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5 Features to Include in Your Home Building or Remodelling Contract

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Whenever you're sourcing for services, contracts are important to protect both your and the service provider's interests. After all, spoken words cannot be filed. A comprehensive contract is important if you're enlisting the services of contractors for a building or remodelling project; it forms the basis for service delivery and conflict resolution throughout your working relationship. Whether you have a two-day or two-year project, there's no downside to having a contract. The article below discusses the most important features to highlight in a good service contract.

1. Scope

Building and/or renovation projects involve many details; therefore, it's important to have everything in writing. This is the best way to ensure everyone understands what is required of them. If you had an architect/designer create plans, the contract should reference both the plans and date in case the finished product does not follow the agreed-on plans. Ensure that the contractor has looked over the plans and approved their workability in writing as well.

2. Exceptions

In the same way, the contract should include exceptions, i.e. the things that cannot be planned for and how they'll be treated. For instance, what should happen if the walls are torn down and asbestos is found there? The contractor, based on his experience, can help you to develop a contingency budget to cover unexpected eventualities. Otherwise, you can state that unexpected events out of your and the contractors' control will be renegotiated with new contract terms.

3. Physical address and licensing

The contractor's physical address should be listed, in case you need to find him once work has commenced and also for your records. Mailing addresses may not help much in emergency situations. Additionally, depending on your region, you may need a contractor with specialized licensing allowing him/her to handle your project. Talk to your local council about getting licensing for the project, as well as the licenses that your contractor should have. The contractor's license details should be written in the contract for verification in case there's a dispute later.

4. Work and payment schedule

Building and remodelling projects can take longer than anticipated for various reasons, some of which are one party's fault and others which neither party can control. Nonetheless, it's important to have the expected job duration and milestone plan in writing, especially if you have a time-sensitive project. This isn't about micro-managing the contractor's schedule; he/she has other projects they're handling. The important thing is for the work to be completed on time and for terms to be established for how various delays will be handled.

Such timelines are also important for financial planning.  Where the contractor is paid according to the progress billing method – commonly used for long-term building projects – the milestones form the basis of payments.

5. Insurance

Construction sites mean the possibility of injury to workers or other people present at the time. If the construction site belongs to you, you may be held liable for injuries thereon unless the contractor has proper insurance protecting his workforce. Confirm with your local council what the proper amount of insurance is, and find out whether the contractor has up-to-date workers' compensation insurance for his employees. The terms should be listed in the contract. You should also account for injuries to non-workers on-site, such as when workers' negligence results in injury of one of your family members.

As you begin your project with experienced building contractors in your area, make sure you have a thorough contract in place that covers each of these issues. It will simplify dealing with any problems that may arise during the project and protect you and the contractors.