From visualising your renovation to meeting with potential contractors, remodeling projects involve a lot of steps. One important step you don’t want to skip is reading your home improvement contract carefully.
Few things can derail your project more quickly than missing details in a contract or overlooking key information. Below, we’ll walk through the sections that every renovation contract should include so you can feel confident knowing exactly what you’re signing up for.
Ready to start your home remodeling project? Contact the team at JBDB to learn what we can do for you. Whether you want to redo your kitchen, finish a basement, revamp your exterior, or build an addition, we’re ready to take on your project. Schedule a consultation today!
What is a Contract for Home Renovation?
A renovation contract is a legal commitment between you and the builder. It’s important to know that a renovation proposal or bid is not the same as a contract.
Don’t make the mistake of skipping a contract because you already signed a bid agreement. Bids and proposals may contain some of the same information as a written contract, but they’re not as detailed and don’t offer the same protections.
What Should a Home Improvement Contract Include?
Regulations can vary by state, so it’s important to look for rules that apply to your situation. In Minnesota, a remodel contract is required to include:
- Detailed outline of the work to be performed. This may include digital project renderings, a plan for storing materials during construction, a list of subcontractors, a cleanup plan, and plans for electrical and plumbing changes.
- Complete list of the materials the contractor will use or the features they will include. For extra confidence, make sure that brand names, colors, model numbers, and other details are mentioned. The more specific, the better. This part of the contract is sometimes called the selection sheet.
- Payment terms, including the total price you will pay. Your renovation contract should outline what your down payment is and when payments are due throughout the process. Not only will this help you set a budget, but it will also protect you from unexpected expenses.
- Change order clause. Commonly, details of a project will change during construction. Ensure your remodel contract outlines the process for you or the builder to change any aspects of your original agreement.
- Holdback clause. It’s generally a good idea to have your project inspected before you make a final payment. Including a holdback clause gives you an extra layer of protection if there are any issues with the project.
- Agreement on start and completion dates. Agreeing on a timeframe makes sure you and your contractor are on the same page about the project. Knowing how long you have to live in your home during a remodel will help you plan ahead. You can make adjustments if needed, but having an outline of the expected dates will protect you from surprises.
- A list of permits. Your contractor should obtain any required permits before the work begins.
- A state-mandated home warranty against defects. In Minnesota, home improvement projects are protected by a warranty against materials or workmanship that don’t meet building codes.
- The contractor’s license number and insurance details. State law requires that license numbers be listed on construction contracts. It may help to review licensing requirements so you know what’s needed.
James Barton Design-Build is a Certified Remodeler, and we proudly keep up with the latest requirements, education, and certifications. You can always expect the best from our team. Read about our awards and credentials to learn more.
Red Flags to Look Out For in Remodeling Contracts
Renovation contracts can be complicated, so keep an eye out for these warning signs. If you encounter any of the following situations, you might want to reconsider signing a home improvement contract:
- Requiring a large down payment. Average down payments are around 10-25% of the total project for home improvements. Anything over 50% is considered excessive.
- The contractor wants you to obtain the permits. When a contractor secures permits, they are responsible for ensuring the work meets building codes. If they request that you obtain permits instead, it means you’re on the hook. Worse yet, you may face fines and higher fees for getting a permit after work has begun.
- Vague or confusing language. Contracts are legal documents, so it’s not uncommon for them to contain some legalese. However, if you can’t understand the agreement, it’s important to get clarification before proceeding.
- Not having a full list of subcontractors. As a homeowner, knowing who is working on your project ensures everyone is paid, which can protect you from facing a mechanic’s lien after work is completed.
If something goes seriously wrong with your renovation, you might have some coverage under Minnesota’s Contractor Recovery Fund. This provision helps homeowners dealing with the fallout from a breach of contract or a contractor failing to deliver on their promises.
Trust the Experts at JBDB
Remodeling contracts can be complicated, but it’s in your best interest to sit down and read them carefully. Working with a reputable remodeling company like James Barton Design-Build is the easiest way to give yourself peace of mind for your renovation project. We pride ourselves on openness and honesty, and our client testimonials speak for themselves.
Request a consultation today to get started on your home remodeling project!
