So, you finally decided to remodel your house – that’s great, but have you thought about the written contract?
For any significant home renovation, I always recommend homeowners to craft a written contract – a sort of official agreement between a homeowner and a contractor. So, here are some helpful tips you might need.
Using a Computer, Type the Contract
Contracts should never be handwritten; they should always be typed. This prevents ambiguities from arising as a result of sloppy penmanship interpretation. If you’re using a pre-made contract template, use a heavy black pen or marker to strike through any unused areas.
Create an Introduction
This should include the contractor’s name, the name of the company (if they are different), and the type of usiness the contractor is (corporation, LLC, partnership, etc.). Include the contractor’s company name, address, phone number, employer identification number, and, if applicable, builder’s license number. If you intend to refer to the contractor as “contractor” throughout the contract, state so in the introduction.
Include the homeowner’s name and contact information. Contact information for the homeowner, as well as how the owner will be referred to throughout the contract – for example, “owner” – should be provided.
Describe the Work to Be Done in General Terms
Explain the project in general terms. “Install new countertops,” for example, or “add and paint a deck.” This section of the contract should be specific enough to explain what is being done, but not so specific that it does not cover unforeseen contingencies. Details about the roof/attic construction.
Include an Estimate of the Project’s Timeline
Set a start and end date for all projects, as well as target completion dates for key phases of the work. You should also explain what will happen if the project runs over its deadline. You should go into more detail about this. It makes no sense to impose the same penalty for a rain delay as for a contractor error.
Specify the Materials to Be Used
This is one of the places where you should be as specific as possible. Many a contractor has had a disagreement with a homeowner because the contractor believes the materials he is using are equivalent to the original, but the homeowner disagrees. Describe any and all materials used in the project, including the material, manufacturer, item number, and quantity. Make a plan for what to do if you can’t get your hands on the materials you need.
Determine Who Will Obtain Licenses and Permits
Permits and licenses are required in most jurisdictions for any moderate to large-scale renovation project. Determine ahead of time who will be in charge of obtaining those licenses and permits. Ascertain that the contractor accepts responsibility for any violations of building codes and zoning laws.
Come To an Agreement on How to Use the Property
Employees must eat, park, and use the restroom. Decide ahead of time what can and cannot be done on the premises, including clean-up procedures and times.
Make a Decision on What Is Guaranteed and Warranted
Warranties and guarantees are two of the most important details to address. This usually comes down to deciding what will happen if the contractor’s work fails, whether minor or major. Determine the duration and scope of his liability.
Establish a Procedure for Contract Amendments
This does not have to be complicated, but it should be documented. A standard and usually sufficient agreement are to have all agreements in writing.
Indicate the Total Cost of the Project
The total agreed-upon price for the home improvement project should be specified clearly. If the project is billed on a time-and-materials basis, the hourly rates should be specified. This section should also include any other provisions, such as a guaranteed maximum price.
Make a Payment Schedule
In the contract, specify when the homeowner will pay the contractor. Depending on the size of the project, this could be a small down payment followed by the remaining balance at the end of the project, or a steady installment plan based on project progress. Smaller projects may include a clause stating that the contractor will be paid in full upon completion of all work.