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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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