Get it in Writing – Dealing with New Home Construction Contractors
Sunday, December 6th, 2009
Award-Winning Traditional House Plan - HPG-1752-1 - The Remington
How many people have dealt with contractors without getting a signed contract only to say later on, “I wish I’d got that in writing”?
Far too many to count, and you may be among them if you are having work done on your property or having a new home built – without proper contracts in place.
A contract is your “ace in the hole” when it comes to dealing with shady contractors or those that try to tell you one thing and then do another!
Even for the most simple home improvement projects, when you hire a general contractor to make the project go along more smoothly, you still need a written agreement with the contractor.
Let’s look at some tips to keep your project from turning into a money-pit and what you should do before you hire a general contractor.
Signing on the “Dotted” Line
When hiring your general contractor to build your new 4 bedroom house plans, find out if he or she have their own contracts, or if you need to draw one up – either way is fine as long as both of you agree to and understand the terms of the contract.
If the contractor has his own contract, make certain that you read through the entire contract and that everything in the contract is something that you are willing to say “yes” to; if not, make sure that you go back to the drawing board and have the contract revised before you sign it. The contract between you and your general contractor should cover all of these very important points:
- Spell it out. No matter how minute or unimportant something may seem, you want to make sure that you have spelled everything out for the contractor, including your name and address, the contractor’s name and address, the exact specification of what work is to be completed and so forth.
Everyone involved needs to be able to look at the contract and determine that everything is completed at the end of the project so that neither you nor the contractor is surprised at the end of the process building your small house plans.
It is completely legal for the contractor to demand more money for work completed that is not within the scope of the original contract, so make sure to spell it out before the work is started so that you don’t end up paying extra.
- Itemize all materials. Your contract should include an itemized list of everything that the contractor plans to use for the project. Do not use phrases that are non-specific of a particular cost or item, such as the phrase ‘of equal value’.
This gives your contractor more room to pocket the difference between an item that you plan to pay for and something that may cost less but is considered to be of an equal value. Your contract should state that any substitutions require your prior approval.
- Arrange for milestones. You should outline the milestones for the project, and the date that certain parts of the project should be completed by, along with a payment plan of a certain percentage of the project’s total cost to be paid at the time the milestone is reached.
The reason that milestones are so important is very obvious; many contractors will ask for a percentage of money upfront, and you may not hear from them for long periods of time. For this reason, make sure that the contractor understands that work must be completed in a timely fashion to qualify for payments under the milestone plan.
- Penalty section. While not legal in all states, a penalty section is a good idea to protect you against problems that may arise if the work completed is not up to code or to your specifications.
You can also include a penalty for late work that is not completed according to the milestone payments plan – but you will need to make some considerations for inclement weather or circumstances beyond the control of the contractor.
- Always triple check your contract before signing it. If possible, have an attorney review contracts for especially large projects, and to make sure that the contract is legally binding in your location.
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