Texas Cash Back Real Estate Jill Aylwin - Real Estate Broker, Realtor, MBA E-mail: jill@texascashbackrealestate.com     Ph: (281) 334-CASH

  The Contract

The contract is a critical document because it spells out the scope of work to be performed, the responsibilities of each party, and the remedies for resolving disputes. In many instances, contracts used for home improvement purposes are pre-printed form documents; nonetheless, the guidelines below are still applicable, and you should ensure that the contract adequately protects your interests and not just those of the contractor. Before the contract is drafted, discuss with the contractor the details to be included.

Once the document is prepared, read it carefully. As you review the contract, ask questions and make sure you understand it before you sign it. This is a binding agreement, so you may want to consider having an attorney review it. A reputable contractor will not attempt to force you to sign a contract on the spot or say that the price will change if it is not signed right away. Be aware, however, that the contractor's estimate will be valid for only a specified period of time (for example, 30 to 60 days), as a protection against potential changes in the price of supplies or labor.

The cost of the project should be itemized to show the cost of all building materials, decorative finishes and labor, and the contract should specify whether any supplies or materials are not included. For example, if you wish to purchase your own light fixtures, the contract should indicate that you will supply them and that the contractor will install them.

The contract also should include a payment schedule that spells out when the contractor will be paid and any requirements that must be met prior to disbursement. Some contracts split the payments into three installments of 30 percent each with a final payment of 10 percent, plus the cost of any change orders. There also should be a provision that allows you to withhold payment if certain conditions, such as completion and quality of work, are not met. Among the other issues to cover in a contract are:

• the start and end date and hours the contractor typically will work (including whether any of the work will be routinely completed after hours or on weekends);

• guidelines on who will order supplies, obtain building permits, and make decisions on minor and major project changes. (Will you or the contractor be picking up supplies or will they be delivered? Do you want to approve all structural and design changes that arise or give the contractor authority to make decisions on certain technical changes? Who will be responsible for checking deliveries to ensure that all the materials arrive safely and as ordered?);

• whether the contractor is required to remove construction debris and/or clean the job site at the end of each day;

• provisions for handling unavoidable delays; and

• provisions for terminating the contract.

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