9+ Sample Renovation Contracts

What Is a Renovation Contract?

A renovation contract is a contract agreement between two parties. This is between a contractor and a client. This will state the different terms and conditions as well as the services that are to be provided by the contractor. It is a must that this is checked and reviewed down until the minute details. This will outline the different roles and responsibilities of the contractor and the client. This can also be referred to as a remodeling contract or in some cases home improvement contract.

Key Elements Included in a Renovation Contract

The clause for the basic information: This will identify who are the parties included in the contract. This will state the name, contact information as well as the address of the contractor or the company offering the service. This will also include the basic information of the client or property owner. This will state their name, their contact information as well as their address. In some cases that the project is not actual house or property of the client, include the address where the project will be conducted.The clause for the scope of work: The next section would identify the work that is to be conducted. This will give a thorough description of the work that is to be done as well as the work that is not under or included in the contract. The contract should also identify the different tools and pieces of equipment that is needed in order to complete the project. This will also include the brand name and number of the materials as well as the dimensions and color. A contract should clearly state the different roles and responsibilities of the contractor. This should clearly state that any subcontractors and the actions they will perform are still under the main contractor or the project manager. This will also be applicable for all the suppliers. Along with that, include also the work that is to be done by the homeowner or the client. This should clearly identify and list out the in detail the different work statement under both parties. Supporting documents may also be included in the scope of work clause. These supporting documents may be made up of floor plans and blueprints. Other components that make up the scope of work clause are the cleaning responsibilities. This will determine who is in charge of disposing debris and any unwanted junk or clutter.The clause for the schedule of the project: For small and simple projects having a starting date as well as an end date may suffice. But, for big and complex projects, it is necessary to have a timeframe and schedule for the different key activities or the different stages of construction. It is important to have a strong agreement of the starting date and a close approximation of the finish date. This will give the contractor as well as the client a clear visual of the duration of the project. The contract should also state that the contractor must not be blamed for any delays due to unforeseen and uncontrollable acts of nature. This usually pertains to extreme weather conditions like storms and hurricanes. The frequency of cleaning the construction site must also be stated here. This can also be called as the project schedule.The clause for the terms of payment: The contract should also include the estimated total cost of the project. This may change due to the ever changing prices of materials and other key factors. This will purely depend on the type of construction contract you have agreed on. Nevertheless, state down the total cost, different methods of payment as well as the schedule of payment. A tip that may help this section is having a payment agreement plan. In terms of payment, you can also include the bills for electricity and water utilities. This should clearly state where the contractors and workers will get these utilities.The clause for warranties: There should be a clause that will clearly state the work and materials that are under a warranty. This should include how long the warranty last.The clause for indemnification: There should be a clause that both parties are indemnify or protected from any harm or loss. This will state that they are protected from any damages and are not liable for the said damages.The clause for dispute resolution: As the renovation undergoes the whole process, there is a chance that there may be complications and arguments. In the contract, there should be a step by step process on what to do if there are any disputes between both parties or in the project. This will state how the problem may be resolved.The clause for insurances: The contractor should have certificates or insurances. This will prove that the contractor has legal responsibilities or proof of liability. It is also a must to have a section about the compensation of the workers.The clause for termination: Just like in a consulting contract, there should be a clause for termination. This will state and explain the plans of action to conduct in case one party wants to cancel the contract. This will also state if there are penalties. Also, include the required number of days that is acceptable in presenting the termination letter prior to the actual cancellation of contract.The clause for signature: The signature: It is a must that both parties have fully read and understood the terms of the contract. Both the client and the contractor must affix their signature. This is to make sure that they will both comply with what is written in the document.

Step by Step Process in Creating a Renovation Contract

Step 1: Select a Format

The first step would be to select a template or format. It is important that a contract is type not handwritten. This will protect parties from signing a contract that lacks precision. This will also help in easy checking for errors.

Step 2: Provide an Introductory Statement

This will identify what type of contract it is. This will also state the basic information of the contractor or the company. This will state the name of the contractor, the contact information of the contractor as well as their address. If it applies also include their license number. On the other hand, it is also a must to include the name of the client or the one who availed the service. Included also are their contact information and address.

