What Should Be Included in a Remodeling Contract?

When you hire a custom home remodeler to help you upgrade your space in Northern Illinois, part of that process includes signing a residential contractor contract containing pertinent project details agreed upon by both parties.

The remodeling contract serves as a point of reference for the duration of the project and establishes parameters to keep everyone on the same page. When executed properly, it should help set reasonable expectations and provide protection for both you and your remodeling contractor.

Because the contract serves such a vital role in creating a smooth, efficient renovation process, you want to make sure you get it right before you sign.

Remodeling contract

Developing a Home Improvement Contract

In the most basic sense, your remodeling contract should include a project description that thoroughly outlines the scope of work to be completed, along with what materials and products will go into the job. Your home remodeler likely has a basic template they use and they’ll provide you with a copy of your contract before the construction phase. However, you are also free to suggest changes and to have a lawyer look over the document before you sign. In general, here are a few vital components that every remodel contract should have:

1. A Project Description

First, your home remodeling contract should include a detailed description of what specific projects will get done during the process of your kitchen renovation or whole home makeover. That includes an outline of what will be demolished; what will be constructed or replaced; and each different product, material and fixture that will be used, along with its associated cost. Additionally, the contract should clearly state what other services the contractor provides, such as disposing of the debris properly or obtaining the necessary permits. Along with the scope of work, the contract should clearly state the project is covered by the remodeler’s liability and workman’s compensation insurance and include proof of licensure, insurance and bonding.

2. Stipulations for Lien Waivers

Have you thought about what would happen if a subcontractor, supplier or other party involved in the project claimed later on that they weren’t paid for their service or product and then tried to place a lien on your property in DeKalb County? This scenario isn’t unheard of, which is why lien waivers are common in the construction industry. These documents are signed by crew members and trade partners at the end of the project, stating they were paid in full and waive their future right to place a lien on your property as part of a dispute. Your home improvements contract should include a clause requiring your contractor to provide you with lien waivers for each payment you make to them, as well as after payments to suppliers, employees and trade partners.

3. Total Project Price and Payment Schedule

Another important part of your remodeling contract: a total fixed price for the project based on the scope of work and materials you selected, along with how much and how often the contractor will be paid. The timing of each installment may be based on specific dates or project milestones during your home addition or renovation in Sycamore. According to typical contractor payment terms, your initial payment at the start of job should be no more than 10% of the total project price. If you’re ordering expensive items for the remodel, such as windows, cabinets or imported items, you can offer to pay the supplier directly. In the contract, also include a provision that your final payment isn’t due until the remodeling project is completed to your satisfaction. You want to make sure you’ve reserved enough funds to pay for a new home remodeler if it doesn’t work out with your first one.

4. Detailed Construction Schedule

When you’re working with a competent, experienced home remodeler in Northern Illinois, they should be able to tell you when the project will start, along with an approximate completion date. The schedule in the contract should also provide a clear picture of what projects will be done when and by which trade partner, barring any unexpected weather delays or back-ordered materials. The construction schedule isn’t meant to break down the project to the exact hour or minute, but it does set some expectations and provide you evidence in the case of a dispute over a remodel that’s dragging on.

5. Procedure for Changes

Occasionally, you or your contractor may need or want to make changes to the original plan after construction has begun. In your contract, include the proper procedure that must be followed before changes can commence. For example, your contractor should give you a clear description of the new work, how it will affect the schedule and how much it will cost. Change orders should rely on written, rather than verbal, agreements.

6. Termination and Arbitration Clauses

Remodeling contracts also should include a couple other protections for you and your contractor, including an escape hatch, a termination clause and a provision about how disputes will be settled. The first protection simply gives you the ability to rescind the contract without penalty within the first few days—typically three—in case you must for various reasons, such as finding out you didn’t acquire a funding source you expected. The termination clause outlines the conditions upon which either you or the contractor can end the job before completion without penalty.

7. Signatures

To ensure your residential remodel contract is a legally binding document, it needs to have signatures from both you and your contractor. Once you’ve carefully read through the contract, and even had a lawyer or third party look it over, you will add your signature so the construction phase can commence.

Preparing for Your Remodeling Project in Northern Illinois

A successful remodeling project not only depends on the end result, but also the efficiency of the process along the way. At Ken Spears Construction, we provide you with a quote for your project, as well as the start and completion dates and what will happen between those two points, before we begin construction. While your home remodeling project in Northern Illinois is underway, we continue to stay in contact with you and provide answers to questions you may have to grant you peace of mind that the work will be completed on time and on budget.

Greg Spears

Greg is the President as well as the production coordinator for Ken Spears Construction and loves helping others improve their lives and space with modern, beautiful spaces. Some of his favorite home construction memories include all of the different people he’s gotten to work with throughout the years.

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