How To Make Sure Your Remodeling Contract

Won’t Leave You Disgusted, Bewildered and Broke

                                                                                              by Jeff Bloch

 

We’ve all heard remodeling horror stories from homeowners who’ve had bad experiences with contractors.  The fact is that the number one cause of these problems is a poorly written contract.  If your remodeling contract is poorly constructed, chances are you can expect the same result for your project.

You Can Protect Yourself

Here’s how to protect yourself.  Make sure the contractor puts everything in writing.  Don’t settle for a one-page document that leaves plenty of room for add on charges or (worse yet) for a verbal agreement and a handshake.  A good contract will clearly detail every aspect of the remodeling job and should be fair to both parties.  Here is what your contact should include:

 

What Your Contract Should Include

·        Contact Information- The contractor should state his name, address and telephone number.

 

·        Location Address- The contract should also include your address.  If the work is to be completed on a home that has not yet been built, be sure to include the lot number.

 

·        Right of Recession- You have the right to cancel the contract within three business days with no penalty, as long as it has not been signed at the contractor’s place of business.  By law, no work can begin until those three days are up.

 

·        Project Description- This is usually a simple paragraph that gives you a thorough description of the project. 

 

·        Detailed Plans- Renderings by your architect or designer giving a detailed layout of all equipment, cabinets, countertops and fixtures.  It should be signed by you.

 

·        Detailed Description of Materials- State exact specifications on all cabinets, countertops and fixtures, including the make and model numbers as appropriate.  Also, make sure it includes a phrase like, “new materials unless otherwise specified.” so that the contractor cannot substitute used materials.

 

·        Building Permits- It should be stated in the contract that the contractor is responsible for getting all required building permits.  (Note: Never sign the building permits yourself or else you will be held responsible if there is a problem.)

 

·        Licenses & Insurance- Include the contractor’s license number as well as a statement of proof that he has both workman’s compensation and general liability insurance coverage.

 

·        Lien Protection- The contractor should include language that states the homeowner will not be held responsible if the subcontractors are not paid.

 

·        Your Work Contributions- If you, the homeowner, are performing any of the work, then that should be detailed in writing as well.

 

·        Time of Performance- This is a job completion timeframe that requires a specific start date and a date by which all work will be completed.  Penalties and/or bonuses could also be added for late/early completion of the work.

 

·        Personal Property Protection- If the contractor or one of his subcontractors damages any of your personal property, there should be something in writing that details how you will be compensated for the loss. 

 

·        Cleanup Schedule- Insist upon a daily cleanup of the project site and a detailed description of what cleanup entails when the project has been completed.

 

·        Warranties- Warranties are usually for a minimum of 1 year for all materials and workmanship, although some manufacturer warranties provide extended coverage.  Make sure your contract includes the name and address of all companies that will honor the warranties.

 

·        Dispute Resolution- Many contracts are now including clauses that detail how disputes will be resolved.  Often the dispute is handled by a mutually agreed upon mediator.

Price And Payment Schedules

Your contract should include the total price of the remodeling project, as well as the payment schedule and cancellation fee.  Here are some additional things to consider:

·        Don’t pay more than one third of the total bill before the project has started.

·        Typically there is a minimum of three installments.  The first payment is due before the work has begun.  The second payment is usually due at some agreed upon point in time, when a significant portion of the project has been completed.  The final payment is due upon completion of the project.

·        Tie payments to milestones, not to time periods

·        Never give the contractor a final check until all work has been completed to your satisfaction.  Otherwise you’ll lose all your leverage.

 

Jeff Bloch is the Senior Design Coordinator and project manager for Accutech Restoration & Remodeling.