In the construction industry, a contract is every contractor’s best friend. They protect you on the front end, defend you on the back end, and manage a clear set of understood expectations between you and the owner. However, many construction business owners don’t realize that there are different kinds of construction contracts, and residential contractors cannot use the same kind of contracts that commercial contractors would use and vice versa. In this series, we are covering the four most essential, need-to-know construction contracts. Today, we’ll dive into the essential residential construction contract, commonly referred to as a Residential Remodel/Repair Contract.
Contract Options for the Residential Contractor
A residential remodel/repair contract is like a bulky Terms & Conditions contract. Usually, this kind of contract is used by a contractor on a residential project for at least two weeks, up to any additional length, and working directly with the homeowner. However, it is important to know that this kind of contract does not work for a new build. If you are going to work on a new build construction project, you will need to have a residential new build contract or a prime contract created. We’ll be discussing prime contracts later this month.
Usually, a residential remodel/repair contract has milestone payments, as well, due to their duration. This means that, at each progress point of the project, you get paid a certain dollar amount instead of waiting until the end of the project. These contracts are usually around 10 – 20 pages and contain many provisions and clauses to protect your company from potential issues while on the job. These extra protections make this kind of contract much more reliable for longer projects.
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Details of a Residential Remodel/Repair Contract
In addition to the requirements for the State you are doing the work in, and the basic protections covered in a terms & conditions contract, the residential remodel/repair contract is far more in-depth. It includes clauses detailing change orders and the processes the homeowner must follow to add to the scope, schedule essentials and conflicts, milestone payment plans, and more CYA clauses such as estimate deadlines, ejection clauses, and clauses that protect against uncontrollable circumstances. Because these projects are set to last longer, this contract type accounts for changes in the job site’s conditions, weather, and potential material cost increases. These elements tend to affect longer-term construction jobs significantly, so they are heavily considered when contract professionals create a residential remodel contract.
Usually, a residential remodel/repair contract also has places throughout the document that ask your client to sign their initials to acknowledge important clauses, project details, scheduling requirements, and so on. While these locations may not be on every page, they are a relatively foolproof way to make sure folks are going through your contract and a sure way to build a confirmed paper trail of the agreement to your terms and expectations. That being said, always ensure you check all the areas requiring a signature in your contract to ensure your terms are fully accepted. This contract is built to protect you in the long run, so do your part to ensure it works for you and not against you!
Do You Need a Construction Contract?
Are you a residential contractor in need of a construction contract? Look no further; our residential remodel/repair contract may be the right fit for you! Especially in residential construction, it is imperative that you have an airtight contract protecting your work and setting expectations for your pay. Your work should never be done for free or taken advantage of. Understanding what kind of construction contract you need and getting one custom created for your company is a necessary step in prioritizing that protection. If you want to have a residential remodel/repair contract created for your construction company, our skilled team of construction attorneys can make one for a flat fee. In our next blog, we’ll discuss an incredible contract for GCs, the Master Subcontract Agreement.
Knowing how to protect yourself best is essential, especially when growing your business, and having a team to support you when you’re facing the potential of getting sued is a huge advantage. The Cromeens Law Firm team is here to help keep you out of the courtroom on the front end or help you win the fight inside of it. Contact us today and set yourself up for success with the support of a legal team.
This article is intended as a general educational overview of the subject matter and is not intended to be a comprehensive survey of recent jurisprudence, nor a substitute for legal advice for a specific legal matter. If you have a legal issue, please consult an attorney.