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Home improvement contracts protect the rights of general contractors when remodeling a client’s home. They must contain important provisions to make sure projects are successful and prevent future disputes.
The article below will help construction company owners and home owners understand everything they need to know about home improvement contracts:
What is a Home Improvement Contract?
A home improvement contract, also known as remodeling contracts, is a legal agreement between a property owner and a general contractor. General contractors provide them to customers when performing construction work on residential real estate.
The legal document addresses the scope of work, timeframe for completion, compensation, and other relevant matters. It is in everyone’s best interest to ensure they are protected by a written contract, even if they are hiring for a small job, such as painting a room.
You can learn more about home improvement contracts by checking out this article .
How To Write A Home Improvement Contract
There are several ways to approach writing a home improvement contract. How you approach the process depends upon how much you want to protect yourself legally and financially. Consider the following three options:
Option 1. Use a Boilerplate Tempate
The first option is to utilize a boilerplate form online. While this option may seem appealing since it can save you legal fees, you risk offering contract terms that don’t make legal sense for the project. If the customer disputes your work and takes you to court, then you’re left dealing with the consequences of a poorly drafted contract.
Option 2. Write the Contract Solo
The second option is that you can write a new contract from scratch on your own. Take the following steps for a better result:
- Step 1 . Gather relevant information about the contract.
- Step 2 . Find numerous online templates from which you draw inspiration
- Step 3 . Start rewriting the key provisions in a word processor
- Step 4 . Rewrite the terms so that they meet the verbal intent
- Step 5 . Speak with a construction lawyer if you are unsure about specific provisions
- Step 6 . Print out copies of the home improvement contract
- Step 7 . Ask your client to sign the agreement in blue ink
- Step 8 . Provide hard and digital copies to your client for future reference
Option 3. Hire Construction Lawyers
Most professional or large construction companies hire construction lawyers to draft agreements directly. While this approach is thought of as the most expensive option initially, it could save your company money in the long run by helping you avoid future disputes and litigation. Working with a legal professional is akin to buying reassurance.
Key Parts of a Home Improvement Contract
A home improvement contract serves as the guide for the entire construction project. Written contracts ensure greater success and prevent future miscommunications among parties. Keep your agreements simple and in plain language so that all parties understand expectations.
It’s helpful also to incorporate the key parts of a home improvement contract as follows:
Key Part 1. Scope of Work
Home improvement contracts begin with a scope of work that outlines service and part inclusions and exclusions. The proposal should explain how the work is to be performed, parts used, materials storage, and clean-up. It should also include floor plans and artistic renderings of the proposed work.
Key Part 2. Licensing and Insurance
Licensed contractors must display their license number and permits on promotional materials or vehicles bearing the name of their company. Their license number must also be visible on all communications between general contractors and property owners, including contracts, estimates, invoices, and proposals. Construction companies should also list the name of their liability insurance provider within the agreement.
Key Part 3. Change Orders
Home improvement often involves clauses that address repairs not included in the original quote. Construction company owners should clearly outline the process of dealing with unexpected expenses. Change orders can assist if this situation arises by allowing the property owner to issue contractual change approvals on added costs.
Key Part 4. Warranties
A contract should indicate what is covered by a warranty. You will also want to identify responsibility for making repairs. It’s customary to uphold all manufacturer warranties in addition to at least one year on your company’s craftsmanship, engineering, and design.
Key Part 5. Subcontractors
Your home improvement contracts must also identify the names of subcontractors and subcontractor agreements you have in place. For the best result, insert the license and insurance information for each subcontract as well. It’s also a good idea to have your contractor sign a waiver for every payment received.
Key Part 6. Payment
Payment schedules should be specified in the contract and utilize progress payments. Progress payments should be made at the start of specific project milestones rather than at the end. Identifying the beginning of a new milestone is more practical than determining completion dates.
Plus, your construction company guarantees some form of compensation before beginning new work.
Key Term 7. Schedule
A contract should outline relevant dates, including start and end dates. These dates may change, but there should be a system that communicates any changes between the parties in a timely and straightforward manner. It’s not uncommon to face unexpected events during the course of a home improvement project.
Key Part 8. Inspection
Another critical component of home improvement contracts includes inspection provisions. You will want to describe the inspection of the premises before beginning work, upon completion, and gaining approval from a licensed inspector. Describe who is responsible for paying inspection fees as well as document filings and registrations with the county clerk and recorder’s office.
Key Term 9. Other Clauses
Depending upon the state in which you live, there are state-specific laws that your contract should incorporate. There are also other standard contractual provisions to add to your agreements as a matter of form, validity, and enforceability.
Here are a few other clauses you may want to include based on your customer’s needs:
- Contingency clause
- Misinformation clause
- Liability clause
- Termination clause
- Indemnification clause
- Choice of law clause
Home improvement contracts are complex. Reviewing examples can help you solidify your understanding. For more information about the key parts of a home improvement contract, check out this sample .
Image via Pexels by Laurie Shaw
Getting Out of a Home Improvement Contract
The most common way to get out of a home improvement contract is to negotiate the termination. Start by contacting your client or constractor and let them know that you need to end the agreement. Stick to general information and facts since they can later use your words against you as evidence should a dispute arise.
You might have to pay a termination fee if one was included. For situations involving incredibly complex matters, you should always seek legal help for getting out of a home improvement contract with minimal disruption to your business.
Home Improvement Contractor vs. General Contractor
Home improvement contractors are a type of general contractor. General contractors refer to companies that perform construction work on residential and commercial properties. The designation of home improvement contractors indicates that the company performs work on existing structures rather than new construction builds.
Get Help with A Home Improvement Contract
Get help with a home improvement contract by working with construction lawyers . They understand the legal complexities of the construction industry and help you draft the formal agreements when working with company stakeholders, such as customers, vendors, and clients. Their guidance and responsive services ensure that you avoid making legal mistakes while protecting your financial interests. Post a project in ContractsCounsel’s marketplace today to get free bids from vetted lawyers for your project.
Meet some of our Home Improvement Contract Lawyers
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I am a corporate lawyer with expertise working with small businesses, venture capital and healthcare. Previously, I worked at large law firms, as well as head attorney for companies. I graduated from Harvard College and University of Pennsylvania Law School. I speak 5 languages (Spanish, French, Italian and Russian, plus English), visited over 60 countries, and used to compete in salsa dancing!