I was mentioning that you should carefully choose the contractor you want to use for your renovation or home repair project. I also mentioned that no matter what the size of the job, big or small, get it in writing.
A written contract is a binding legal agreement between you and your contractor. It clearly shows the responsibilities and rights of each party. It also reduces your risk, safeguarding you against financial loss or personal liability in case of accidents or injuries.
The contract also is a good place to start for a good working relationship between you and your contractor because there should be no misunderstandings or confusion once the job is started.
Professional contractors are business people and know that a written contract is part of running a good business, so don’t worry about asking to have everything put on paper. If the contractor refuses or suggests that everything should go ahead without a contract, don’t do it!
Project elements, site-specific details and other factors that make each renovation unique will make every contract different in some way. Here are some common elements you will find in an average renovation contract:
1.Parties to the Contract
2.Contract Documents
includes additional documents such as drawings, plans, specifications-
3.Description of Work
- preparatory work
- items to be salvaged
- structural details
- product information
- size and location, can refer to drawings
- finishing work
Any work the contractor is not responsible for should also be
noted. A
thorough description of the work can be several pages in length
and can be attached as a separate document (contract document).
4. Timing
Dates and estimates, work schedule and work progression including when
subcontractors will be involved. The schedule should allow for
time needed if you are doing any of the work yourself.
5. Terms
of Payment
Contractors use several methods to determine the cost of a renovation. The
most commonly used is the all-inclusive stipulated fixed cost. Discuss
costs with your contractor.
6. Changes in Work
If you change your mind about anything, these changes can usually
be accommodated by your contractor. You may have to pay a premium
for extras. You
may have to pay a penalty if you are actually scaling back the
work.
7. Utilities and Washroom
Access to water and electricity is essential for most renovation
projects. Can
your contractor tap into your utilities or make alternate arrangements? It
is usually appreciated if workers can use your washroom facilities,
but you are not obligated to agree to it.
8. Standards of Work
This includes daily and final clean-up outlines.
9. Warranty
All workmanship and materials should be guaranteed by the contractor
for at least one year following completion of the project.
10.
Insurance
The contractor should carry third-party liability insurance, with
a minimum of $1,000,000 in coverage. Contact your insurance company
before work begins in case any major project affects the conditions
of your agreement with your insurance company.
11. Compliance
with Workers’ Compensation and Other Laws
You need to protect yourself and make sure you are not liable for
injury and/or loss of income if someone gets hurt working on your
renovation.
12. Other Contractors
13. Dispute Resolution
Agree in advance on a process to deal with possible disagreements
which may come up.
14. Default by Owner or Contractor
What happens in case of default by either the owner or the contractor.
15. Signs
Contractors generally put up signs displaying their service to
neighbours and passers-by. It is common practice and very reassuring for you since, if
the contractor were not reputable and trying to avoid visibility, they wouldn’t
want to be putting up their signs!
Finally, you can seek your lawyer’s opinion on the document before you sign any contract.
A professionally finished home improvement or renovation is a very good investment in your home’s value and in your home equity. If in doubt, get a professional opinion before starting.
Visit the Articles Page for a complete listing of Tammy’s real estate articles, including more on renovations!
Tammy Dufault
Century 21 BJ Roth Realty Ltd.
