Contracts and Contractors
When you are working with a professional contractor, you need to make sure that there are quite a few different things outlined in a written contract. This will protect both you and the contractor from each other in case one of you is dishonest in any way. It will serve as a legal way to rectify problems that should arise during or after the home is completed.
Some contractors might propose that you sign what is called a “time and materials” contract instead of a contract that offers you a fixed price. This is usually not a contract that you will want to sign because of the hazards that can occur concerning both the time required and the materials needed. The contractor will charge you only a percentage of the cost of the materials and the labor necessary to complete the work, however, you will bear the risk of the possible change in the cost of materials. If an unforeseen problem arises, your home could take much longer to complete than you originally thought. Most of the time, a fixed-price contract will protect you from having to bear these cost and time increases.
When you sign a contract, you should be aware that you need to include any and everything that you expect the other person to do. This should include the dates that the project will start and approximately when it will be finished. The right to settle a dispute by arbitration can be less expensive than a court appearance by both parties and the contractor should not hesitate to give you a one year warranty at the very least on all the labor and materials used to build the home. Some states will even require the contractor to give a warranty on his work for the period of at least five years and even a ten year warranty if hidden problems are discovered later on. This will force the contractor to pay for any water damage or mold damage that may occur to your home after the warranty is put into effect. Since mold damage is not generally covered in homeowner’s insurance policies, making sure your contractor will pay for it is something you will want very much.
Specify a payment schedule in the contract that you have drawn up. The payments need to come from you in phases and as an incentive for your contractor to do a time efficient job, you could also add a bonus for completing the project early. To discourage your contractor from doing a bad job and taking too long to complete it, you should also add a penalty clause for completing the job later than expected.
Choose exactly what materials you want the contractor to use and specify these in the contract.
