More about Understanding Contracts

Read before you sign

Whenever you want to start on a home improvement or renovation project, the first thing is to ask at least three bids from three different reputed contractors. Then, once you have finalized on a bid, draw up a contract. Always carefully read the contract and cross-verify the details with the contractor. This will dispel the chances of misunderstanding later.

Things to consider for a home improvement contract

Some contractors say that they do give utmost importance to an initial contract, and yet since there is also need for flexibility, they only include project details, timeline and payment structure into the contract, thereby keeping open scope for flexibility the project may require.

Generally the homeowners need to make a down payment of one third of the amount of the total cost. If custom materials are required for the project, this amount may go up. However, there are also states where you need only to pay a specific amount (generally around 10 percent of the total cost) at the start of the project.

A consumer review site relates the grievances of a client who did not want to peek too hard into the contract and the company’s reputation out of discretion and as a result, got fleeced badly by the same company.

A written contract detailing all the aspects of the job is thus a critical thing. The contractors, however, appreciate flexibility. One contractor states that they often find new problems cropping up once they start on a project. This happens more frequently in case of older houses. He adds that for this reason he tries to keep his contracts transparent and open, leaving scope for expedient changes.


The main contractor often needs to engage other subcontractors, such as plumbers or electricians, during the job. You must make sure that the contractor is using the right people for these jobs. You should check bonding, insurance and licensing of these subcontractors.

Another important thing is to ask your contractor for lien waivers for the subcontractors. Having the waiver means that you will never be made liable to pay the subcontractors even if the original contractor fails to pay them. Whenever you find a contractor is trying to dodge the issue of providing the waivers, you must recognize that as a red flag.

Like always, it is proper communication throughout the length of the project that ensures a good and satisfactory job. Always detail your requirements to the contractor and never hesitate from asking the questions that need to be asked!

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Author: Irfan Uddin