Signing a Remodeling Contract: What to expect

The Agreement

Even a small remodeling job requires a legally binding document that spells out the terms and conditions of your agreement. A professional remodeler will insist on a detailed, explicit document with all aspects of the project in writing. A fair contract addresses the concerns and interests of both parties.

Contract requirements vary from state to state. Even if your state does not require a written agreement for remodeling jobs. insist that your remodeler provide one and make sure that it clearly indicates what you  will get for your money. In addition, your agreement should include some or all of the following information:

Names of Property Owners and Remodeler. If you state or local jurisdiction requires licensing or registration, the remodeler's number should appear here.

Legal Description of Your Property. This description is usually found on the deed to your home.

Detailed Description of Project. The remodeler usually provides this description.

Items Incorporated by Reference. Examples may include specifications and the remodeler's warranty. To avoid confusion, a contract may also describe work that will not be done or that someone else will do.

Visual Representation. Examples include a blueprint, floor plan, or sketches that show what the remodlero will do and where. These documents, often incorporated by reference, illustrate various construction systems, such as foundation, framing, heating, air-conditioning, plumbing and electrical systems. The remodeler uses sketches and drawings to obtain a building permit and guide the project.
When the remodeler provides the drawings, typically he or she owns the copyright. Another party cannot use these copyright documents to build your job or to remodel another home without permission from the remodeler.

Project Timetable. This section includes estimated start and completion dates. Your remodeler may add language that stipulates conditions, such as adverse weather, that would require an extension of the completion date.

Price and Payment Schedule. Remodeling work can be priced several ways. Whichever way your remodeler prices your job, be sure you understand when payments are due. You make these payments (sometimes called draws) to the remodler during construction according to a payment schedule that you both agree upon. The payment schedule indicates how much you must pay at the start of and at specific intervals during the project. Ask your remodeler to carefully explain the price and payment schedule in your contract before you sign it. The agreement should mention any deposits you may have already made (for an estimate, sketches or drawings) if the remodeler plans to apply those deposits to your total payment.

Expect to make payments when you:

• Sign the contract (the amount of down payment varies widely depending upon state law and the project's size, type and duration).
• Receive a regular invoice weekly, monthly, or at milestones (such as when framing begins or the project is under roof).
• Sign a change order
• Order a custom-made item (suck as a stained-glass window, cabinets or a lighting fixture).

In addition, your remodler will expect the final payment upon substantial completion (for example, when you receive the certificate of occupancy, when you occupy or use the space, or when some other identifiable event occurs). The contract should make clear when substantial completion will occur.

If you are financing the project with a loan, be sure that the loan disbursement schedule matches your remodeler's billing intervals. Regardless of the source of the funds for the project, be prepared to pay on time. Withholding payment, other than permitted by agreement, undermines mutual trust and could delay completion of the job.


Specifications.
In addition to any drawings and blueprints, many remodelers list all products and materials included in your project. The description of each item should provide enough detail to clearly identify it, such as brand name, model number, color and size. This section also may describe any materials to be selected later who will choose them, and the amount of money (called and allowance) set aside to pay for each item.

READY TO SIGN? STOP AND READ AGAIN
After you have read your contract and asked your remodeler to clarify any wording that you do not understand, read the document again. Use the checklist below to make certain you have all necessary information before signing the contract:

• Your remodeler's name, address and business phone number.
• Approximate start and finish dates.
• The method, amount and schedule of payments.
• Written specifications of design and product details.
• Provide a system to handle changes?
• You lien rights, dispute resolution and remodeler's warranty.
• You have 72 hours to cancel the contract, if applicable.

Professional remodlers will appreciate the opportunity to answer any questions you may have. If you still have questions about the responsibilities after meeting with your remodeler to review the agreement, discuss them with your attorney. After you address these questions, you are ready to sign and date the contract.

Partnership
Your contract is just one aspect of the partnership between you and your remodler. It is a critical communications tool, but it should not take the place of ongoing dialogue. Your contract helps both you and your remodeler navigate to your goal- mutual satisfaction with the completed project.