What should be in a home improvement contract?

It’s essential that you trust and have confidence in the contractor you hire, but you still need to have everything in writing. A Home Improvement Contract or HIC, as it’s called in many states, protects both you and the company you hire. The HIC spells out your expectations and requirements so that there are no misunderstandings during or after the job.

While there are some kinds of business deals that are still made on a handshake, anything to do with your home needs to be on paper, signed by both parties and dated. Here are the key points that should be addressed on any home improvement contract; many states have their own version and should be available to you or your contractor:

• Name, business address and license or registration number of the contractor

• A full, clear and detailed description of the work labor, supervision, materials, permits and equipment needed: This will likely be the longest entry and should include everything the contractor will do (and maybe even what he/she won’t do) from start to finish, right down to who will get rid of any debris. Remember the small points so that they don’t become sore points. This could even include paint colors and the brands and model numbers of appliances, if applicable.

• Start and end dates: The date on which the work will begin and the date by which the work will be completed are essential. You should also date a contract when you sign it. This is a must in states that have a 3-day window to cancel a home improvement contract, like Connecticut. Be clear on what counts as a business day in terms of that cancellation date; for instance, Saturdays count, but Sundays don’t in CT. The full cancellation terms should be spelled out.

• Warranties/guarantees: This section should includes all terms, conditions and time periods covered by any guarantees offered on the contractor’s labor and materials and warranties offered by product manufacturers.

• Cost details for each part of the job: This section gives the costs associated with all aspects of the job as detailed above. Materials, equipment, permits and labor should all be spelled out.

• Subcontractors: This section will list any work and fees you’ll pay to separate professionals that might have to be hired, such as an electrician or plumber; details will include their licenses and fees.

• Payments and schedule: This is how the cost of the job will be paid out and on what dates. It might be payable half at the start and half at the finish or with partial payments made at stages.

• Provisions for any contract changes: Projects don’t always proceed smoothly, and unexpected work might need to be done. This section spells out that if the price or scope of work needs to be changed, it must be spelled out in writing and signed by you and the contractor before the work is done. Update the sections for your costs, payment schedule and completion date, as needed, in writing. You might also have a contingency plan in case the change is urgent and you can’t be reached by phone—you might give a verbal OK and then follow up in writing.

• How disputes will be handled: This will detail what recourse you both have in the event of a disagreement. This is often outlined by your state’s office of consumer protection. Don’t overlook this section; it’s like a pre-nup in case things go wrong.

• Signature: Contracts aren’t valid until they’re signed. But on the other hand, don't sign this document until you understand and agree to all the terms.

Many states have additional laws designed to protect consumers. For instance, in New York, at your first meeting with a contractor, he or she must provide you with a document called the “Consumer Bill of Rights on Contracting for Home Improvements,” a copy of which must also be attached to your contract if you move ahead. Contractors must also provide a written estimate if you ask for one, and you’re entitled to get other estimates to compare services and costs before deciding on a contractor.