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The Contract

 

Your Remodeling Contract

One of the most critical steps in any remodeling project is the contract. This is the one item that holds the job together and ensures that all parties involved agree to the same vision and scope for the project.

The National Association of the Remodeling Industry (NARI) strongly encourages homeowners to be aware of the details in their remodeling contract before they sign. Here are some key areas that homeowners should look for before they sign any contract:

bulletBe sure the contract includes the contractor's name, address, telephone and license number (if applicable).
bulletDetails of what the contractor will and will not do should be outlined-such as protection of personal property surrounding the job site, and daily cleanup or cleanup upon completion of the job. Since this is an additional labor cost for the contractor, it may slightly raise the cost of the job, but it is often well worth the price.
bulletAll materials should be specified. The contractor should detail a list of all materials for the project in the contract, including size, color, model, brand name and product.
bulletThe contract should include the approximate start date and substantial completion dates.
bulletAll required plans should be studied carefully and be approved by the homeowner. Conditions to obtain the homeowner's approval should be identified in the written contract before the work begins.
bulletFederal law requires a contractor to give the homeowners written notice of their right to, without penalty, cancel a contract within three business days of signing it, provided it was solicited at some place other that the contractor's place of business or appropriate trade premises-the homeowner's residence, for instance.
bulletUnderstand the financial terms. Make sure that the terms are spelled out in the contract. The total price, payment schedule and any cancellation penalty should be clear.
bulletThe contract should include procedures for handling change orders during the course of the project.
bulletA warranty covering materials and workmanship for a minimum of one year should be written into the contract. The warranty must be identified as either "full" or "limited." If it is a "full warranty," all faulty products must be repaired or replaced, or the homeowner's money returned. A "limited warranty" indicates that all replacements and refunds of damaged products are limited in some regard. The name and address of the party who will honor the warranty (contractor, distributor or manufacturer) must be identified. Make sure the time period for which the warranty is offered is clearly specified.
bulletA binding arbitration clause is also a good inclusion in the event a disagreement occurs. Arbitration can enable both parties to resolve disputes more quickly and effectively without costly litigation.
bulletRequest a contractor's Affidavit of Final Release be provided to you at the time you make final payment. This is your assurance that you will not be liable for any third-party claims from nonpayment of materials or subcontractors.
bulletThoroughly review the entire contract and be certain you fully understand it before signing. Consider the scope of the project and make sure all items you have requested are included. If you do not see a specific item in the contract, ask about it-otherwise, assume it is not included.
bulletNever sign an incomplete contract and always be sure to keep a copy of the final document, including signatures, for your records.

For more advice about ways to protect yourself, call the NARI Homeowner Remodeling Hotline at 1-800-440-NARI (6274) for your free copy of The Master Plan for Professional Home Remodeling magazine. This publication is filled with tips about everything in remodeling from questions to ask during the interviews to how to prepare a budget. You can also contact us or any of our member firms for more information.

 

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Last modified: July 08, 2003
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