Contractor Agreement Forms: The Fine Print

Contracts for home building or remodeling can be difficult because they have so many components. This article contains the smaller details of a contract, or the fine print. These are just as important as the bigger issues, but they are often overlooked.

Contract Cancellation
In nearly all cases, a contract may be canceled within three days after you've signed it. Simply send written notice by registered mail and request a signed receipt from your contractor.

Conflict Resolution
In order to prepare for unresolvable conflicts between homeowner and contractor, contracts should include clauses specifying what forms of arbitration should be conducted and by whom.

Mechanic's Liens
It is not unusual for contractors to place a mechanic's lien on a homeowner's property at the time of contract signing. This is a legal claim to real property until a debt is paid. If you aren't comfortable with this, make sure the appropriate language is in the contract forbidding it.

Subcontractors may also place liens on a property in the event that the contractor fails to pay them. Make sure that you get waivers signed by all subcontractors as they complete their work.

Before making final payments to your contractor, have him or her provide you with a final release and waiver of any mechanic's liens. These come in two forms: conditional and unconditional. A contractor will give you a conditional release in exchange for payment in full by personal check. Once the check has been cashed, the release becomes unconditional. An unconditional release can be immediately secured by paying in full with a certified check.

Warranties
Make sure the written guarantee on both labor and materials is included. This warranty should include the name and address of the party who will honor the guarantee. Also, the contract should stipulate if it is either a "full" or "limited" warranty. An average warranty for labor is for a minimum of one year. Require that you be given all written warranties provided with any appliances, materials or equipment used in the project.

Punch Lists
A punch list is a running tally of all outstanding items related to the project that the contractor must address. Include in the contract a clause stating that both the homeowner and the contractor must sign off on all items detailed on the punch list before the project can be deemed complete.

The Brass Tacks
The brass tacks, so to speak, are those little details that can make the difference between a positive experience and a homeowner's nightmare. While there are innumerable things that you could address, here are some specific issues worth mentioning:

Project clean up: Will workers clean up everything at the end of each day? Will clean up require special effort, and at additional cost? Which party is responsible for additional cost incurred?

Equipment on the property: Will heavy machinery damage pavement, patios, lawn, etc.?

Debris removal: Who is responsible for removing project-related debris from the site, and what is considered removal? Is the curb or alley sufficient?

Toilets: Can workers use your home's toilets, or will you require portable toilets?

Telephone: Can workers use your home phones?

There are plenty of others, but think through and address every way in which your life and home could be affected by a major project prior to signing a contract.

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