Any major home remodeling project will require attention to detail and a lot of planning from a homeowner and his or her contractor, but you might wonder whether a home remodeling contract is necessary for every project.
According to the Contractors State License Board (CSLB) in California, any project that costs more than $500 requires a contract. The contract is also meant to be easy to understand with information on the overall parameters of the job. The contract should also include information on what the consumer or contractor can do to cancel or rescind the contract.
The CSLB shares that a contract is...
“...a legal agreement between two or more people. A written agreement is one of the most important communication tools for both the contractor and the consumer. It helps avoid misunderstandings about what a job will include. A thorough contract tells how the work will be done, when it will be done, what materials will be used, and how much it will cost.”
Here are a few items that should be in the contract.
List of Materials – The contractor will provide a list of materials he or she will use for the project, and those materials might include standard items where the homeowner might not have any input, as well as items where the homeowner has indicated a preference for a particular manufacturer or type of item.
Payment Schedule – A home remodeling contract will include a list of the dates when payments are due to the contractor. Some contracts may specify payment is due in full before work begins, and other contracts may require a partial payment at the start of the project and further payments throughout the project’s timeline.
Project Schedule – There is always the chance that a project may run longer than expected but the project schedule should offer a reasonable estimate of how long it will take to complete the work.
Change Orders – Whenever a change needs to be made to the contract for things like updates to the price or the overall scope of work, it’s necessary to create a change order, which is an addition to the contract that must be signed by the contractor and the homeowner. The change order is added to the overall contract after it is signed.
Contracts should also feature details like the contractor’s insurance and license, as well as areas for signatures for the contractor and the client. According to Money:
“A contract isn’t a binding legal document unless it’s signed by both parties—and in some states, it also must include the contractor’s license number and both of your addresses.”
There are some home remodeling experts that actually recommend that a lawyer looks at the contract or writes it, but it’s not absolutely necessary to hire an attorney for that purpose. However, it is within your rights as a homeowner to request that a third party examine the contract if you think that step is necessary before work begins.
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