Monthly Archives: September 2013

Once you’ve done all your homework and decided which contractor you want to hire the next step is signing the contract.    Ideally, you want to have an attorney review the contract before you sign it.  However, I know that isn’t always realistic so the following highlights the most important terms of a residential construction contract.

• Scope of work – The contract should say exactly what work the contractor is to going to perform.  You should carefully review this section before signing to make sure the contractor is doing all the work you want them to do.
• Contract price – There should be an agreed upon contract price for the defined scope of work.  There should also be a payment schedule listing when payments are due.  You should never agree to make final payment until the contractor has finished all the work and obtained final inspection.
• Change orders – Inevitably the contractor runs into an issue which they will claim is “change order” work.  This construction term means the work is outside the scope of work and the contractor won’t do the work without additional money.  This is why the scope of work clause is so important.  The contract should say that all change orders must be in writing and signed by the homeowner.
• Schedule – You should make sure the contract includes a written schedule that lists when the contractor is going to start the work and includes an estimated completion date.  Unless the contract includes a completion date, the contractor is legally obligated to complete the work within a “reasonable time” which is extremely vague.
• Releases – The contract should require the contractor to provide a written release in exchange for all payments.  The release is a written document from the contractor which confirms receipt of payment and waives the contractor’s right to make claims against you for the acknowledged payment.   You should also require the contractor to provide releases from any suppliers and subcontractors working on the project.  In most cases, you won’t know if your contractor has hired any suppliers/subcontractors so you should request a written list of all other companies that will be working on the project.

You will never be able to anticipate everything that can come during the course of any project but by following these tips you are putting yourself in the best position to negotiate any unanticipated problems.

A few months ago my family bought a home in East Hollywood (where we previously lived for 7 years) after spending two years in Cooper City.  We were so excited to be moving back to the neighborhood we missed so much.   Adding to our excitement was that our new home had a swimming pool. My oldest kids, Owen and Stella, have never had a swimming pool so one of the highlights of their summer was swimming in the new pool.

Unfortunately, this past weekend we discovered a leak in our pool.  Once we got over the initial disappointment we quickly started looking for a reputable company to inspect and repair our pool.  I know from my practice and speaking with neighbors that homeowners usually have very little idea how to go about hiring a contractor.

The following points are what I consider to be the most important things for you to consider when hiring a contractor to perform work at your home:

• First, you should ask for referrals from friends and neighbors.  In this social media era, the odds are you will find at least two or three referrals from your group of contacts.
• Always meet with multiple contractors.  You probably looked at multiple homes before you bought your house.  You need to do the same homework to make sure you hire the right contractor to protect your investment.
• Ask for verification of the contractor’s license.  Every contractor is required to have a license from the State and/or County.
• Obtain proof of insurance.  The last thing you want to do is hire a contractor and then have someone get hurt on your property and have the injured worker sue you because the contractor didn’t’ have the appropriate liability/workers compensation insurance.
• Last, make sure you got a written proposal from the contractor.  If a contractor isn’t willing to provide a written estimate then this is an immediate red flag to stay away.

Stay tuned for the next post when I tell you about making sure you have protected yourself in the written contract.