Safeguarding the Owner in a Home Improvement Contract
This guide is intended to highlight necessary provisions the owner should have in the contract for home improvement work.
When an owner solicits bids for home improvement work, the contractor will provide a proposal to cover its scope of work. The proposal generally will have little if any protection for the owner. The proposal will usually request substantial up front money, and all of the money before the owner can determine that the work is truly complete.
When reviewing the contractor's proposal, make sure that it details a complete scope of work and establishes a price. Watch out for allowances. The contractor will often list an allowance for particular work. However, an allowance promises nothing about the cost, and if the allowance is exceeded, the contractor will request more money.
You cannot expect that the contractor's proposal will contain the sorts of protections that the owner really needs. So, you should consider adding provisions like the following:
Owner Terms for Home Improvement Contract
Contractor shall pay for all labor, material, and work for the home improvement project ("Project").
Contractor shall provide lien waivers from its subcontractors and material providers as a condition precedent to final payment. Contractor shall indemnify, defend, and hold Owner harmless from claims by Contractor’s subcontractors and material providers in connection with any money paid to Contractor or to be paid to Contractor. Owner has the right but not the obligation to issue joint checks to Contractor and Contractor’s subcontractors or vendors.
Contractor shall be an independent contractor and shall be solely responsible for the safety of its workers, and for its means, methods, techniques and sequences.
Contractor shall provide insurance to cover its work and to protect Owner from claims arising from Contractor’s acts, omissions, and negligence, and from claims by Contractors workers and subcontractors. Contractor shall provide a certificate of insurance to Owner naming Owner as an additional insured on Contractor’s liability insurance. Owner’s failure to object or complain about Contractor’s insurance shall not be a waiver of insurance requirements.
Contractor shall warrant its work to be good and workmanlike and free from defects for one year from Owner’s acceptance of such work. Upon notice from Owner, Contractor shall promptly at its own expense remedy and resolve any such defects.
Contractor shall secure and pay for applicable building permits for the work.
Contractor shall comply with all applicable laws, codes, and ordinances.
Contractor shall not undertake any work not authorized by Owner in writing. Contractor shall not incur any charges for Owner’s account in excess of the contract price without Owner’s express written agreement.