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If you're hiring professionals to remodel your kitchen, you need to be sure that everyone is thinking, talking, and working on the same page; in other words, you need a signed contract. In fact, you should have a contract anytime you pay someone to do work on your home.
A contract is a legally binding document between you and another individual, in this case a contractor or subcontractor. It stipulates the work to be done, the amount to be paid for the work, and the various responsibilities that both you and the contractor must fulfill. You need a contract to ensure that all parties involved understand their obligations and to make sure that nothing is left open to an individual's interpretation. A contract gets everyone on the same page — both literally and figuratively. As the homeowner, the contract protects you against a dishonest contractor or one who does inferior work. A contract is also the best tool for settling disputes if things should happen to end up in court.
Anyone can draw up a contract for a remodeling project. You don't need to pay a lawyer. Standard blank contracts are available at office supply stores. You can use the actual form from the store or you can use it as a guide and revise it to meet your needs and desires. Be a bit wary if the contractor has a preprinted contract for you to sign. Unless you read every word or have it examined by a lawyer, you could be opening yourself up for current or possible future liability. Draw up the contract yourself.
 | A contract isn't binding until you get the specifics down on paper and both parties sign it. Never rely on a verbal contract. You and your contractor may have a very smooth working relationship, but no matter how much confidence you have in him, always put things in writing and make sure both of you sign. This is the best way to handle any problems that may arise. Be sure the contractor receives a signed copy. |
 | Your contract must include certain statements (clauses) to be legally binding. Be sure your contract includes all of the following points. |
- Who's involved: Your listing of who's who on the project. Make sure you have the contractor's name as well as the name of his business listed. You also need his address and telephone number(s).
If you're hiring a general contractor, then you'll only need one contract with her. It will be her responsibility to work out the work and payment schedule with the subcontractors. If, however, you're the general contractor, then you need to draw up contracts with each of the subcontractors that you hire.
- What's involved: This lists exactly what the contractor will and will not do. This section should also answer the following questions:
• Is the plumber supplying the new kitchen fixtures or are you?
• Is the electrician supplying the light fixtures?
• Who's calling for or ordering the inspections?
• Who's ordering the appliances, cabinets, and so on?
• What brand(s) are acceptable?
• What brand(s) are not acceptable?
- Cost: Be specific as you detail what the project will cost to complete. Outline the payment schedule, including the initial payment date, the second payment date, and the final payment date.
| Many contractors want 25 to 50 percent of the total payment up front to pay for materials, and so on. Never put more than 50 percent down on any remodeling project. A reputable contractor should be able to obtain sufficient operating capital to order and pay for most of the materials. A good guideline to follow is to put 30 percent down at the start and define additional payment amounts and dates within the contract, for example another 20 percent after the completion of the framing inspection. |
- Timetable: Give the project firm starting and ending dates. These can be adjusted as needed, for example if material delivery is delayed. Just remember to get any changes in writing and have both parties sign off on the change.
- Material and equipment: Get a detailed list of all the materials, equipment, fixtures, and so on that are purchased. List the quantity, size, color, model, and brand for each item. This could be a long section, but these details will reduce the chance of confusion or error.
- Change orders: Changes are a part of every remodeling project — whether it's a do-it-yourself project or one for the professionals. If you change your mind about a product, design, or anything else, get the change written down on paper. If the contractor runs into an unforeseen problem —and it happens —get the necessary change/repair in writing. Make sure that the contractor is not charging for "unforeseen problems" that should have been included. Get them to explain why something changed and ask why they didn't anticipate this if you think it's something that they should have known or anticipated. Describe all changes in detail, including materials, anticipated new completion date of the project, and additional charges. Make sure both you and the contractor sign all change orders.
- Warranties: A reputable contractor will usually guarantee workmanship and materials for one year. Some materials and products will carry a longer manufacturer's warranty; so hang onto the paperwork as documentation in the event of future problems.
- Arbitration clause: Even with a contract, disputes can arise. You can avoid having to go to court, however, if you include a binding arbitration clause. If you do find yourself needing arbitration, contact the American Arbitration Association (AAA), which is a non-profit organization that helps people organize arbitration. The AAA Web site has downloadable forms and links and information about regional offices and online filing.
 | - Avoid paying twice: A common and unfortunate problem when dealing with general contractors is that the money sometimes gets from the homeowner to the general contractor, but not to the subcontractors. When this happens, the subcontractors can put a mechanic's lien against your property! Avoid this by including a clause stating that the final payment won't be made until you receive a lien-release form from the general contractor, all subcontractors, and each supplier.
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