Whether you’re making improvements to the home you share with your family or to a fixer-upper you purchased to rent out for extra income, starting a new home improvement project is always exciting. Homeowners often hire contractors to carry out big renovations for them. These renovations, particularly in New York City and the surrounding counties are extremely expensive. Despite this, most people don’t invest the time or money to protect themselves with a robust contract. In some cases, there is no contract in place at all.
In our work as construction litigators, the attorneys of Bergstein Flynn & Knowlton PLLC have seen just how much damage and frustration a flawed or incomplete contract can result in. To prevent stressful disputes, we recommend including the following critical clauses in your home improvement contracts:
What is the total cost of the work to be done? How much will be paid upon signing and how much will be paid upon completion? The contract may provide for incremental payments over a period of time. However you’ve agreed that payment should occur, the terms need to be outlined in detail in your contract. Many construction contracts are paid out in phases. Each phase should be very clearly stated with mechanisms in place to resolve disputes over payment. Speaking of disputes…
What steps will either side take if there is a dispute? Most contractors will include an arbitration clause in their agreements. We recommend pushing back against this clause. In the event of a dispute, your attorney would have more flexibility in deciding how to resolve it. Flexibility creates leverage. Leverage creates opportunity – both at the negotiating table and in the courtroom.
We also recommend including a provision stating that if either party violates the terms of the contract, they will have to pay for the other side’s legal fees. Litigation can be expensive. An attorney’s fees provision might make it more worth your while to pursue breaches of an agreement.
Who is responsible for paying if unexpected costs arise? Make sure your contract delegates this responsibility in very clear terms. Like with payment, be certain that there are provisions for resolving disputes in the event each side is pointing its finger at the other.
Your contract needs to be very specific about the work that will be done and over what period of time it will be done. Home improvement contracts will often include a schedule of work. That schedule should be as specific as possible with a corresponding timetable of when the work will be completed by. Such a schedule will prevent delay. In addition, there should be clear penalties and/or other remedies for unreasonable delay. Often our clients need work done by a certain time for a certain purpose; for instance, they are seeking to rent their home out by a certain date. Indicate as much in the contract. In the event the contractor later argues that they were unaware of the urgent nature of the work, there will be a clear provision in place which undercuts the argument.
These are just some of the many important provisions to include in a home improvement contract. AIA provides solid form contracts that meet industry standards. Even if you use these or other comparable agreements, however, it is essential to have an attorney review the agreement before it is signed. An experienced attorney can make sure the form document meets your actual goals while protecting you and your family in the event of a dispute.
The Bergstein Flynn & Knowlton team is here to help. We have extensive experience helping clients ensure that their contracts protect them to the greatest extent possible. Contact us today to schedule a free consultation, and to find out more information.
