By Sarah Caron, Director, Renovation SERVICES, CHBA
The most important tool for a renovator is a written contract. A fair and comprehensive contract is the foundation for a positive renovation experience for both you and your clients. It helps build their confidence in you and can prevent misunderstandings and false expectations.
A proper contract is not optional for a professional renovator. Whether you are a one-person company performing small repair jobs or a large design-build firm focused on upscale, whole home renovations, you always need a solid contract. Your contract protects you and allows you to take legal steps if required.
A renovation contract is a legally binding document that must conform to certain legal standards and practices. It will form the record of the agreement between you and your clients. While there is no single, set format for a renovation contract, here are some important considerations:
• Use the same contract template or form for every project. This will help ensure that nothing is missed or forgotten.
• Appendices are often used to provide additional details that are specific to each project. These carry the same legal weight as the main template or form.
• The contract should be inclusive and detailed, covering every aspect of the project including a description of the work and materials, timetable, permits, inspections, price and payment terms.
• It should be easy to understand and read, avoiding “legal jargon” or fine print.
• It should be fair and balanced and not skewed to the interest of one party over the other.
It is important to review the contract in detail with your clients to verify that they understand everything as written. Ask the clients to initial every page (including any Appendices), sign and date the contract.
The best approach is to develop your own contract tailored to your company and the type of renovation work that you do. If you are unsure where to begin, start with the CHBA Sample Contract (at chba.ca) and work with a lawyer to customize it to meet your specific needs.
Did you know that CHBA also has a comprehensive Guide to Residential Renovation Contracts? This guide is full of important information to consider, whether you are creating your first contract or looking to make improvements to an existing document. It includes the type of information that should be detailed in each section and the reasoning behind it. There is draft wording for specific clauses and suggestions for you to use when reviewing the contract with your clients.
As an added bonus, the guide contains an appendix of supplementary clauses for residential renovation contracts. This is a series of pre-written clauses for addressing a wide range of issues that are common in renovation projects. These clauses include everything from appliances to debris to radon to intellectual property. In all cases, a review by a lawyer is recommended.
KEY CONTRACT SECTIONS
• Date
• Parties to the Contract
• Contract Documents
• Scope of Work
• Permits
• Project timetable
• Price
• Payment Terms and Timetable
• Changes to Work (Change Orders)
• Standards of Work
• Utilities and Facilities
• Workers Compensation and Other Laws
• Insurance
• Warranty
• Dispute Resolution
• Termination
• Promotion and Privacy
• Miscellaneous
