Whether you have a crummy kitchen, want to add a room on to your cramped bungalow or need to tear apart the entire joint and start from scratch, remodeling work requires making multiple decisions and careful hiring.
At Checkbook.org, you’ll find advice on vetting potential remodeling contractors, plus unbiased ratings of local businesses. Until June 5, Star Tribune readers can access Nonprofit Twin Cities Consumers’ Checkbook’s ratings of local general contractors free via Checkbook.org/StarTribune/remodel.
Once you find a stellar home improvement company, you need a firm written agreement. Here are points to include in a contract for a medium-sized or major project, but many of these points also apply to small projects. By putting all the details of your job in writing, plus a few other clauses, you can eliminate common sources of disputes.
Contact info: including the names, addresses and phone numbers of customer and contractor, plus the company’s license number.
Who will do what: Specify who will perform various aspects of the job and that the company is solely responsible for managing subcontractors.
Detailed job description: Either include a list of tasks or refer to plans and drawings. If you’re hiring an architect or designer to monitor all or part of the project, you should describe that relationship. Stipulate all building products and materials should be new; comply with all relevant laws, regulations and codes; and have applicable manufacturers’ warranties. If you’re supplying appliances or some materials, list them. For millwork, hardware and other finishes, require the remodeler to provide samples for your review and approval.
Price and payment terms: Acquire detailed, fixed prices for all elements of the job. Try to minimize the down payment and maximize the final payment. The more you can withhold until the end, the more leverage you’ll have. Avoid companies that require large upfront deposits. For most major remodeling jobs, you pay in stages as chunks of work finish or before placing large orders. If you’re financing the work via a home equity loan, most lenders won’t release funds until they know the workers have finished a stage satisfactorily. Try to include language in the contract that holds back a percentage of the total price, called a “retainage,” until you’re sure the work is solid. A 10% retainage is common. If the company accepts credit cards, consider charging all or part of your job. If there is a problem, you can dispute the transaction with your credit card company.
Quality standards: To protect against an obviously substandard job, include a catchall phrase about how the contractor will complete the project in a professional manner, and the work will comply with applicable building codes and regulations.
Warranties and guarantees: Include explicit references to any warranties and guarantees, including a clause stating the labor and materials the remodeler provides will be free of defects for a certain period after the job is complete, and repairs or other work to correct flaws will not cost you. One- or two-year warranties are common, but push for the longest warranty you can.
How you can make changes: Include provisions for handling unanticipated or unplanned changes, and instructions for you and the contractor to describe the potential change exactly, agree on a price and incorporate it into the overall contract.
Start and completion dates: Request a firm start date. The completion date probably will be an estimate. To protect your right to cancel the contract in the event of unreasonably long delays, include this phrase: “Starting and completion dates are of the essence of the contract.”
Require that work be continuous: Some contractors delay work for days with little or no activity onsite. Minimize these delays by specifying who will be on the job and, weather permitting, work will be continuous.
Lead paint testing and abatement: The U.S. Environmental Protection Agency (EPA) requires contractors working in pre-1978 homes be Lead-Safe Certified. If your home is older than 1978, include this statement: “Contractor and all subcontractors will follow EPA regulations for testing for lead-based paint and, if detected, taking required steps to contain the work area and minimizing the generation of lead-paint dust.”
Indemnification and waiver of customer liability. Your contract should “hold you harmless” and protect you against claims, costs and attorneys’ fees stemming from the contractor’s work.
Permits and approvals: The contractor should determine necessary permits, apply and pay for them and arrange for government inspections, if required. The contractor also should obtain approvals from a homeowners’ association or historic district, if required.
Liens and waivers of liens: In the remodeling business, liens are a kind of currency. Subcontractors, building material dealers and even individual laborers routinely take them out against property owners to protect against not receiving payment. Add this clause: “Prior to each payment, contractor must provide homeowner with lien releases covering work to which the payment applies. Each release must state the name of the company or individual making the release; the releasing party’s address, materials, or services supplied; the amount the contractor has paid for these supplies or materials; and the homeowner’s address.”
Jobsite: Define the workday: when it begins, when it ends. Contractors should agree to clean all debris from the job site and leave all appliances and household facilities in good working order at the end of each day.
Endgame: Note you have the authority to say when the job is done.
Twin Cities Consumers’ Checkbook magazine and Checkbook.org is a nonprofit organization with a mission to help consumers get the best service and lowest prices. We are supported by consumers and take no money from the service providers we evaluate. Star Tribune readers can Checkbook’s ratings of local general contractors free until June 5 at Checkbook.org/StarTribune/remodel.
