Part 3: What Should Be In a Good Remodeling Contract?

 Many homeowners ask, “What should be in a good remodeling contract?” The simple answer is that a good contract should contain everything necessary to describe the project, the materials, the quality of workmanship, and the construction period for the job. A good contract will also contain all other agreements made between contractor and homeowner that will protect both homeowner and contractor, and outline how changes and disagreements will be handled.

A good remodeling contract will include all of the following information:

· Complete information about the contractor, including name, address, telephone number(s), license number, email address.

· A summary of the work the contractor will do. This should clearly outline the scope of the project and what portion of it the contractor will do, if not all.

· A summary of what the contractor will not do, if anything. This might list any work the homeowner has chosen to do, whether or not the contractor will be expected to deal with any unexpected problems after work begins, whether the contractor is to install appliances, and the like.

· All materials that will be used in the project, including the details of size, color, specifications, model numbers, manufacturer, and material quality, relative to such materials as lumber, drywall, etc. There should also be a complete list of all fixtures, fittings, etc. and their appropriate finish.

· A set of dated copies of all drawings and diagrams, sketches and blueprints. If any changes will be made during the project, they should also be made to the drawings. The changes should then be initialed and dated by both you and the contractor.

· Start and finish dates. Any bonus offered by the homeowner for completing work early.

· Work schedule: days of the week when work will be done and start and finish times each day

· How changes will be handled. Always use a written change order that includes the additional cost of the change. The change order should be initialed and dated by contractor and homeowner.

· A one-year warranty on materials and work.

· A statement of how disagreements will be handled. This will likely be a binding arbitration clause.

· A statement of how the contract can be cancelled.

· A statement that the contractor will provide affidavits of final release, final payment or final lien waver from all subcontractors and suppliers.

· Specific and detailed payment terms and dates.

· Statement of who will be responsible for obtaining any necessary permits and inspections.

· Statement of who will be responsible for removing trash from the site.

Your contract should also include these clauses:

· An assignment clause (preventing the contractor from transferring the project to another contractor without the homeowner’s permission).

· A capacity/independent contractor clause (acknowledging that the contractor is not an employee of the homeowner).

· An entire agreement clause (a statement that all the terms to be considered have been included in the contract).

· Legal expenses.

· Return of property notice.

· Arbitration provision.

· Notation of the laws of the state that will be applicable for the agreement.

· Limits of the validity of the agreement

Be sure to tell a friend about this site and the fact that they can learn to manage a construction business themself, plus learn how to make simple repairs around their own home.

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