XP: Contractor contracts -- is this worrisome?

[dr.girlfriend]

Sorry, XP'ing from H&G because this gets more traffic and you guys are wicked smart:

As you guys are probably sick of hearing, we are planning to build an addition to our home. It's a huge investment ($185k), and I'm just jumpy in general about it even though I really want to do it.

We have been working with someone we hoped to use as a contractor all along. He's the brother-in-law of my son's friend's mother so, a personal relationship but not so personal as to be disastrous if it goes wrong. I got references from him, and spoke to them, and they were all very positive (as references supplied from the person should be, lol). He recommended the architect, who is local to this area, and of course she spoke highly of him as well.

We got other bids, and his was the most reasonable. He is licensed and insured. He doesn't have a website, but I think that is very common for good contractors in this area, who seem to mostly get business by word of mouth. The company has been around since the 80's and was started by his father. They had lots of pictures of projects on their iPad, etc., but they are not on Angies' List or the Better Business Bureau or anything like that that I can find.

I got the contract today, and it was...not as professional as I hoped, more in line with what the guys who did our kitchen provided. It's just a list of all the work that's going to be done, the allotment for floor, tile, fixtures, etc., and then the TOTAL cost. No schedule of work to be done or payments, etc. No liability clauses or discussion of arbitration, etc.

There's definitely stuff I will make sure to add before I sign, like schedule of work and payments, lien releases, etc. But, how worried should I be that this is not in their standard contract? Does it reflect badly on them, or do you think it's pretty standard for the business?

Please pat my head and tell me it will be okay. :-(

[poofed the details]

[dancelnow]

I would say sadly it's pretty standard for the business. A lot of these companies are self-owned and do great work, but are terrible at business and scheduling. If strict timetable is important to you, definitely talk about that more and ask it be added. If they can't define it, they can't stick to it.

[trissie18]

Yes, from our experience this is standard. Unfortunately for us we are now in the process of legally fighting our contractor who decided at the end of the project that he underquoted us and that he would bill us hourly for work that was covered by the quote to the tune of $4400. Our lawyer believes we have a really strong case to fight it but the whole process has been a nightmare. Definitely make sure the payment schedule is in writing.

[ellipses84]

Not that out of the norm for residential, but it is a large amount and you as the client can ask for whatever makes you feel comfortable. I would request that he include a schedule in the contract. Scope of work, cost and schedule are the most important things to include but I’d prefer something in there about dispute resolution. If you ask, they may have a boiler plate Standard Terms and Conditions to attach. You could also ask them to use an AIA owner-contractor contract template. One for small/residential projects would be appropriate. You can ask your architect or a lawyer for advice, or to review the contract.

A better contract will protect you.
There may be legitimate reasons for the schedule to change and you as the owner should be part of that process. For example, a tile you wanted is going to take longer and delay the project - you get a decision to use a different tile or change the schedule.

[winecat]

Yeah- it seems 'normal' but I'd want a better contract/more clarity for the amount of money you're talking about here.

[jwright]

Look for an AIA contract (the simplest form is A101 which you could pair with A201). That's industry standard for construction companies.

Are they a general contractor? Do they perform the work or use subcontractors?


ETA link:   www.aiacontracts.org/contract-documents/69981-standard-form-of-agreement-between-owner-and-contractor

[aspentosh]

Seems normal based on what I've seen, but all of our projects have been $20k or less. I would definitely want something more detailed to protect yourself.

So, don't be worried and drop this guy, but just ask for more so you can feel better!

[barefootcontessa]

are you paying cash?  I think a bank would require more details.    

I would definitely have some language in their about payment schedule and holding off final payment until you are satisfied.

[cuadrado]

We are in the middle of a big renovation as well (crying on the inside at how much we are spending) and I would be extremely concerned with that contract. Maybe it's normal for smaller renovations to have contracts that are less involved, but it seems like they are missing major areas that need to be listed with a major renovation. That's not to say they aren't good... but I don't blame you for wanting things added. Both sides need to be legally protected.

Here is what our contractor had us sign:

- 7-page construction contract (discusses payment schedule, liability, etc.)

- 5-page specification sheet going through each area of the renovation (HVAC, electrical, etc.) listing what specifically was being done, what our allowances covered and who was responsible for what. For example, this is the section for gutters: "Gutters for the addition will be 5” Ogee seamless aluminum with 3x4 downspouts. Leaf guard type covers, half round gutters, round downspouts and replacing gutters on the existing house have been priced as options."

- 5-page spreadsheet with line items for every cost of the renovation as well any optional allowances for things we were undecided on. We have to do a formal change order if we want to change something on the spreadsheet. Each line item is accompanied by a formal estimate from subcontractors about what is being done and what products are being used.

PM me know if you want to see copies of these and I can email them to you.

[livinitup]

I was shocked at how poorly our contractor detailed our contract for a small outdoor extension. And then, after we signed and he **realized** I wanted natural wood ceilings, not pre-fab sheets, he was all “... Well that’s a lot more work, so I’ll need to be paid more.”

I didn’t mind paying him for his work but it brought the quote up to where the other 2 contractors were originally.

It could be worrisome because if something goes wrong ... and it always does ... you don’t have the documentation on your side. But I think it’s fairly common for contractors to keep things loose for their own sake.

[madringal]

We are using a highly recommended contractor in our area to put in an all new patio for us this spring. Everything about them was super polished and professional, and then we got the "contract". We just had to sign the invoice and mail in a check, lol. Our project is no where near as expensive as yours, but it did think it was odd that it wasn't more detailed.

[kme]

We have a family friend who did a $100k remodel. He outlined just the cost in the estimate (including subcontracts for electrical) but not a timeline. He told us a start and general end time. Once the project started it was steady (wasn’t like they were there and then left for weeks and came back). If it wasn’t someone I trusted I would ask for a timeline.