Seven elements to include in your home renovation contract

“A verbal contract isn’t worth the paper it’s written on.” While historians disagree on who came up with this timeless quote, its accuracy isn’t questioned. That’s why when you hire someone to work on your home, you need a written home renovation contract.

Seven features of a good home renovation contract

home renovation contract

A contract can be a simple one-page document or a “contract package” of many pages, depending on the size and complexity of your project. Home owners can review the contract for the following common elements.

  1. Parties to the contract.

    This includes who the contractor is, their name, full address, phone number, email, business license where required, and business/GST number. Who you are, including your name, address (plus project address if different), and contact details, for example.

  2. Scope of work.

    The scope of work lays out work to complete and includes a description of the project; a list of materials and products to use, including brand, name/number, colour, and dimensions; the contractor’s responsibilities spelled out in detail; and the homeowner’s responsibilities. Complex projects require longer descriptions, and details can be added as attachments that are part of the contract.

  3. Project schedule.

    For simple projects, a start and completion date. For larger projects, a detailed timeline that lays out significant project milestones — for example,  completion of the foundation work, framing, and required inspections.

  4. Price.

    The contract sets out the full cost and the payment schedule — this includes everything needed for the project, including labour, materials, subtrades, and fees for permits and waste disposal. The payment schedule on small projects may be an initial modest down payment and a final payment. Larger projects may require one or more progress payments, tied to completion of specific project milestones.

  5. Contractor’s insurance and workers’ compensation.

    A Certificate of Insurance, included in the contract, shows that the contractor is covered if they cause damage to your home, as well as neighbouring properties, or injury to you or third parties. A Letter of Clearance shows the workers have Workers’ Compensation coverage. This is detailed in the contract with a letter attached. Most workers must have this coverage.

  6. Warranty.

    You can ensure the contract spells out the warranty that is provided, specifies what it covers for how long and notes limitations or exclusions.

  7. Other contract elements.

    A contract can contain many other clauses that deal with items like building permits, zoning variances, change orders, and dispute resolution. You can make sure the contract spells them out in detail. Always remember — when in doubt, don’t leave it out; get it in writing in your contract.

This overview is for illustrative purposes only and does not constitute legal advice. Find more information at www.getitinwriting.ca.