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Renovation Project: 3 Reasons to Sign an Official Contract

Last modified: 2022-09-07 | Approximate reading time 4 mins

Finally, the renovation you’ve been dreaming about for months is underway. You’ve taken the time to carefully choose materials, design the new layout and hire a trusted contractor and team. Now, before any work actually takes place, it's crucial to consider a major step in any home renovation; signing the official contract. 

A renovation contract is often overlooked or treated as though it isn’t necessarily important. However, if an issue were to arise during the renovation itself, an official contract will save both you and the contracting team a lot of anxiety, money, and stress.  We’re here to lay out the reasons why you should always sign a renovation contract.

3 reasons to sign an official contract during a renovation project

Why is a renovation contract important?

At the base level of any renovation project, you want the home that was promised to you and you want to pay your contractor for the result they promised to offer. A contract will directly highlight and reflect this in a way that speaking about the work does not guarantee it will get done. Having an outline of the work in writing offers a way to avoid disagreement in all stages of the process. 

In many cases, your contractor will draw up a contract that will be ready for you to sign. If this doesn’t happen, we’d suggest drafting one yourself with the guidance of a professional attorney. Remember, having a contract is meant to protect you, your rights and your home. So, if your contract presents you with something that you don’t understand, take the time to know what the terms and conditions mean, or discuss drawing up an alternate contract with something that is easier to understand. Below, we’re going to highlight some commonly disputed issues in construction contracts.

house plans and renovation materials_Renovation Project: 3 Reasons to Sign an Official Contract

1- Scope of work

In a renovation contract, the scope of the work lays out what the contractor has agreed to take on. In many cases, not only does this mean the work itself but also refers to permit applications, and in some cases, the acquisition of materials or any other functions necessary to complete the job. Alongside this part of the contract should be layout plans and specifications. 

It’s quite easy to overlook conflicting terms when it comes to the contract, the house plans and what’s been discussed. Disparities between these things can lead to confusion and disagreements. In all cases, the contract should be the controlling document, making it fundamental in a case where renovation plans don’t match with a previous discussion.

2- Keeping on top of the timeline

The timeline of your project is another crucial reason to have an official renovation contract. It’s likely you’ve heard stories of renovations running off schedule, and the frustrations that come along with this. Especially if the project is large in scale and you’re not able to live in your home for its duration, it’s important that things stay on track. Not only this but as they say “time is money.” The longer the project takes, the more it’s going to cost. Thus, having a timeline in writing will allow you to protect yourself against consistent or major delays.

Be sure that the contract contains the following information:

  • Date of the start of the project;
  • The schedule of the work to follow;
  • Tentative date the work will end.

Of course, there are some instances where delays or extensions will be necessary:

  • Poor weather;
  • Inspection or permit delays;
  • Changes to the scope of the work;
  • Material delays.

Person caulking around door_Renovation Project: 3 Reasons to Sign an Official Contract

3- Payment

The payment schedule is very important in the grand scope of any renovation project. In many cases, your contracting team will be relying on payment to carry out the work and keep things on schedule. An initial payment or deposit may be required before any work takes place. However, be sure to know your rights and stay safe with the deposit (check out our article on the subject). 

Following this, it’s crucial to have a payment schedule in writing so that there are no disputes regarding money during the length of the project. This is especially important when it comes to the terms of the final payment. The terms of what “substantial completion” look like should be properly laid out in your contract, and this will include when the last payment will need to be paid by; ie. 14 days after substantial completion the final payment is expected.

Let’s mention here that during the scope of a renovation project, it’s possible for the work to change or shift. Of course, this is going to affect payment. Thus, your contract should account for the possibility of any changes during the renovation. Also, for any changes the contractor needs to make, there should be written consent before any work is carried out.

someone writing on a contract_Renovation Project: 3 Reasons to Sign an Official Contract

Other ways to protect yourself during a home renovation

  • Make sure your contractor has a license and insurance;
  • Check your contractor's references or hire someone based on a trusted recommendation;
  • Review the contract multiple times, have an additional source look it over;
  • Negotiate when you feel it's appropriate.

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