ROANOKE TIMES
Copyright (c) 1996, Roanoke Times
DATE: Sunday, July 28, 1996 TAG: 9607300125
SECTION: HOMES PAGE: D-1 EDITION: METRO
COLUMN: Hints for Homeowners
SERIES: (This is the second in a series of three columns dealing with hiring a
contractor).|
SOURCE: STEVE ELDER
A contract is a legally enforceable agreement between two or more parties. The best kind of contract is one that is (1) fair to both parties and (2) explicit. The more explicit, the better. This point cannot be overemphasized.
When dealing with a contractor, you should have a detailed, explicit contract for several reasons. Oral agreements are fraught with peril. People's memories differ. You could get an ``I said this,'' ``No, you said that,'' situation that is impossible to prove one way or the other and has practically no standing in court if it should come to that. It is only human nature to interpret gray areas in your favor. Both contractor and consumer will do this, and there is no faster way to generate bad feelings between the parties. Regrettable though it may be, it is folly to rely on oral agreements and do business with a handshake, even if the contractor has been your neighbor for 15 years.
The construction plans for your deck/addition/remodeling project should be as detailed as reasonably possible. The exact work to be done and items to be built should be stated. All materials to be used in the project should be specified, from the framing at the beginning to the type and brand of paint at the finish.
The same principle applies to ``change orders.'' Any revisions, additions or deletions to the contract, whether made before or during construction, should be made in writing and signed by both parties. This record protects the consumer by documenting the change and protects the contractor by allowing him to charge more if the change means additional work.
The contract should also specify the procedure for handling change orders, including names of the individuals on both sides who are authorized to make a change. You don't want your great-aunt who is visiting for two weeks to order higher windows because she thinks they show proper modesty; and the contractor certainly doesn't want his 17-year-old summer laborer authorizing a free 10-foot extension of the deck because it would look so awesome.
The contract document should be especially precise about money. The payment schedule should be roughly commensurate with the amount of work accomplished. On a large addition, this could mean as many as 10 sequential payments, or ``draws.'' On a small job, there could be as few as three.
You should avoid a large down payment because, among other things, it erodes to some degree the contractor's incentive to start the project on the date stipulated. If the project requires a significant outlay of money for materials (such as kitchen cabinets), that payment should be released when the materials are delivered to the site. Your contractor will want to avoid a large final payment because, understandably, he will not want several thousand dollars held up by some disagreement over a piece of molding. On the other hand, you want to make the final payment large enough to ensure the contractor's interest in finishing the job, ``punch list'' and all. Work this out before the job begins: If your project is large and you are uncertain about the appropriateness of the payment schedule, have an attorney review the contract documents with you.
By federal law, your contract should also contain a notice of your right to rescind or cancel the contract within three days of signing it. A rescission right is triggered if the contractor has a right to put a lien on your home if you don't pay, or if he has a security interest (such as a mortgage) in your home. A cancellation right applies if the contract calls for more than four payments. Both the starting date and the expiration date of this three-day period should be specified.
Speaking of dates, the approximate starting and completion dates of the project should definitely be included in the contract. If for any reason the completion date is crucial and time is of the essence, this understanding should be stated clearly.
If subcontractors are involved, it is advisable to include some language in the contract to insulate you against possible claims from them. The fringes of the construction industry are littered with the wreckage of failed subcontracting businesses stiffed by their general contractor. If your general contractor should fail to pay his subcontractors, they would understandably try to collect from you.
Finally, the contract should specify any other points of individual or mutual interest. If you are providing any materials, such as an heirloom stained-glass insert for the front door, this should be set forth. The same applies for such concerns as use of utilities and bathrooms, working hours and where deliveries can (and cannot) be received.
The short sense of the long speech is: make your contract as complete as possible. The couple of extra hours spent on it up front may save many hours of irritation and grief down the road for both you and your contractor.
(Next: How to get along with your contractor.)
LENGTH: Medium: 88 linesby CNB