Home Improvement Contracts

If you’re looking to improve your home, at some point you will be working with a contractor.  Many people are understandably nervous about entering into a construction contract.  It’s an often expensive, and almost always disruptive, project to get involved in, and people share horror stories of the terrible contractors who overcharged them or left them with a half-finished home.

When you’re looking for a contractor, you should look not only at the hard information (Are they licensed, bonded, and insured?  Do they have experience with this type of work?), but also the soft.  Get recommendations from people you trust, and preferably who have personal experience working with the contractor.

When you’re selecting a contractor, you typically get several bids to choose from.  You’re not a government agency, which means you do not have to take the lowest bidder.  And in particular if one bid is substantially lower than the others, you may want to avoid it, because it may not be realistic.  Remember, you do get what you pay for, and if it seems too good to be true, it probably is.

When you’re actually looking at the home improvement contract itself, there are a number of items that should be present, according to the Contractor’s State License Board (California).  These include:

•              The contract must be in writing, and signed by all parties to the contract

•              The name, address, and license number of the contractor must be present

•              The approximate dates when work will commence, and a definition of substantial commencement

•              Date when work will be completed

•              A description of the work to be done and description of materials and equipment to be used and/or installed

•              The agreed payment for the work

•              The deposit amount (cannot exceed $1000 or 10% of contract price, excluding finance charges, whichever is less)

•              A schedule of payments showing amount of each payment in dollars and cents.  At no time may the contractor receive in excess of 100% of the value of the work completed to the date of payment.

•              A statement that, upon satisfactory payment for any portion of work performed, the contractor shall furnish a full and unconditional lien release for the portion of work to which the payment applies.

These and other items are required to be in the contract for your protection as a consumer.  However, they are no substitute for choosing the right contractor in the first place.  With the right team and attitude, your home improvements can provide you with happy living for years to come.