Contract is key home-improvement tool

Home Work

June 28, 1998|By Karol V. Menzie and Ron Nodine

OF ALL THE materials that will go into your home improvement project, the one that's most important is made of paper.

It's the contract, and it puts into writing exactly what you and your contractor are agreeing to. The contractor agrees to build something, and you agree to pay for it.

It sounds simple. He agrees to remodel a bath, you agree to pay for it. But the contract is where your expectations and his actions are placed in sync.

A surprising number of people start remodeling projects with little or nothing in writing. On very small jobs it may be possible to do that and not have a problem, but on larger, more complicated projects it's different. There are too many variables to be left to memory, and whose memory are you going to trust? You're positive you said to tear out the back wall, but the contractor insists you said tear out the side wall. Who's right?

Putting everything in writing helps avoid misunderstandings.

A remodeling contract should contain certain elements to protect both parties. If you are offered a contract that seems one-sided and you are not comfortable signing it, don't. Have an attorney review it for you first. It's also a good practice to get a copy of the contract a few days before signing so you can read it at your leisure.

Legal requirements for what is required in a contract will differ from state to state and from locale to locale.

Maryland law requires that a home improvement contract be in writing and be legible, describe clearly each document that it incorporates, be signed by each party and contain the following elements:

* The name, address and license number of the contractor.

* The name, address and license number of the salesperson, if applicable.

* The approximate start and substantial completion dates.

* A description of the work to be performed and the materials to be used.

* The agreed amount and schedule by which payments will be made (including finance charges if applicable).

* A description of any collateral security.

* A notice that gives the phone number of the Home Improvement Commission and states that each contractor and subcontractor must be licensed by the commission and that anyone may ask the commission about a contractor.

* A notice that the customer has the right to rescind the contract within three business days after signing by notifying the contractor in writing.

* Before the work begins, the owner shall be given a copy of the contract signed by the contractor.

State law also stipulates that the maximum deposit allowed by law is one third of the total contract price.

In addition to what is required by law, the contract should contain language on how changes and additional work will be dealt with, how disputes will be settled, what happens if pre-existing conditions, such as termite damage, are discovered, and who is responsible for what insurance during construction.

Specifications of what work is to be done and what materials will be used should be as detailed as possible.

The law requires only a general description, such as "five windows will be replaced," but the contract should stipulate which windows, where they are, how the interior and exterior finishes will be dealt with, and any other considerations, such as what brand and style of windows will be used. (In some cases it is helpful to state what is not being done -- for instance, 15 other windows in the house will not be replaced. Or if the owner wants to do some of the work, such as painting, that should be stipulated as well.) Never accept a vague description; always be specific.

The more detailed the work description, the less chance there will be of a misunderstanding.

Next: Preparing to start the work.

Ron Nodine is owner of American Renovator, Inc., a Baltimore design-build remodeling firm, and current president of the Remodelors Council of the Home Builders Association of Maryland. Karol Menzie is a feature writer for The Sun.

If you have questions, tips or experiences to share about working on houses, e-mail Ron at henovator.net or Karol at karol.menzialtsun.com. Or write c/o HOME WORK, The Sun, 501 N. Calvert St., Baltimore, Md. 21278. Questions of general interest will be answered in the column; comments, tips and experiences will be reported in occasional columns.

Pub Date: 6/28/98

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