Your remodeling or house addition contract is the document that defines the project and enables the contractor to use the quality and type of materials you want and provide the quality of workmanship you expect. A good contract is the basis of a good relationship with your contractor while a project is being done and the basis for a successful job. There are, then, things you need to know about contracts as you begin to plan a remodeling project.
A remodeling contract is a document reflecting agreements made between you (the homeowner) and a contractor about a house addition or a home remodeling project. It reflects your expectations and desires and the contractor’s agreement to use designated materials and provide workmanship of a stated quality to build the remodel to your expectations.
The first thing you need to know about remodeling contracts is that they reflect agreement to do a specific job to industry standard specifications. It is important that everyone involved keep the project in perspective. Be sure your expectations are reasonable. You probably are not paying for perfection, and you probably won’t get it.
The contractor you hire will probably use a standard contract. You should review it carefully and check all of the details. You should also have your attorney check it. What details should you look for:
· Your instructions and specifications should be in writing. This includes tasks to       be performed, materials to be used, and quality of workmanship.
· Who supplies the materials.
· State the beginning and end dates of the project.
· Organize the contract so the work leads to and ends with a required inspection
· Statement that the work must pass inspection
· Notes about who is responsible for clean-up and paying dump fees
· Things the contractor will not do
· Payment terms
· How changes will be handled
· How disagreements will be handled
· How the contract can be handled
· Details of any warranty on the work
Outlining payment terms in the contract is very important. Here are some of the things to look for:
· Up-front payments should only be for materials delivered to the work site
· Some states limit up-front payments to a maximum of 10% of the total cost     of the job
· Additional payments will probably be necessary after each phase of work is     finished
· The final payment should be at least 5%
· The final payment should not be made until all problems are identified and all issues are resolved.
· Make sure all liens are removed from your property
When the final payment is made, be sure to get a copy of the final invoice showing the contract is paid in full and is signed by the contractor.