Things to look for in a construction contract.
Contracts and Warranties
A contract is a document that clearly states the expectations and responsibilities of the parties involved in a project and protects each party’s rights concerning the project. The signed contract is legally binding, but it should really be considered a statement of trust between contractor and homeowner. Do not rely on oral agreements. Projects differ; we recommend you seek legal advice for all contracts. A contract should contain the following:
Scope of work. The contract should clearly define all work that is to be done. This includes, but is not limited to, the overall scope plus individual aspects such as foundation, framing, plumbing, electrical, roofing and all finish work down to the color of the paint and brick. A budget of what can be spent on hardware, appliances, windows and doors should be listed.
Materials and equipment. Make sure the contract identifies all materials and products by name, style, quality, weight, color, brand name and any other pertinent facts. Be specific about all details that concern you. If you expect 2×6 walls instead of 2×4, make sure they are specified. Make sure you understand the size of furnace and air-conditioning unit that is being installed.
Schedule. Clearly indicate the date the job will begin. Discuss with the contractor when the project will likely be finished and see if that meets your expectations. Contractors often work on more than one job at a time, so discuss what conflicts, if any, might arise with your project. Ask for an estimated completion date in the contract. Keep in mind, there are numerous factors that can delay a project, such as weather, change orders, and unforeseen problems. Few contractors will agree to sign a contract with a late penalty clause because many unexpected factors can come in to play. Keep open communication with your contractor through the building process to determine if the project is progressing on time.
Insurance. The contract should state that the contractor will provide proof of all required insurance coverage such as general liability and workers’ compensation for his own employees. The contract should also verify that the contractor will require subcontractors to have their own required insurance.
Warranties. Items to look for in your warranty are 1) The settlement procedure in case of a disagreement between you and the builder. 2) How and who to call if an emergency arises. 3) A listing of all items covered under the warranty. Make sure warranties provided with any appliances, equipment or materials used in the project are given to you.
Be sure to read through your contract carefully for the warranty the builder provides. Whatever the contract offers in warranty protection is the warranty you will be provided. Do not assume that there is a one-year implied warranty or extra coverage.