What to Look for in a Contractor’s Contract

A contractor without a contract is just a worker and his or her word. Even the most honest person would be hard-pressed to keep track of all the conversations that go into planning for the average construction project. That’s where a good contract comes in. Many a conflict can be avoided if both parties can simply consult the contract when there’s a misunderstanding on either side. Contracts can save relationships, and your house.

These 10 tips, while just a starting point, will get you thinking about the most critical thing to have in hand before work starts.

1. The contract itself. A contract protects the parties involved. Just because you had a great conversation during the first meeting at the house, and even though the work is only supposed to take two days, you’ll regret not having a contract when one of you forgets half of that great conversation and the work isn’t completed after two weeks.

2. A physical address. Should you need to track down your contractor after work has begun, you won’t find him or her at a P.O. box. Ask to drop off the deposit at the physical location listed on the contract.

3. License. While in some cities getting a contractor’s license may be more a matter of writing a check than verifying skill, check to see that your contractor lists a license required for the work being done. A license may mean that your contractor passed the required exams, or it may just mean the state knows where to find him to collect taxes. But it also means your contractor has done the paperwork and is playing by the rules.

4. Insurance. Injuries can occur on a construction site. If the location is your home and your contractor does not have the proper insurance, you may be held liable. Check with your locality for the proper amount of liability insurance, and if the contractor has employees, check to see whether he carries worker’s compensation insurance.

5. Scope of work. There are many details to get right in a renovation, so write everything down before work begins. This can be the best way to get everyone on the same page. If your designer has drawn up detailed plans, make sure the contract references the designer and the date on the plans so you have something to point to should the finish on your woodwork be different from what you requested.

6. Duration of work. Though projects often take longer than predicted for many legitimate reasons — some caused by the client and some outside the contractor’s control — put the expected project duration in writing. The important thing is not that your contractor shows up every day, but that he finishes the project on time. Having a timeline will help calm your nerves if progress hits a slow spot.

7. Exclusions. A good contract should include a list of exclusions. These might be related to areas that will not be visible until the walls are opened up after demolition, or the level of cleaning you should expect after the work is complete. Also, talk to your contractor about the likelihood of finding asbestos behind the walls. He won’t be able to say for sure, but he can speak from experience and help you plan your contingency budget.

8. EPA lead safety certification. Contractors working on homes in the U.S. built before 1978 should be certified in lead-safe practices by the EPA. You can read more about the requirements here, but in a nutshell, it’s all about minimizing and containing dust during work, which is vital for the safety of you and your family.

9. Payment schedule. While payment schedules can vary by the job, they should always be agreeable to both parties involved. In my opinion, payments tied to milestones in the project are better than those tied to percentages of completion. As long as you are confident that you’re not paying for significantly more than what’s been completed, you should be OK.

10. Warranty. The standard warranty for work is one year from substantial completion. If you’ve checked the contractor’s physical address and gotten recommendations from people you trust, you’ll know where to find him later if needed.

Kenny Grono