Home Improvement Contracts
A contract is a written agreement between two people, or companies. A contract defines the work performed, how and when compensation will be provided. A well written contract will provide both parties with a clear understanding of the expectations each brings to the agreement, and the standards by which the work is completed. You are not required to use the contractor's preprinted form. A contract is a negotiable agreement and a consumer should not sign anything they are not comfortable with.Here are some things that should be included in the contract.
Who will perform the work
It is very important that the contractor specify the exact information regarding the name of the company, or contractor, proper address and phone number, and the exact license under which the contract is being enacted. Consumers should also have a list of all subcontractors who will perform work, their addresses, and license numbers. There should also be a statement that all employees are qualified for the work they are performing, and are either licensed themselves, or work directly under the continuing supervision of a licensed contractor.What work will be performed
Often a contract will be a standard form with a quick description of the work to be done, and a statement that the work will conform to a set of plans. If the plans are very specific, and detailed, that may not be a problem. However, often plans are no more than sketches. Landscape plans may show a "planted section" but not specify the types of plants to be used. Unless specified otherwise, weeds would be legally acceptable plant material. What is more likely to happen is that an area that looks like it would be lushly planted will have less material than is necessary to fill out the property, and there will be cost overrides for additional material, and a conflict between you and the contractor.Plans should be specific. They need to indicate the type of material, the exact location, and any industry standards when applicable. Installed items, such as spas and barbecues in a landscaping job, should include model numbers and colors as well as statements that they are to be factory firsts, free of defects, and with full written warranties.
What work will not be performed
The contract should also specify work that is not included, especially if the items are listed on the plans. Certain fencing, electrical fixtures, design items, and pieces used to enhance the plan may not be part of the contract. They should be specifically exempted.Standards of evaluation
A contract should be specific enough that there is no disagreement over the quality of the work. The term "industry standard" is too vague. If you have researched the project before hand, you will know how certain work is to be performed. You can reference such material in the contract as a standard to be met. If you are having a concrete slab poured, you may want re bar placed, and tied, forming 1 foot squares. The contractor may prefer 6 foot squares. Put the specs in the contract. This is especially true about appearance items, i.e.. brick patterns, radius cutting, etc.When disagreements occur about the quality of the work, it is best to have a third party evaluate the project. Be sure the contract provides for a mediator. Usually an industry expert is available who can provide guidance. Resolve your differences as the project progresses rather than waiting to handle the issue at a later time. If something looks wrong ( i.e.. a stone, tile, or brick work area ), it can easily be reworked while the concrete is still wet. Breaking it out and getting new materials later will often a much larger problem.
Materials to be used
Be sure the contract is specific on the materials, and the standards which will be applied. Again, what you specify in advance will avoid conflicts later.Timelines
Set reasonable timelines for when the work is to be performed. Inclement weather will always be a concern, because it can delay any project. It is possible to be reasonable. However, if your job gets delayed, and another one starts, you may wait months for work to resume. Be sure the contract provides you with relief for delays that are directly related to the contractor. Obviously, bad weather, strikes preventing the delivery of materials, or major crisis prevent a contractor from delivering work on time, and are not fair for penalties. But vacations, other work, and failure of unpaid employees to show up for work are the responsibility of the contractor.Payment schedule
You will be asked to provide a deposit on the work, and to pay for the job as sections are complete. The contract should specify exactly how much is to be paid, and at what time. This is known as a disbursement schedule.Most contractors do not need money in advance to go buy materials to do the next phase of the job. They ask to be paid when the job section is complete. Since most work is done in sections, once each is complete, payment should be made. However, you should never make a payment if the work is not 100% finished to the exact specifications provided.
It is also reasonable to pay for large material items when they are delivered to the property. If an above ground spa is ordered, and delivered, payment is due even if it has not yet been hooked up. Payment for the installation can be withheld, but you do now have possession of the self contained unit. Payment for construction materials, however, is not the same, because their value is only relevant when they are successfully used in constructing a phase of the project.
One of the most dangerous aspects of using a contractor is that the home owner is responsible for the materials bills if the contractor doesn't pay them, and a lien can be filed on your property. Specify that payments will only be made when you have a release from all material suppliers, and/or subcontractors, that they have been fully paid, and release you from any obligation. Without such a release, you are in jeopardy. If they are to be paid from the funds you give to the contractor, insist on a written release within 24 hours of issuing the check, or withhold any further funds. You should never have to pay twice for your work.
Protect yourself
Have the name of the bonding company specified in the contract, and a copy of the actual bond attached. Have the name of the contractor's insurance company, and a copy of the policy. Review the section on insurance to be sure you are completely protected.Include a statement that no materials may be delivered to your work site, except materials for your job. If a contractor is doing work on several projects they may want to have material for other jobs delivered to your site. If your contractor doesn't pay the materials bill the supplier may place a lien on your property for all of the material delivered to your address.
Your contractor is protected
Be assured the contractor will have his protection in order and listed. Contractors deserve to be paid for their work, and they will have protections spelled out indicating their options should you fail to pay for the work.A properly written contract will eliminate possible miscommunication and misunderstandings. Most disputes are caused by vaguely written plans and contracts.
Resolving conflicts
Be sure to establish a procedure for resolving conflicts. Contact your local state board for the information on their conflict resolution panel. It is best to specify independent mediation for such issues. Mediation is faster, less expensive, and two parties who have an honest disagreement will benefit from the advice of a neutral third party without the intervention of attorneys.
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