Did You Actually Read Your Home Improvement Contract?

Remodeling your home, your shore house, or investment property can be exciting. You have a vision, a good contractor, and you’re eager to get started. However, it’s important to take your time with the contract. Be sure that it is thorough, clear, and includes all necessary items before you begin any work. This is vital to ensure the legal protection of you, your property, and your project.

License, Insurance & Permits

The first thing that you need to verify is that your contractor has a valid contractor’s license in good standing.  A contractor working without a license would be in violation of the New Jersey Consumer Fraud Act, N.J.S.A. 56:8-138. Once you have verified this information, it is also important to make sure that the contractor holds liability insurance. This will help to protect your property from any accidental damage, as well as protect you as the owner of the property if a worker is hurt. Finally, be sure that you have any necessary permits from the local construction office. Most cities, neighborhoods, or districts require permitting paperwork to be completed before you can renovate or remodel. Do this research for your area, and make sure that you have those permits ahead of time.  Do not forget about special historic districts that require additional permitting and review.

Specifics

The next thing to check your contract for is specifics. Everything should be explained in great detail, including the scope of work. This will thoroughly detail the work that is to be done. There should also be a list of intended products to be used. As for monetary numbers, the contract should list a specific down payment, an estimated total fee, and retainage specifications.  There should also be a payment schedule listed by milestone.

A timeline of the work performed during the renovation is important to have in your contract as well. You should know the start date as well as the estimated end date, which may be subject to change. Still, it is important to know approximately how long a project will take, especially if you have an intended purpose for the property that needs to begin sooner rather than later.

Just-in-Case

In a perfect world, all renovations and remodels would go smoothly. However, this isn’t always the case. Having a plan for when things go wrong is an important component of your contract. You’ll want to include a worst-case scenario plan with detailed steps to take if certain events occur. This might include steps to take if something bad is found behind your walls, or if you want to end the agreement early.  You may want to insert an arbitration provision in the event of a breach of contract.

Change orders are something else to consider in your contract. This is a plan for how to approach unexpected changes in the construction if they are necessary once you start the process.  There should also be a list of exclusions. This is a list of any work that the contractor is not performing during the renovation/remodeling of your property. These areas should not be touched or damaged, as detailed in your contract.

Finally, ensure a point of contact is listed. This person should be reachable at any point during construction so you can ask any questions or raise concerns. There is often a large team working on your property, so it is important to have one individual in charge of communication so your voice can be heard.

This is not an exhaustive list of issues to be aware of, but a good starting point.  If you have any further questions or would like your contract to be reviewed by an attorney, please contact Ward, Shindle & Hall.