What Your Remodeling Contract Should Say

You can adjust a remodeling contract before you sign, so review it carefully to make sure it contains payments, work schedules, and correct project specs.

Check Contract Basics

The basic job of a contractor agreement is to spell out the scope of the project’s work. This is the document you and your contractor will consult throughout the job, so make sure it’s as clear and detailed as possible.

A thorough contract is filled with numbers and stipulations that will probably take several hours to review, so leave enough time to go through it before signing. The contract should state:

  • That the contractor will secure all necessary permits and approvals.
  • What the payment schedule will be.
  • Start and end dates for the project.

The contract needn’t contain product specs on its pages. Instead, it may refer to the contractor’s attached, itemized bid.

Set a Payment Schedule

The contract is your summary of how much and when you should pay for completed work. Payments should be linked to work milestones, such as when the foundation, rough plumbing, and electricity are completed.

Here are some general guidelines:

  • First payment should be no more than 10% of the total job.
  • Final payment should be enough money — up to one-third of the total cost of the project — to make sure the contractor returns to correct unfinished details.
  • Keep back enough money to hire someone else to finish the work if things go south with your contractor.

Schedule Start and End Dates

A boilerplate contract won’t say when the job will begin and end, so make sure you add those details to the document.

Look at these dates as a time frame, not a minute-by-minute promise. Delays happen and an eight-week job wraps up in nine. But if the project drags on for months, written start and end dates will help make — or defend — your case in the event of a legal dispute.

Related: How to Resolve a General Contractor Dispute: Your Legal Options

Specify Change Orders

Make sure the contract states that any changes affecting the cost of the job must be priced in writing and countersigned by both the contractor and homeowner before that work commences. This line ensures that offhand discussions don’t result in unforeseen additional costs.

Written change orders also help you update your budget and resist the frequent urge to expand the job.

Research Your Arbitration Options

Many remodeling contracts contain a clause that stipulates that an arbitrator, rather than a judge, will resolve disputes. This clause can save you time and money because a court fight is expensive, even if you win.