If you've ever had the need to hire a contractor for a project, you've probably signed a contract. Do you remember what was included in the contract? Did you read through the entire contract from start to finish? Do you know what every clause meant and intended to protect against? Did you agree with the terms before you signed it? If not, consider these tips on what to look for before you sign your next contractor's contract.
What to Look for in a Contractor's Contract:
1. The Written Element: This is the most basic element of any good contract - it must be in writing. It doesn't matter how trustworthy the contractor sounded or who referred them or whether or not they have a good handshake. There must be a contract in writing.
2. Proper Licensing: Make sure that a valid contractor's license is listed on the contract. At the very least, this will indicate that they have done the appropriate paperwork and they are willing to play by the rules.
3. A Physical Address: It's a good idea to request to drop off the deposit at the physical location listed on the contract if it's the first time you've ever conducted business with a contractor. You can't track anyone down at a P.O. Box. Make sure that there is an actual, valid, physical address on the contract that you sign for the work.
4. Appropriate Insurance: Any construction site can become the site of an injury. When it's your work site that could mean that it is your home or your office or your rental property. If this occurs and the contractor you hired does not have the appropriate insurance in place, you may be held liable.
5. Scope and Duration of Work: Make sure the details of the job are listed in the contract. It's the only way to keep everyone on the same page regarding what is expected. In some instances, projects can take longer than expected for completely valid reasons, but put an expected "duration" in the contract to pin things down and have an agreed upon timeline.
6. List of Exclusions: If you're looking at a good contractor's contract, you'll be able to find a list of exclusions. These could potentially include items such as: areas of the renovation that are not visible until walls are demoed or opened up, the amount of cleaning that can be expected upon job completion and at end of day, etc.
7. Payment Schedule: Always agree on how much and when payment is due before the job starts. There's no use getting tied into a job or a contractor if you don't agree on the charge or the required payment dates. And it's just as dicey to get into a construction project with a contractor with whom you have no payment arrangements in writing whatsoever.
8. Warranty for Work: The standard warranty for work in this industry is one year from completion.
If you still have questions about a contractor's contract or if you need assistance negotiating terms for an upcoming development or project, please get in touch with the experienced southern California real estate attorneys at The Law Office of Retz & Aldover LLP.