Tips & Tricks
What Should Be Included in a General Contractor Agreement?
You’ve done your due diligence and selected a remodeling contractor. Congratulations! The final step in the planning phase is the contract signing. A contract is a must for any home renovation work. It’s a legally binding document that outlines a contractor’s responsibilities and project details.
A contract not only sets expectations about the project and timeline, but it protects both you and your contractor if things don’t go as planned. Weather or shipping delays, change orders, and payment miscommunications are a few examples of things that could derail your project if they’re not properly documented. Here's what you need to look for in a general contractor agreement.
The first part of the contract should list your general contractor’s business information. Items to look for include:
- Telephone number
- Legal name
- License number
- Insurance information
Make sure the document specifies a physical location even if the business uses a post office box for written correspondence. If something goes south with your contractor and you need to take them to court, you'll need a physical address to serve a subpoena.
Comprehensive Project Description
Your name and the project location should also be listed near the top of the contract. This portion of the contract should begin with the overall scope of the project and end result. The various construction phases are often included here, too, along with architectural plans and contractor-owned equipment that will be used.
You’ll want to ensure your contractor also includes a detailed materials list to avoid any misunderstandings and miscommunications. From flooring to fixtures and everything in between, get it all in writing. Each item description must include:
- Brand name
Detailed Work Schedule
Knowing what’s going to happen and when throughout the project is a must. Clear start and end dates for each phase will tell you the days with the most upheaval so you can plan your schedule accordingly. For example, a construction timeline helps you avoid scheduling important work meetings on demolition day or workers showing up unexpectedly during a family dinner.
A work schedule will list the start date and precise time of day that workers will arrive and leave the job site. Non-work days like weekends and holidays should also be listed here.
Any project details that don't fit neatly into any other category should be included in this section. You’ll want to put in writing whether workers may use your restroom or a contractor-provided portable toilet. Cleanup is important, too - how the site should be picked up at the end of each workday and once the job’s completed must be spelled out as well.
Other items that are often in this section may include:
- Workers’ breaks and lunch break times
- Location of breaks and lunch breaks (whether they are allowed on the property or not)
- Worker parking location and any parking permit requirements
- Subcontractor payments to be the contractor’s responsibility
Your contractor will have policies around when and how they are paid throughout your project. Payment schedules may differ from contractor to contractor, but most will specify the total project cost and payment details. An outlined payment schedule also helps manage expectations and keeps everyone on the same page.
Things like the project's overall cost and details of when payment obligations should be met will be outlined here, along with what happens if terms aren’t met. Contractors vary in how they collect payments for customers. For example, some require a percentage deposit of the estimated cost upfront and bill in multiple stages as the work is completed. Others may ask for a deposit before they order materials and invoice at completion or when you’re able to live comfortably in your home. Whatever their payment terms may be, be sure they’re spelled out in the contract.
Additionally, if the renovation project is contingent on securing financing (a home improvement loan, for example), there should be a clause that nullifies the contract if it falls through. It’s also common for contractors to place a mechanic's lien on the property as a condition of agreeing to do the job, which allows the forced sale of your home should you decide not to pay them for their work.
Changes to Scope of Work
You selected what you thought was a gorgeous tile pattern for your bathroom remodel, only to be disappointed in the color when the shipment arrived. You want to switch it out with something else, and your contractor comes back with an unexpected fee. It’s ok to have a change of heart about a feature or fixture during a project but keep in mind it usually translates to an increased cost for you and a late completion date. Your contractor will outline their policy and fees around change orders here.
They should also document what happens if changes to the project’s scope come about due to things outside of your control, like permitting requirements or unexpected site challenges that require changes to the design or construction.
Conflicts can happen even with a great general contractor and tight contract. Your contract should make it clear how disputes will be handled. Arbitration is common in construction contracts, which means you would submit your complaint or issue to a neutral arbiter or third party for review and resolution.
A solid contract is the foundation for a successful home improvement project. Read through each section carefully so you understand what to expect (and what’s expected from you) and avoid misunderstandings. If anything’s unclear, hire an attorney to review the contract on your behalf, offer suggestions, and negotiate where appropriate.