Homeowners should never remodel their homes without first signing a home improvement contract. But, it’s not wise to sign on the dotted line without carefully reviewing the terms and conditions of the agreement.
What should you look for? What mistakes do you need to avoid? Here are the do’s and don’ts of home improvement contracts:
Do: Include A Detailed Job Description
A remodeling contract should contain a detailed description of the project. This description should answer these questions:
- What changes are being made?
- What materials will be used?
- What permits are needed?
- Who will obtain the permits?
- What will be demolished?
- Who will remove the debris at the end of the project?
The answers to these questions should be as detailed as possible. For example, let’s say you are installing granite countertops in your kitchen. The materials for this project should state the exact color and type of granite that is being installed and an estimate of how much of this material is needed.
If the description simply said “granite,” the contractor could choose whatever granite he wanted without violating the agreement.
Don’t: Forget to Set Deadlines
Many homeowners grow frustrated with their contractor because the remodel takes much longer to complete than they expected. Avoid this problem by including a start and completion date within the contract.
The contract should also outline the penalties that the contractor will face for missing the agreed upon deadline. But, you must be willing to make exceptions for reasonable and necessary delays.
For example, the contractor should not be penalized for missing a deadline because you wanted him to place a special order for custom material. However, if the contractor misses a deadline because he failed to show up to work for a week, he should be penalized.
Do: Plan Ahead For Potential Changes
You may need to make last minute changes to your plans in the middle of the remodeling project. Make sure your contract outlines the procedure for requesting and approving these changes.
For example, the contractor might find a hidden plumbing leak after he demolishes your bathroom. Fixing the leak was not part of the original contract, but it needs to be repaired to prevent further damage. The contract should outline how the contractor should notify you of this change request and what you must do to approve it.
If you don’t plan for potential changes, the contractor could make a number of unauthorized changes to your remodel project. You may not be happy with the way the unauthorized changes look or how much they cost. Protect yourself—and your wallet—by including this information in your home improvement contract.
Don’t: Pay Everything Upfront
The contract should include payment terms that outline the total cost of the project and the payment dates. Do not sign a contract that says you must pay the full amount owed to the contractor upfront.
If you pay everything upfront, the contractor has no reason to return to your home and actually complete the work. It’s best to pay between 10-30% of the total job upfront. Make another payment about halfway through the project, and the final payment once the job has been completed.
Do: Include A Termination Clause
It’s in your best interest to include a termination clause within the contract as well. This clause outlines when either the homeowner or contractor are allowed to terminate the contract without facing legal penalties.
Including a termination clause allows you to quickly end your relationship with a contractor who is just not working out. If you forget to include this term, you could end up getting stuck with a contractor who you are not satisfied with.
Transforming Your Home With A Simple Home Improvement Contract
Many homeowners think remodeling is stressful, but it doesn’t have to be a headache. Follow these do’s and don’ts to protect your finances, prevent legal disputes, and ensure your remodel goes as smoothly as possible!