Even if you find a stellar home improvement company, you need to get in writing a firm agreement that specifies several terms.
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Do not assume that even an airtight contract will protect you from the misery of working with a lousy contractor. No legal document can squeeze good work out of bad-faith actors and unskilled workers. But by putting in writing all the details of your job, plus a few other clauses, you can eliminate common sources of disputes.
Here are points to include in a contract for a medium-size or major project; but even if your project is small, many of these points also apply.
⋅ Get the contact information for all parties involved, including names, addresses and phone numbers, plus the company’s license number.
⋅ Include who will do what. Specify who will perform various aspects of the job and that the company is solely responsible for managing subcontractors.
⋅ Get a detailed job description. Either include a list of tasks or refer to plans and drawings. If you’re hiring an architect or designer to monitor all or part of the project, that relationship should be described.
Stipulate that all building products and materials be new; comply with all relevant laws, regulations and codes; and are covered by applicable manufacturers’ warranties. If you’re supplying appliances or some materials, list them. For millwork, hardware and other finishes, require that the remodeler provide samples for your review and approval before purchasing or fabricating the items.
⋅ Include price and payment terms. Get detailed, fixed prices for all elements of the job.
Try to minimize the down payment and maximize the final payment. The more you can withhold until the end, the more leverage you’ll have to make sure the job is done well and according to your agreement. Avoid companies that require large upfront deposits.
For most major remodeling jobs, payment is made in stages as chunks of work are completed or before large orders are placed. For example, a contract might require five payments: a 10 percent upfront deposit, a 30 percent payment after demolition and framing; a 30 percent payment after installation of drywall, windows, doors and sub-flooring; a 20 percent payment after finish work; and a final 10 percent payment after all facets of the job are complete. If you’re financing the work via a home-equity loan, most lenders won’t release funds until they know a stage has been completed satisfactorily.
Try to include language in the contract that holds back a percentage of the total price, called a “retainage,” until you’re sure the work was done well. A 10 percent retainage is common.
If the company accepts credit cards, consider charging all or parts of your job. If there is a problem, you can dispute the transaction with your credit card company.
⋅ Insist on quality standards. To protect against an obviously substandard job, include a catchall phrase that the contractor will complete the project in a professional manner and that the work will comply with applicable building codes and regulations.
⋅ Include warranties and guarantees. Provide a clause stating that the labor and materials the remodeler uses will be free of defects for a certain period of time after the job is complete, and that repairs or other work to correct flaws will be performed for free. One- or two-year warranties are common but push for the longest warranty you can get.
⋅ Spell out how you can make changes. Include provisions for handling unanticipated or unplanned changes — and that you and the contractor will describe the change exactly, agree on a price and incorporate the change into the overall contract.
⋅ Include start and completion dates. Request a firm start date. The completion date probably will be an estimate. To protect your right to cancel the contract in the event of unreasonably long delays, include this phrase: “Starting and completion dates are of the essence of the contract.”
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⋅ Require that work be continuous. Some contractors start off with a bang and bring a full crew that swarms over the work area — for the first day or two. Then, for all sorts of reasons (mainly juggling other jobs), there may be days with little or no activity on-site. Minimize these delays by specifying who will be on the job and that, weather permitting, work will be continuous.
⋅ Address lead paint testing and abatement. The U.S. Environmental Protection Agency (EPA) requires contractors working in pre-1978 homes to be lead-safe certified. Even very small projects are covered by the law. If your home was built before 1978, include this statement: “Contractor and all subcontractors will follow EPA regulations for testing for lead-based paint and, if detected, taking required steps to contain the work area and minimizing the generation of lead-paint dust.”
⋅ Include indemnification and waiver of customer liability. Your contract should “hold you harmless” and protect you against claims, costs and attorney’s fees stemming from the contractor’s work.
⋅ Insist that permits and approvals be taken care of. The contractor should determine necessary permits, apply and pay for them and arrange for government inspections, if required. The contractor also should obtain approvals by a homeowners’ association or historic district, if required.
⋅ Include lien releases and waivers of liens. In the remodeling business, liens are a kind of currency. They’re routinely taken out against property owners by subcontractors, building material dealers, even individual laborers to protect against not getting paid.
Add this clause: “Prior to each payment, contractor must provide homeowner with lien releases covering work to which the payment applies. Each release must state the name of the company or individual making the release; the releasing party’s address, materials or services supplied; the amount the contractor has paid for these supplies or materials; and the homeowner’s address.”
⋅ Setting jobsite rules. Get a definition of the workday: when it begins, when it ends. Contractors should agree to clean all debris from the jobsite and leave all appliances and household facilities in good working order at the end of each day (with the exception of those items that are actually part of the project, and they should be noted). Stipulate that loud or otherwise disruptive work be confined to certain hours.
Note that you get to say when the job is over.
Kevin Brasler is executive editor of Washington Consumers’ Checkbook magazine and Checkbook.org, a nonprofit with a mission to help consumers get the best service and lowest prices. It is supported by consumers and takes no money from the service providers it evaluates. You can access Checkbook’s unbiased ratings of local general contractors free until Oct. 1 at Checkbook.org/WashingtonPost/remodeling.