The Importance of a Good Building Remodeling Contract

Whether you remodel or you are building your home, the most important step of any project is to have a well written contract. So what makes a good contract? A good contract is one that is fair to all parties involved, covers all the issues and leaves absolutely nothing to chance.

There are many excellent remodeling contractors that do superior workmanship and make a home remodeling experience both effortless and enjoyable. These contractors generally belong to the Builder's Contractor Association, are licensed, have a list of happy customers and know the importance of a good contract.

Some states however, do not require remodeling contractors to be licensed or bonded, and consumers are at risk for fraud or inferior workmanship. For those times especially, a solid remodeling contract is critical.

When we hired a remodeling contractor to refurbish a rental property, we let our friendship get in the way of preparing a proper agreement. 14 months later, our rental house is still under construction, and looks to be heading into yet a second winter without walls and a roof.

We hope that perhaps it will be finished by next spring, although we're not sure. Foolish us, we are remodeling this thing with a loosy goosy contract that isn't worth the paper it was written on. In the meantime, we're making payments on a property that is not generating any income, and is draining us financially with repairs that are far in excess of what we were told.

The components of a good contract

Through our experience, we've learned a few things when it comes to what makes for a good contract or not.

A good remodeling contract should have a beginning date and a stop date with the total cash price clearly listed. It should also include a clause which addresses any delay caused by labor shortages, lack of materials, or inclement weather. These delays can and do happen, and are often out of the contractor's control. However to protect the homeowner, the circumstances of these delays should be spelled out in such a way that the owner can terminate the contract if the delays continue indefinitely.