Many of us have become used to signing contracts without really understanding the repercussions, and this can be a major mistake when it comes to large home improvement projects. A shoddy or incomplete contract could result in a major financial disaster that leaves a homeowner struggling with legal fees, repair costs, and a home that is in shambles. For those that are getting ready for their next remodeling project, here are five things to think about before signing the contract.
1. A Firm or Open-Ended Completion Date?
Many of the problems that take place during a home remodeling project come down to the completion date. Families want the project to be finished as quickly as possible, but small problems can happen at any point. Homeowners need to decide if they would like a firm completion date or an open-ended completion date with a loose timeline. If the project has a firm completion date and the work is not done at that time, then the contractor may be required to pay penalties depending on the details of the contract. Please note that having a firm completion date must also take into consideration any change -orders that may arise during the scope of the project.
2. Outline Your Payment Schedule
The final price for the work must be as clear as possible and should encompass any mishaps or accidents that happen to occur. First, the homeowner will need to decide if the money will be paid beforehand, in increments, or upon completion of the work. Many contractors ask for at least a small deposit to cover the initial material costs. After that, the homeowner can then pay them in increments or once the work is completely done. Either way, make sure that both you and the contractor understand the payment schedule.
3. Who Has Access to Your Property?
Almost every contractor will have a different answer when asked about which parties will be on the property on any given day. Some hire outside contractors for specific services while others have a more comprehensive team. This is an important component of the contract for two reasons: the first reason is that families should feel safe with anyone that is on their property at any time. The second reason is to ensure that all workers are covered by the primary contractor’s license and insurance policies.
4. Time and Materials vs. Fixed-Price Contract
Another major decision is if the contract will have a fixed price or a time and materials clause. A fixed-price contract explains exactly how much the project will cost including all labor, materials, permits, and any other expenses that come up. If the project goes over that amount, then the contractor will be obligated to cover the difference. A time and materials contract will be calculated at the end of the project. These contracts can be cheaper, but they also come with more risks for the homeowner.
5. Create a Termination Clause
It is important that all parties involved have a way to terminate the contract without any penalties if any major issues come up. Both the contractor and their clients should insist that there is a termination clause for issues such as gross negligence. Some of the variables that can be added to a termination cause include missed payments, working behind schedule, unsafe work practices, or failure to communicate within a certain period of time.
Remodeling projects and home upgrades are an excellent way to improve the value, livability, and aesthetics of your property. Creating an airtight contract will ensure that these projects are done quickly, correctly, and stay within budget. If you would like advice on the contract you have been given by your contractor, give us a call and we will be happy to take a look.
