While there are certain implied warranties of quality in home remodeling projects, the relationship between the contractor and the homeowner is captured in a remodeling contract. The contract should be in writing so that there is clear evidence in case of a dispute. So, what should be in home renovations contracts?
Project Description
The contract should, in details, describe what the project is. It should detail the materials to be used, if demolition is included, whose responsibility it is to clear the debris, and the fixtures to be used, among other details. It should also describe that the contractor is responsible for obtaining all the relevant permits and that the project is covered by the contractor’s workman’s compensation insurance and liability.
How, How Often, and How Much the Contractor will be Paid
The contract should detail how much the contractor will be paid. It should also state the timing of the payments and the amount to be paid in each installment. Most people structure their payments based on project milestones (such as after the foundation is done, after completion of plumbing and electricity, and so on). Pay the contractor no more than 10% of the project cost. If the materials and other supplies are needed at the start of the project, offer to pay the suppliers directly. Retain the last 10% until the finer details of the project have been satisfactorily completed.
Approximate Project Start and Completion Dates
Whereas it is not always possible to determine the exact date the project will start, leave alone end (due to weather, major plan change, and other unforeseeable factors), the contract should detail an approximation of these dates. The point of this is not to hold the contractor to these exact dates, but to ensure both parties have a general understanding of timelines. The contract should also detail penalties for missed timelines.
Lien Waivers
There is always a risk that a worker to works in the remodeling crew could place a lien on your house and claim he/she was not paid for the work, even if you paid the contractor in full. You should, therefore, detail in the contract that you expect a “lien waiver” from the contractor for each installment before the next installment payment. This is basically a signed statement indicating that the contractor used your previous invoice to pay for labor and materials detailed on the invoice.
Procedure for Change
Write in the contract that the contractor cannot make changes to the original plan until he has described in details the new work, its cost, and how it will affect the schedule – and until you have agreed to the change in writing. All change orders in home renovations should be made in writing, or at least by email or text.
Escape Clause
There should be an escape clause, giving you the flexibility to rescind the contract with no penalty. This will ensure you do not lose your deposit.
Arbitration Options
The contract should detail who the arbitrator will be in case of a dispute. Lack of this means the dispute may end up in front of a judge.
At Kitchen & Bath, we undertake to project with maximum professionalism and to abide by the contract we enter into with you. You can reach us today at (647)697-7725.
