Originally created 02/05/06

Remodeling? Be specific about your contracts

If consumer protection starts at home, then the basic building blocks of remodeling projects ought to include a detailed contract.

Homeowners who stick to generalities can get burned in the legal process if they avoid specifics on a host of topics concerning budgets, work timetables and aesthetic expectations. Point-by-point documents can cover overlooked points from parking to change orders to site security and clean up.

Attorney Gregory Kenyon says homeowners are "better off to be specific and quantifiable" because most consumers without a contract are at the mercy of the contractor regarding complaints or claims. To merely approve a project with a wave of an arm with instructions to the contractor to "call me when you're done" only invites post-project recriminations.

Pursue contracts for even modest projects where minute issues can mushroom into big-dollar legal headaches.

Contractors typically slide a generic contract across the kitchen table to customers. It's a good starting point, but such papers may not touch on the universe of issues in the customer's best interest. Make sure your attorney reviews or alters the contract before you sign it.

Here's a list of contract points worth putting on paper.

--Scope of work. For instance, rather than simply note "remove kitchen window," expand the detail to removal and disposal of the old window, specify brand and size of replacement window, ask for triple plane glass, and require the window weatherproofing be connected to the weather barrier on the home. You might also stipulate a wood, vinyl or metal clad window. Repeat this process for all significant portions of the project.

Consumers should retain an architect or other construction expert to help define and identify scope of work issues. It's not unusual for scope of work sections to be 5-10 pages. Kenyon says such detail works to a homeowner's benefit.

--Time frame. When will the project start and when should it be completed? Be precise about the start and end of the workday. Kenyon often adds an incentive for completed work and a penalty clause if work goes beyond the agreed-to completion date. "Positive reinforcement is viewed more favorably the both parties," says Kenyon, "but you need a way to hold their feet to the fire."

--Payment. Pay-as-you-go is your best option. Your architect can help you frame benchmarks when payments are due. Kenyon uses examples of moneys paid when basement concrete is done, when the roof is finished, when windows are installed, etc. Worth inclusion: payment for materials only as materials are used. No advances.

--Failure to perform. This is the penalty phase of a contract. Language can give the contractor a chance to remedy faulty work, otherwise know as a default. You can stipulate that if you give the contractor written notice and problems are not corrected, the contract is void with subsequent repairs charged to the contractor. Another feature: insist on a performance bond that will pay for work that is not performed.

--Alternative Dispute Resolution. This approach has grown in popularity as an option before heading to court. The matter might be negotiated before an arbitrator or arbitration panel. This can save both time and money. Kenyon calls ADR a "positive action rather than throw the case to a judge where you don't know what will happen."

--Change orders. These are essentially changes to the scope of work. Add precise language on how changes will be handled and paid for. An example is substitution of granite in place of a planned laminate counter. This changes cost and work skills.

--Proof of insurance. Contractors must have insurance. Insist on actual documents, not photocopies. Your general contractor should also provide proof of insurance for subcontractors.


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