What to include in a remodel contract

A remodel contract is the list of what you and the contractor agreed to, in a form you can both keep. California's Contractors State License Board says a written contract is one of the most important communication tools for both sides, and that it should say how the work will be done, when, what materials will be used, and how much it will cost (CSLB). If you are already working without one, start with no written contract. This page is the list to ask for before you sign.

What California says must be in writing

CSLB says a written contract is required for home improvement projects over $500, that the contract and any changes must be in writing, and that you should not sign until you understand it. The board's list, which is California's, not a national form:

• Who they are. The contract should identify the contractor, the business address, and the license number. A number on the page is not proof the license is valid. Look it up. See check the license and insurance.
• The work and the materials. CSLB says the contract should describe the products and how the work will be performed, including size, color, who does which work, and amounts of materials. That detail is the scope of work. Cleanup and debris removal belong there too.
• The price and the payment schedule. There must be a detailed written payment schedule. CSLB says payments, other than the down payment, cannot exceed the value of the work performed. The down payment cannot be more than $1,000 or 10 percent of the contract price, whichever is less, excluding finance charges, and CSLB says there is no exception for special-order materials.
• Permits and a completion date. The contract needs written direction on who gets the permits, and a date of completion.
• Changes. If the price or the scope changes, CSLB says it must be a written change order, signed by you and the contractor before the change. See change orders.
• A warranty, if one was offered. CSLB says to get any contractor warranty for labor and materials in writing. See warranty in writing.
• Your right to cancel. CSLB says the contract must inform you of your rights to cancel or rescind. Read that notice. Do not assume every state uses the same window.

What to ask for even if your state asks for less

The Federal Trade Commission says that even if your state does not require a written agreement, you should ask for one. The FTC's list: the contractor's name, address, phone number, and license number; an estimated start and completion date; the promises made in conversations about the scope and the cost of labor and materials; and blank spaces filled in before you sign. If you sign at home, or somewhere other than the seller's permanent place of business, the FTC says the contract should include a written statement of your right to cancel within three business days (FTC).

The Texas Attorney General adds three habits that are useful anywhere: do not sign a contract with blanks in it, do not let anyone rush you into signing, and keep a copy of everything you sign at the time you sign it. The AG also says a service charge for changing the work order should be covered in the contract (Texas AG). On a Texas homestead, the AG says the contract must contain a specific warning and that the contractor can place a lien. That warning is quoted on the AG's page. Lien paperwork in general is in lien waivers.

Clauses people skip

• Fixed price or cost-plus. Those are different deals. The writing has to say which one, and what you owe if costs move. See fixed price vs. cost-plus.
• Allowances. A named product with no dollar amount is not a price. See allowances.
• A holdback. If any amount waits until the punch list or the inspections, the contract should say what releases it. See holdback and retainage.
• What "done" means. If a payment is tied to substantial completion, the contract should say what that phrase means on this job. See what substantial completion means.

Before you sign

Read it once without the contractor in the room. The Texas AG says a salesperson should be willing to leave the contract with you. If they will not, that is a reason to slow down, not a reason to sign faster. Match the promises from the meetings to the pages. If a promise is missing, ask for it in the document. The questions that produce those promises are in questions to ask before you sign.

RenoBinder keeps the scope and the payment schedule with the project. One room is free.

This is general information, not legal advice. Rules vary by state; for a dispute, talk to a licensed attorney or your state contractor board.

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