Home Improvement and Repair Contracts

Terms and Conditions: All agreements and oral promises regarding a home improvement project should be put in writing to protect both the customer and the contractor. If you intend to do some of the work yourself or hire another contractor to do it, such terms should be written into the contract as well. The written contract should also include:

A thorough description of the work to be done-specifying all materials to be used in terms of quality, quantity, weight, color, size, brand name, etc.;

• Agreed upon starting and completion dates;
• Total cost, with a breakdown of labor and material charges, including a detailed list of all materials including color, model, size, brand name, and product;
• A payment schedule;
• Any warranties and guarantees of workmanship, including the names and addresses of the parties honoring the warranties - contractor, distributor or manufacturer - must be identified. The length of the warranty period and any limitations also should be spelled out;
• The method for debris and material removal once the job is finished; and
• A written statement of your right to cancel the contract within three business days if you signed it in your home or at a location other than the seller's permanent place of business. During the sales transaction, the salesperson (contractor) must give you two copies of a cancellation form (one to keep and one to send back to the company) and a copy of your contract or receipt. The contract or receipt must be dated, show the name and address of the seller, and explain your right to cancel.
• The payment schedule for the contractor, subcontractors and suppliers.
• How change orders will be handled. A change order - common on most remodeling jobs - is a written authorization to the contractor to make a change or addition to the work described in the original contract. It could affect the project's cost and schedule. Contractors often require payment for change orders before work begins.
• All oral promises should be made part of the written contract

In addition, make sure the written contract includes: 

• The contractor's full name
• Address
• Telephone number
• Professional license number
• Never sign a partial or blank contract. Read every contract clause carefully and ask any questions you may have before signing. Retain a copy of the contract once it is signed, and file it in your records.

You should make every attempt to pay a minimal or no down payment for supplies or services; especially if you have not done business with a contractor in the past. You should not make any payments for incomplete work. Schedule payments should be defined and it is recommended that payments should be based on completion of each phase of the project and upon receipt of a release of lien from all suppliers and subcontractors. All of these terms should be spelled out in the contract and clearly understood by both you and the contractor.

Cancellation Rights: When you sign a home improvement contract in your home and in the presence of a contractor or contractor's representative, you have three business days in which to change your mind and cancel the contract. The contractor is required to tell you about your cancellation rights and provide you with any cancellation forms. If you cancel, it is recommended that a notice of cancellation be sent to the contractor by certified mail, with a return receipt request.   For more information on your right to cancel, visit the Federal Trade Commission's website at www.ftc.gov.

Never make final payment or sign an affidavit of final release until you are satisfied with the work done, that the job has passed all required inspections,   and know that all subcontractors and suppliers have been paid.

Lien Protection: For a large remodeling job that involves several subcontractors and a substantial financial commitment, you should protect yourself from liens against your home if the primary contractor does not pay his or her subcontractors or suppliers. You may do this by adding a release-of-lien clause to the contract or by placing your payments in an escrow account until the work is completed.

Warranty Clause: Any warranty offered on products by the contractor should be in writing and scrutinized carefully. Make certain you understand all the terms and conditions, including the length of the warranty. The warranty must state whether it is a FULL warranty that gives the consumer certain automatic rights or a LIMITED warranty that restricts certain consumer rights.

Keeping Records

Keep all paperwork related to your project in one place. This includes copies of the contract, change orders, releases of liens, receipts, and correspondence with your home improvement professionals. Keep a log or journal of all phone calls, conversations and activities. You also might want to take photographs as the job progresses. These records are especially important if you have problems with your project - during or after construction.

Project Completion Checklist

Before you sign off and make the final payment, use this checklist to make sure the job is complete. Check that:

• All work meets the standards spelled out in the contract.
• All required inspections have been made and the work passed inspection.
• You have written warranties for materials and workmanship.
• You have proof that all subcontractors and suppliers have been paid.
• You have inspected and approved the completed work.