We Know: All about Home Remodeling/Renovation

What are the major tasks in remodeling/renovating my home?

When remodeling your home you need to hire a contractor or contractors, sign a written contract, secure a building permit, sign a contract, and avoid financing blunders.

How do I hire a contractor?

In addition to getting quotes from three contractors and asking for references, you must also be sure the contractor has provided all of the following:

  • All information regarding the contract and its performance which might mislead the homeowner if not disclosed, including the lien rights of labor, suppliers and subcontractors
  • A copy of the disclosure form on the file with the Board
  • The approximate percentage of the work to be subcontracted
  • Whether or not the contractor is bonded, or the extent of the contractor's financial security
  • The contractor's license number and classification.

What should be on the written contract?

If your contractor does not want to sign a contract, you should not do business with him/her. In addition, all future changes in the agreement must be in writing and signed by both parties. The contract should:

  • Be read in entirety and all terms and conditions must be understood.
  • Specify the exact dollar amount due from the homeowner under the contract
  • Give the date work will begin and the number of days for completion
  • Specify the work to be performed and the materials to be used
  • Have the approximate percentage of work to be subcontracted
  • Have a clear statement of the risk of loss of any payments made to a sales representative.
  • The name and address of any salesperson that solicited or negotiated the contract, plus the name and address of the contractor
  • Have payment schedule that parallels the amount of work completed, and provides that 5 to 10 percent be withheld until all work is completed
  • A description of what constitutes substantial completion of work
  • Specify the terms of any warranty offered
  • Have a provision requiring the contractor to obtain lien releases from all subcontractors and material suppliers.

Do I need a building permit?

You will need to check with the local government regarding local codes to determine if you need a building permit. Chances are you do not need a permit to do repairs to your home, but you may in order to remodel or add to your home. You will most likely need a permit for finishing a basement, adding a pool, adding a deck, building out a basement, etc.

How do I avoid financing blunders?

When financing your remodeling/ renovation contract, do not:

  • Agree to a home equity loan if you cannot make the payments.
  • Sign any document you have not read or has blank spaces to be filled later.
  • Sign any document under duress.
  • Deed your property to anyone.
  • Arrange financing through your contractor without shopping around and comparing loan terms.


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