Brad McRae Blog

For years I have been meaning to write a newsletter on negotiating with contractors, however, since I didn’t do it well myself, I procrastinated. I have also had many people in my negotiation classes over the past 25 years tell me their horror stories and now I have one of my own. Let me describe the problem I am currently having and what I have now learned on how to prevent it and future problems for both contractors and clients.

My current problem is that I had 10 new windows installed in my house. In particular, I needed the windows in the bedroom to be much quieter as I live on a busy and noisy street, across the street from a university residence, plus it’s on a bus route and the buses turn while going uphill in front of my house, so I am sure that you can imagine how noisy it gets.

The installer stated in writing that “upgrading your windows will make a huge difference for you in everything from road noise to ventilation to energy efficiency.” I did notice a huge difference ─ the new windows were much noisier than the windows they replaced. The installer said that for the new windows to be noisier would defy the laws of physics. I realized that in this statement he had given me a “gift.” I now knew that I needed to use the laws of physics to make my case. Since we had identical windows downstairs in the living room that were not replaced, I bought a decibel reader and asked my daughter, who is a physics major, to do a test. The result was that the noise from the new upstairs windows were statistically significantly noisier than the old windows downstairs.

Instead of trying to resolve the problem, the contractor took out a lien on my house. Now both sides are paying lawyers and at the present time it is a lose-lose negotiation. I haven’t paid the contractor the outstanding balance on the windows and have definitely recommended to a significant number of people not to use said contractor. In the mean time I am living with noisy windows that are covered in blankets to help keep out the sound.

In an effort to use the best objective criteria possible, I then hired a sound expert and asked him to tell me what he thought “a huge difference” in noise level would translate into and he said that in his professional option, “a huge difference” would translate into windows that would reduce the noise level by half, which using the decibel reader that I purchased clearly did not happen.

We now have to wait for the supreme court of Nova Scotia to rule on the lien and then go to small claims court. All in all this has been a colossal waste of time, money and effort.

In my research I found a sample renovation contract that is published by the Canadian Mortgage and Housing Corporation. Had we used such a contract it is very likely that we would not be in our current deadlock as both the contractor’s and the client’s expectations would have been clearly articulated in writing. This contract has specific descriptions of what the work includes and does NOT include, terms of payment, the cost of extras, drafting a change in work order, standards of work warranty, insurance, dispute resolution, etc. For example, the parties would agree in advance “on a process to deal with possible disagreement down the road… Depending on the problem, the arbitrator might be a certified home inspector, an engineer or anyone else with the required expertise and neutrality.” (p. 11 of the sample renovation contract.)

In addition to the sample contract, the CHMC also has the following free publications:

Hiring a Contractor
Canada’s Construction System
Before You Start a New Addition
Before You Start Renovating Your Kitchen
Before You Start Renovating Your Bathroom
Before You Start Window and Door Renovations
Before You Start Renovating Your Basement ─ Moisture Problems
Before You Start Renovating Your Basement ─ Structural Issues and Soil Conditions
Renovating Your Basement for Liveability

There is also a priced publication: Healthy Housing™ Renovation Planner which you can purchase at www.cmhc.ca.

Using the CMHC or a similar contract will make it much less likely that there will be problems for both the client and the contractor. And if there is a problem, you have already agreed on a process to deal with it in a way that is much less costly in terms of time, effort and money, than going to court. And if you do have to go to court, each party’s expectations will have already been stated in writing and the scope of the dispute will also be more likely to be smaller rather than larger.

If you have any hints about negotiating with contractors, negotiating with clients or for clients negotiating with contractors, please feel free to pass them along at Brad@BradMcRae.com

The book, The Extraordinary Leader is not based on a fad or someone’s ideas of what makes a great leader. Refreshingly, it is based on some of the best research available and solid data. The research demonstrates that extraordinary leaders (leaders who are rated at the 90% percentile and above) have documented characteristics in common. One of the most important of these characteristics is that they are likely to have multiple areas of strength where they have developed outstanding competence (See Figure 1-1).

Figure 1-1 Average Percentile with up to 5 Strengths

They also treat others differently, in fact, they are more likely to give positive feedback in a ratio of 5 positives to every negative.

The research speaks for itself. Organizations with Extraordinary Leaders are significantly more profitable, use multiple competencies simultaneously (such as driving for results and building relationships), have greater employee commitment and are much more likely to retain their key talent (See Figure 1-2).

Figure 1-2 Net Profit

Figure 1-3 demonstrates how two skill sets interact synergistically. It would be interesting and informative to turn these results into a survey question as to how your organization’s employees see their leaders, managers, and indeed the organization as a whole, on each of these two scales independently and combined.

Figure 1-3 Percentage of Leaders at the 90th Percentile

To summarize, Extraordinary Leaders need to develop exceptional skill sets (competencies) in multiple areas and be able to use them almost simultaneously. In order to solve and resolve today’s and tomorrow’s complex problems, leaders have to be able to effectively lead, motivate and inspire others, build synergistic teams, present, communicate, negotiate, resolve conflict, develop consensus, and ensure outstanding customer service.

At The Atlantic Leadership Development Institute we offer certificate programs that help our participants develop multiple skills – in addition to teaching people individual skill sets. Our certificate programs are not, like most programs, certificates of attendance. Our students have to integrate and apply selected readings and write about what they have learned. This reflection insures that real transferable learning takes place. For example in the Negotiation and Conflict Resolution Programs, the participants have to fill out The Master Negotiator’s Preparation Form using The Master Negotiator’s Digital Coach three times and submit the results to the program instructor. As one participant said, “I thought I understood how it worked and filling in the form three times, helped me to really understand and apply what I had learned. However, when I received constructive feedback from the program instructor on what I did well and what I needed to improve, it increased my knowledge and level of understanding by 100% ─ this is something that would never have happened in a regular course.”

Reference: Zenger, H. H. & Folkman J.R. (2009). The extraordinary leader: Turning good managers into great leaders. NY: McGraw-Hill.

Negotiating with Contractors: Helping You Do It Well

Become an Extraordinary Leader

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