Home Access Answers
Remodeling?
Check Contract Carefully
by Jane Hampton
Dear Jane,
My husband and
I are in the beginning of a large remodeling project to our home.
We have received three bids from different construction companies.
We are surprised at how different the bids look. One contractor,
the highest bidder, has a lot of paperwork (material lists, legal
sounding forms and contracts for us to sign), while the lowest bidder
has submitted a bid on one page. When we ask the latter if something
is included, he says “yes” and that his “word is
his bond.” They all seem trustworthy, but I’m not sure
I’m comfortable conducting business on somebody’s word.
Can you help me?
Mandy, Hastings, Minnesota
Dear Mandy,
Your instincts are correct—good
for you! When it comes to hiring a contractor and signing a contract,
it is important to make sure your home and finances are protected.
Each contractor presents their bid in a different manner, indicating
what they will be doing and how much it will cost. There is much
variability in what is included and how the contract is written,
and yes, some contractors are more detailed than others. Beware
of contracts that are brief; too little information leaves a lot
to be interpreted . . . or misinterpreted.
Before signing any contract,
it is recommended you check with the Minnesota Department of Labor
and Industry to see if your contractor is licensed by the State
of Minnesota. Contractors and remodelers doing work in Minnesota
are required to be licensed, though there are some exceptions to
this rule. If you hire an unlicensed contractor, even one who is
not required to be licensed, you may have less protection if something
goes wrong. Unlicensed contractors may not carry liability or property
insurance that licensed contractors are required to have…and
you may not have access to the Contractors Recovery Fund if you need
to file a claim against the contractor.
A contract should be written using simple language to avoid any
confusion. Characteristics and specific information recommended to
be included in any remodeling contract are as follows:
Project Scope and Specifications
Ensure that all contractors bidding on your job are bidding off
the same information. The scope of work should be very specific as
to the remodeling you want done. It should include drawings and dimensions,
the kinds of materials to be used, brand names, colors, grades, styles
and model numbers. A brief bid leaves too much room for interpretation,
and you have nothing with which to protect yourself in the event
the contractor does not construct what you had in mind.
Building Permits
Whoever obtains the permits is required to ensure that the work
meets all building codes. The contractor should be the one to obtain
the permits so that they are responsible for the work.
Starting and Completion Date
Construction
delays are to be expected; however, they should be limited. A general
statement establishing a starting and completion date while allowing
for “reasonable” delays should be included
in any contract…as well as the consequences.
Change Order Clause
A change order clause requires that all changes be in writing to
protect all parties involved. Any changes made to the contract must
be approved and signed by both you and your contractor.
Names of Sub-Contractors and Suppliers
The contract should include
the names of all sub-contractors and material suppliers so you can
obtain lien waivers indicating all sub-contractors and material suppliers
have been paid before you issue final payment to the contractor.
This will protect you from any action against you by the contractor,
subcontractors or suppliers.
Schedule of Payments
Avoid any contractor
who requires a large percentage of the payment up front. It is
customary to make a “good faith” down
payment of a small percentage of the total job and set up a payment
schedule based on completed stages of the project. The total project
price or how the price will be calculated should also be clearly
defined in the contract.
Holdback Clause
This states that final payment
will be withheld until sometime after job completion. This will allow
you time to inspect the work, provide an incentive for the contractor
to remedy any problems, and obtain lien waivers from the contractor
indicating all subcontractors and suppliers have been paid.
Cleanup
Construction and remodeling projects make a huge mess! Be sure to
establish who will do the cleaning, how often, and to what level
of cleanliness.
Home Warranties
Minnesota law requires that contracts for new-home construction
and home improvement projects include warranties against defects.
These warranties are in addition to other warranties the parties
agree to, and are in place even if no written warranty is provided
to the homeowner.
This is a list of the basics that should be included in a contract;
there are many other items that can be included, depending on the
type and size of job. If your contractor is not incorporating these
items, you may want to take it upon yourself to ensure the following
issues are documented and signed by both parties. And if you have
any questions regarding your interest, you may want to have an attorney
review the contract before you sign anything.
Remember, ultimately the contractor works for you, you are the boss!
Do not sign anything until you are absolutely comfortable with the
contractor and that the terms of the contract are meeting your needs. ![]()
Questions for Jane? We’ll
cover them in future issues of Home Access Answers. Please contact
us at 952-925-0301, www.accessibilitydesign.com or
info@accessibilitydesign.com. Jane Hampton, CID, Access Specialist
and president of Accessibility Design, founded the company in 1992
to enhance lives through design and project management. They provide
design, consultation, project management, and product recommendation
services specializing in home access for individuals with disabilities
at all stages of life.
