Written contract key to great partnership with contractors
Last week we talked about how important it is to hire contractors who are licensed, bonded and insured for your home improvement projects.
Today we’re honing in on the top priority once you’ve selected such a contractor – make the business relationship clear through a written contract!
Once again, we’ll mention that we are not attorneys and don’t offer legal advice. That being said, think of us as an experienced neighbor who has worked with a few contracts over the years.
Put everything in writing
Besides your name and address, a contract should name the construction company, all of its owners, all pertinent addresses, phone numbers and the contractor’s license number, bonding agent, bond amount, as well as his insurance company and the liability coverage amount.
To verify this information and check for complaints, call Labor and Industries and the Better Business Bureau.
Your contract should contain the scope of work, any drawings or other specifications (such as a manufacturer’s installation specifications). If you’re not capable of doing this, there are construction management firms in the area, including us, who can help you.
Also include general conditions of the work site such as the hours available to work, keeping a clean site or even toilet use by workers.
The contract should clearly state the price agreed upon for the job, including all materials, taxes, fees and permits. If you are working on a cost-plus-materials basis, find out the cost of each man on the job and if there is a mark-up on materials. No surprises.
This is also the place to define progressive payments. Using a brief description of the progress required for a payment works well. It should also state that before any payment, the contractor, any sub-contractors and any materials company having delivered materials on your property will each turn in an Unconditional Lien Waiver. Small incremental payments are actually better than large payouts.
Dates are key elements to contract
Dates are also important elements to your contract. Time delays may occur, but what do you want to happen when the contractor doesn’t call or show up for a couple weeks or drops off the earth?
Adjustments to time and penalties for not showing up or not finishing the job in the contract period should be clearly stated.
What about other changes to the contract? Your contract should say something like this: “The owner and the contractor expressly agree that no material changes or alterations in the work, price or time shall be made unless in writing and agreed upon by both parties and signed.”
Who is getting permits?
Your contract should also address who will be responsible for any permits, building code requirements and arranging for City or County inspections.
Permits are required for most work done on your property and initially you should be the person to call your local official when writing up what you want done. If you have a designer or architect drawing up a plan, they should be held responsible for knowing and designing with respect for the applicable building codes.
Your contractor is also expected to follow the local building code and certainly to follow any professionally designed plan provided and that has been “plan checked” by the City or County plan checkers, before a building permit is issued. This very important step in the process is often not communicated and causes lots of problems that end up in the courts.
We don’t advise allowing any work to be done until the permit is in a sealed bag and attached to the outside of your house!
Observe inspections if you can
You should also be aware of each required inspection. The building official will clearly mark on the permit card when they want to inspect the work. Pay attention to any notes written on the permit card by the inspector. Attend the inspections whenever possible. Know what is going on; it’s your project.
Don’t mix oral with written contracts
A final note: Don’t mix oral agreements with written contracts. Write every little change down for everybody to sign and date. If it changes the money, adding or subtracting from the contract amount, write the new money changes down and everybody signs.
The better the contract is written and followed, the less likely there will be problems. And long after the work is completed, both parties can bask in a job well done.