Best Practices Before Signing a Home Renovation Contract

Your dream home renovation is about to become a reality.  You have worked through all the various options and materials.  You have finalized the layouts of the new space. And you have engaged a contractor you trust to complete the work.  

Now what?  

The most important part of this process is about to start, the execution of the contract.  Before signing a home renovation contract, it’s crucial for you to fully understand the home renovation best practices.

What does it include? But almost as importantly – what’s not included.  Having clear expectations defined in the contract will help you and protect your interests, as a homeowner.  Following home renovation best practices will ensure a smoother process.

 Here are some contract essentials to ensure your next project is off to a good start:

1.  Do digital signatures govern the agreement? 

 Does email communication comply with written notices?  Can we text one another changes?  Make sure that you set these parameters on how and when communication can occur.

2.  You MUST have a clear and detailed scope of work

Ensure that the contract outlines each and every detail of the project, including materials, finishes, and timelines.  What walls are getting painted? How many coats of paint will be used?  What brand of paint?  What sheen?  Will the sheen in the bathroom be different than in the hallways?  Should they be different? 

Avoid Ambiguity at all costs and use precise language to prevent misunderstandings.  You will also want to understand how changes to the scope will be handled and how they will affect the cost or timeline.

3. Exclusions

While every contract will include what is being done, the and scope of work, few contracts include things that explicitly are not part of the contract.

For instance, maybe you are doing an exterior renovation to your home. That will not affect a detached garage that is on the same property, built beside the home being renovated. 

If no work whatsoever is being done to the detached garage, the exclusions section should spell this out.  Otherwise, the painting crew mistakenly think the entire exterior of the home and detached garage are to be painted. 

Properly identified exclusions should also shine a light on things that are be mistaken to be “part of the project”. In fact, there are no costs considered in the overall contract price for these items.

4.  Payment Schedule

Agree on a payment (draw) schedule that aligns with project milestones. Have a percentage of the final payment (balance) should be held until a final walk-through occurs.

Also, all work should be completed and signed off.  We like to have progress payments for items before they occur, such as before drywall and before painting. Will interest accrue on late payments?  What is that rate?

5.  Timeline

Make sure that your contractor is willing to establish clear deadlines for project completion. 

There will always be adjustments that have to be made throughout a job. However, a contractor should be able to show you the upcoming few weeks of a schedule.

Understanding the design process with New Beginnings Construction:

6.  Insurance and Permits

• Verify that the contractor has adequate general liability and workers’ compensation insurance. They should be willing to provide you with this certificate.
• Check to see if the contractor is licensed in your state and carries both liability insurance and workers’ compensation. This protects you in case of damage or injury during the project.
• Check references, read online reviews, and ask for examples of completed projects.  Their website is a great place to find these reviews.

7.  Workmanship Warranty:

Ensure the contract includes a warranty for workmanship, typically ranging from 1 to 5 years, depending on the work. 

Confirm that warranties for materials are transferred to you and properly documented. You will also want to know what the process is to cure any defects within the warranty period.   

Are you required to provide the Contractor with an opportunity to inspect?

An opportunity to either cure the defect in a manner customary in the industry or pay for a third party to make the repair?

8.  Change Order Process 

(Written Changes Only)

Any changes to the scope of work should be documented in a written change order with new costs and timelines. Include an approval process for any changes to prevent unauthorized modifications or charges.

9.  Dispute Resolution

Arbitration or Mediation: Include a clause that outlines the method for resolving disputes.

Arbitration or mediation helps to avoid costly litigation.  Depending on the extent of the project, hiring an attorney to review the contract can be a worthwhile investment. 

Is there an Attorney’s Fees provision in the agreement?  What county and state are the governing venue for a dispute?

10.  Contractor’s Liabilities

Confirm that the contractor is responsible for site cleanup and disposal of debris from the job site.

11. Final Inspection and Payment

Ensure a final walk-through is part of the contract before making the final payment. Don’t sign off or make final payment until all work is completed to your satisfaction. See that all punch list items are addressed.

In conclusion, the home renovation contract is not just a scope of work with a price. It should act as the foundation of your entire project.

Every detail, from the scope of work to the payment schedule, need to be clearly outlined. This ensures both you and your contractor are on the same page. Overlooking what is and isn’t in the home renovation contract can lead to misunderstandings, delays, or even costly disputes. 

As a homeowner, you owe it to yourself to carefully review and understand every term before signing. A well-drafted contract protects your investment, and sets the stage for a successful and stress-free home renovation. Don’t leave anything to chance—your dream home deserves the attention to detail that only a solid contract can provide.

Navigating storm damage repairs and insurance claims can be challenging, but with careful planning and research, you can ensure that your home is restored properly. If you have any questions or need further assistance, feel free to reach out to us.

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