Category Archives: Three Bids For AC Heating Replacement

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.

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.

Crowdsourcing re: How To Get Three Bids On A New AC & Heating System

We are seeking our reader input on the topic of getting three bids, proposals or price quotes on replacement AC and heating equipment.

Essentially, we want to hear your experiences on the two main ways to get bids: (a) contacting one company that has a contractor network and has three (or some predetermined number of) contractors to contact you, versus (b) selecting and contacting contractors directly yourself.

In addition to items you want to write about, we would like to know the following:

  • Who set the appointment?
  • What went well?
  • Where did problems arise?
  • Would you use the same process again?
  • What, if anything, would you do differently?

At the same time, we would like to hear your experiences how specific items that are not addressed or emphasized on many bid proposals can affect the outcome.  In particular, how the existing equipment such as ductwork, wiring, etc. was handled.

We look forward to hearing from you and helping others learn from what went well (or otherwise).