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The Remodeling Contract

Part 2 Of Our Real Life Remodeling Journey

Publisher's Comments

The following story is part of a series of articles about my family's experience with our home's remodel. Links to the other stories are found at the bottom of the page.

A remodeling contract isn't the glamorous part of a home remodel but it's just as important as the foundation the house sits on and the roof over your head.

Why? Because the execution of your remodeling project rides on that piece of paper.

I'll be honest; the contract piece wasn't something that I looked forward to, primarily because I can't stand the legalese and all that fine print that just seems like one run-on sentence.

In the end however, that's essentially what we got. But it wasn't our contractor that was responsible for the wordiness, it was us.

Let me explain. . .

Making The Plan A Reality (Legally)

After months of planning, putting our proposal out for bid and finally choosing a contractor we felt comfortable with, it was time to sign the contract. Until then everything we'd discussed with him was just that - a discussion. But no foundations would be excavated and no nails pounded until that piece of paper (or several papers) known as the remodeling contract was signed.

examining the contract

When it comes time for that big moment you have a choice of reviewing the contract yourself or having an attorney look at it. In our case, we simply felt more comfortable putting it across a lawyer's desk for his or her input. Let's face it; my wife Cindy and I don't do this every day and when you're spending a good chunk of change, you want to be sure you're protected.

The remodeling contract we received from our contractor was actually well written, easy to understand and fairly brief. That was good by me. But in reality, it provided protection for the contractor but not much else for us. We really didn't know that until we had our lawyer look over the information. I don't fault our contractor for that. He's just looking out for his side of the equation.

We were fortunate in that a friend of ours, who happens to be an attorney, also specializes in this kind of contract law. He's actually represented both sides - contractors and buyers. Lucky for us, we didn't have to hunt for an attorney.

But what if you don't have such a friend and need someone to review your remodeling contract? My first recommendation is to check with friends or relatives to see if they know anyone they could recommend.

If you get a recommendation but the attorney doesn't specialize in contract law, you can ask that attorney if they can recommend someone who does. Finally, if you can't drum up any resources from those channels, look locally for an attorney who handles contract law. The phone book or a local search through one of the online search engines are two resources.

Changes To The Contract

We took the recommendations from the attorney and proposed our revisions to the the contract. Admittedly I didn't include every last point that the lawyer recommended. For example, he suggested that there be financial penalties for going beyond the contract finish date. However we thought such language was unnecessarily punitive given the relationship we'd already established with the contractor we chose.

I'm sure there are many reasons why such a clause would be the right thing to include but it's just something we didn't think was necessary for our situation.

Fortunately our contractor was accepting of all of the changes with just a few minor adjustments. In my view the remodeling contract now reflects a balanced arrangement, with clarity on the work to be performed and rules on how it should be executed.

Cindy and I inked our names on the paper and our remodeling dream was on it's way. Yikes!!

A Sample Of The Attorney's Recommendations

To give you some idea of the type of feedback we received from our attorney, I've included some of the high points below.
  • Specify a start and end date - you can offer incentives for finishing early or price reductions for extensions beyond the contract date.
  • Language on lien waivers - this specifies that you receive subcontractor lien waivers upon payment to those subcontractors for their services (this is analogous to a 'receipt' from the subcontractor that they've been paid and cannot put a lien on your property because of non-payment).
  • Clarity of warranty language - your state might have specific laws governing your rights relative to the warranty for contracted work above and beyond what the contractor has provided. You may want to be sure the contract warranty is consistent with those requirements.
  • Subcontractor name and address list - if not a specific contract line item, you may want to have the business information (name/address) of the subcontractors used on the job for your reference.
  • A balanced payment schedule - this ensure's you're not paying too much up front before a commensurate amount of work is done for the amount you've paid. In other words, paying for 40% of the total contract price up front or before 40% of the project is completed is too lopsided in the builder's favor. Some funds will be needed for pre-purchase of materials but make sure there's a balance between the money being fronted and the work getting done.

These were some of the key points our attorney recommended we include or change in the contract and I offer them as a sample of the kind of input a legal review can offer.

The bottom line for us was that there were things we simply didn't think of and wouldn't have included in the contract if we hadn't acquired an attorney's review. We also had questions about the "what ifs", but didn't know how to address them in the contract.

For example, what happens if the contractor can't complete the project? How do disagreements get resolved? Hopefully you never run into these issues but it's better to have an agreed-upon means to address them up front than to try and figure them out later on.

Looking out for your interests shouldn't be construed as a lack of trust in the contractor either. It's simply an effort to ensure that the resulting contract is a balanced agreement that provides clarity on how the project is to be executed and includes provisions for addressing any issues that might arise for the sake of both parties.

Some Resources That Might Help

If you'd like to see a sample of a building/remodeling contract here's one reference that may help you. It's from the Minnesota (US) State Bar Association and is a proposal and contract for building and home repair. It'll show you the particulars of what could be contained in a remodeling contract.

I won't be shy about the following disclaimer: all information given here is not and shouldn't be considered legal advice. It's offered strictly to provide some help in this subject area. You should seek legal counsel for any guidance with a remodeling contract.

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