of your new furnace or central heating system, there are four types of costs to consider. You can read our blog post in May 2008 to learn more details about these.

  • Initial cost of installed equipment
  • Energy efficiency: cost of fuel or energy to operate the system over the life of the system
  • Maintenance cost over the life of the system
  • Life span and replacement cost at end of life of system

We hope these tips will help you stay warm and enjoy lower energy usage and bills!  Please post your experiences.