If you are having any work done to your home, make sure you have a contract. A contract is a legally binding document that lays out exactly what you want, what the contractor agrees to do, for how much, and by when. It also protects you both should a dispute arise.
What Is a Home Improvement Contract?
A home improvement contract, sometimes called a remodeling contract, serves as a legal agreement between a property owner and a general contractor. General contractors provide these contracts to customers when performing construction work.
The document addresses the legal scope of what covers the home’s improvement, the time frame for the job’s completion, compensation, and any other matters that are relevant to the work itself. Even for a small job such as painting a single room in your home, it’s best to consider using a home improvement contract so you have legal protection in the event things do not go as planned.
How to Write a Home Improvement Contract
You are more than welcome to write your own home improvement contract whether you are the owner or the general contractor. There are several ways in which you can do this.
- Use a template;
- Write your own contact;
- Hire a lawyer.
If you use a template, you can enter necessary data like the names and addresses of all parties involved, the budget, and the time frame and then print a boilerplate form. However, if you rely on a poorly drafted contract, it might include sections that don’t make sense for the scope of your project and if a customer or contractor disputes the work and goes to court, they can use anything, no matter how poorly written, against you.
Alternatively, you can choose to write an individual contract from scratch, which might provide better results. For this you want to start by gathering any relevant information necessary to the job. There are online templates with relevant sections you want to include based on the type of job it is.
Again, hiring a contractor to paint a single room in your house might not necessitate as many sections for materials or storage on site as someone remodeling the first floor to their home. If you are unsure about any specific provisions you want to include in your contract, you can speak with a construction lawyer.
Make sure you print out enough copies of your completed contract and have all parties involved sign with blue ink. Send hard copies and digital copies to all parties.
Larger construction companies typically hire lawyers to draft their agreements directly, which can help save the cost of future litigation and dispute. As a homeowner you might consider working with an attorney if you are having an especially large home remodel or construction job completed in the future.
Key Parts of a Home Improvement Contract
Home improvement contracts should function as an outline for your project. So, the key parts of a home improvement contract start with the scope of the work. This outlines what service to include and exclude. It will also explain where the crew will store materials, what tools, materials, and supplies the crew will use, and what the cleanup should involve.
The second part of a good home improvement contract is licensing and insurance from any contractors with whom you work. The license number should be visible on any and all communications you have between you as a property owner and the general contractor, including a proposal, oral agreement, contract, and estimate. If they have liability insurance, that information should also be listed in the agreement.
You should include any warranties, any information identifying subcontractors the general contractor will use, as well as the relevant start and end dates. A separate section should be about the payment whether you are going to make progressive payments at the start of the project and at corresponding milestones throughout or at the end of the project completion.
Include inspection provisions that stipulate the inspections that will take place (by planning commission or building department) before the work starts, during the work, and after the work is completed and who will be responsible for those document filing fees and inspection fees. Should you need it, you can also include other clauses based on where you live such as a:
- contingency clause;
- liability clause;
- termination clause;
- misinformation clause;
- indemnification clause.
If you are making a purchase, then you may be handed a bill of sale to sign. Likewise, if you are selling a personal item, you may be...
How Improvement Contract Sample
The home improvement contract will start simply enough with language like the following:
This contract is between: ________________, _________________ (the “Owner”) and _____________, _______________, ____________ (the “Contractor”), who is licensed in the state of _______, under license number, ______________.
Project Address: ______________________________
Payment. Payment shall be made to ______________, in the amount of $_______ upon completion of the services described in this Contract.
Payment discount terms include a ___ discount if the bill is paid within ___ days.
If any invoice is not paid when due, interest will be added in payable on all over to amounts at ___ percent per year, or the maximum percentage allowable under applicable laws, whichever is less. _____ shall pay all costs of collection, including without limitation, reasonable attorney fees.
In addition to other remedies available by law, if __________ fails to pay when Services are complete, ____________ has the option to treat this as a breach of Contract and seek legal remedies.
Terms and Conditions
Contractor holds a valid license to practice in the state of ___________.
- Time for Performance
Contractor shall commence work on or before _________. If Contractor fails to commence work within 30 days of the date of commencement, Owner may delay payment for the same time frame.
- Drawings, Specifications, and Permits
This project will be constructed in accordance with specifications and drawings included in this contract which have been examined by the owner and signed by all parties involved. Unless otherwise agreed upon, Contractor will obtain and pay for all permits associated with the drawings and specifications previously agreed upon. Owner will pay for any assessment or changes required by the county such as repaying the cost of storm drains, water services, or the cost of sewers.
Owner will point out all property lines to Contractor and utilize proper drawings for the contractor stipulating specifications of property lines.
- Property Lines
Unless otherwise specified, Owner will provide all electric utilities, gas, sewer, and water utilities from the point of entry at their property line to those devices in compliance with federal and state law. Owner must make drinking facilities and toilet facilities available to all workers or provide compensation to Contractor for the cost of renting such facilities. Owner agrees to provide electricity to the contractor during job site work.
- Access to Work
Owner must grant free access to work areas for workers and vehicles and provide storage areas for any materials. Owner agrees to keep driveways clear and available so trucks can park and move during scheduled work hours. Owner is responsible for securing all entrances to the job site to prevent people other than the owner, contractor, and authorized workers from gaining access. The contractor is responsible at the end of every workday for storing all materials and equipment in provided facilities. Contractor is not liable for damages to shrubs, vegetation, lawns, walks, or driveways by movement of workers, trucks, equipment, or material.
Owner is responsible for obtaining any and all financing necessary for the work specified in this contract.
This contract can go on to include many other applicable sections, but the above example gives an idea of what type of legal language and instructions are in this type of contract.
Do I Need a Home Improvement Lawyer?
If you are unsure how to approach the contract, or you want someone else to look over your agreement after you write it, then you might consider working with a lawyer. A home improvement lawyer can draft a form for you based on your state’s requirements.
Overall, knowing when to use a contract for home improvement can help save you as the general contractor or homeowner. Knowing how to write a home improvement contract can at least save you time and money by drafting something with most of the things you need like information on the payment, date, inspection, fee, clause, etc. before you bring it before an attorney for review. An attorney is not necessary for this type of work, but it might be best to have them look things over nonetheless.