Home Improvement Contracts
By Kristi Vaughan
Written contracts for home improvements are more than a formality. They are the legal protection both you and the contractor have to ensure that the proper work is done and proper payment is made.
Reliable contractors appreciate the protection just as much as you do. Many states also require contracts when the work exceeds a certain value. The following is a list of items organizations such as the Federal Trade Commission and the Better Business Bureau recommend you include:
What Contracts Should Contain
All contracts should contain:
- Contractor's name, address, telephone number and license number
- Complete description of the work to be done
- Detailed materials list
- Estimated start and completion date
- Total cost broken down by labor and materials
- Payment schedule
- Clearly stated procedure for change orders
- A written statement of your right to cancel within three days if you signed the contract in any place other than the contractor's permanent place of business.
The National Association of the Remodeling Industry additionally recommends that the contract include:
- A requirement that your signature be on all plans
- A warranty covering materials and workmanship for at least one year
- Policy for daily clean up
- Binding arbitration clause
- Request for a contractor's Affidavit of Final Release
Contractor fraud
To protect yourself from contractor fraud, the National Association of Home Builders recommends that you watch out for the following warning signs:
- Contractors soliciting business door-to-door
- Inability to verify name, address, phone number or credentials
- Unwillingness to supply references or inability to locate those references
- Cash payment requirements
- Requests for entire payment in advance
Backing out
If you change your mind about a home remodeling agreement, you may be eligible to back out of the deal under the FTC's "Cooling Off" rule. This rule applies only if the change of heart occurs within 72 hours of the initial agreement and the agreement falls within the guidelines. The agreement must have been made outside the seller's place of business, but does include those made in your home.
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