Step 3: Identify the Different Terms

The next step would be to identify the terms. This will clearly state what are the work or the services that are to be provided by the contractor. This should state also the services that are not included or not under that service. This would also identify the different tools, pieces of equipment and raw materials that are needed in order to complete the project. A contract should clearly state who is in charge of buying the materials and who is in charge of checking and maintaining them.

Step 4: Identify the Schedule of the Project

Next thing to do is to ask when will the project commence? It is important to set out a date when the project will actually start. It is also a must to have an estimated end date of the project. With knowing this, the designing and implementation of the construction schedule will be more detailed and effective. This will help in focusing the attention in the different stages of construction or the different key activities that are to be performed.

Step 5: Include the Supporting Documents

It is important to have supporting documents. A renovation or remodeling may not commence without the necessary documents like a building permit. Other supporting documents are the different licenses. The contract should clearly state who is responsible for securing those permits and licenses. This may also include the different warranties that are given to the client or the owner of the property.

Step 6: Discuss the Additional Information

During the whole duration of the renovation process, it is a must that a worker has a place to stay. In big and complex projects, it is a must that there is an area where a barracks will be built in order for the laborers to sleep. It is also a must that there is a place where they can eat. Other additional information that is crucial to be discussed are the different utilities for everyday use. These utilities are electricity and water.

Step 7: Identify the Cost

This will mostly depend on the agreement between the client and the contractor. There are different methods or approaches in determining the total cost of the construction. However, it is important to state that in the contract. It is also a must to include the estimated total cost of the project. This must cover everything from the compensation of the workers down until the different materials, tools and equipment that will be bought and used in order to finish the construction or renovation. The contract must also state the schedule of payment. This should clearly state the down payment that is required and the succeeding payments.

Step 8: Review, Finalize and Sign

Lastly, before publishing or publicizing the document, it is a must to check and review the document for any errors. It is a must that both the client and the contractor have their own copy of the document. After reviewing and finalizing the contract, both parties must affix their signature along with the date in order to finalize and legalize the agreement. In most cases, this part will include the concluding statement that will clearly state that both the client and the contractor have fully read and agreed to the terms in the contract. This will state that they acknowledge what is written in the contract. 

In creating a contract, it is important to assess the different terms and make sure that they are in compliance with the law of the local government or the state. A tip that may help is to consult a lawyer or an adviser in order to make sure that you are not violating any rules and guidelines. This is why it is imperative that the supporting documents like building permits are available and secured.

FAQs

What are the Most Common Types of Arrangement in Terms of Pricing?

Lump sum – This can also be referred to as fixed price. This is the simplest type of contract wherein the contractor will be paid depending on the agreement between the two parties.

Cost or cost-plus – The contractor will be paid according to the cost of the project plus a fee to cover profit and other non reimbursable fees.

Unit price – This can also be referred to as measure and value. The contractor will be paid depending on the actual quantity of the finished product or output. It will then be multiplied by the agreed per unit prices.

Time and materials – This is a combination of unit price and cost. The contractor will be paid depending on the actual cost of the materials and the agreed compensation of the laborers. Another thing that will be a factor here is the price of the tools and pieces of equipment. The client will generally pay the contractor based on the effort.

What Are the 5 R’s of Procurement?

There are 5 rights in the process of procurement. These 5 r’s will be the guidelines in order to provide the organization or the process with the right inputs. The 5 r’s are:

The right quality:

This means that the products or raw materials are of good quality and up to the standards. This makes sure that the process will not be hindered due to weak materials.

The right quantity:

This means that there should be a sufficient amount of materials in order to complete the project. This makes sure that the operation will not stop because of lack of materials.

The right place:

This means that the ordered materials are to be delivered at the right place to not hinder the operational process.

The right time:

The materials should be delivered not only at the right place but also at the right time. This will make sure that the materials are delivered when they are needed.

The right price:

In order to maximize the profit, the prices of the goods and services must be at a reasonable price.

It is important that to achieve these 5 rights, the company or business organization must find the right supplier.

What is the Difference between Procurement and Purchasing?

More often than not, procurement and purchasing are used interchangeably. Though they may share some similarities there is a bigger meaning and difference between the two. A purchasing may be considered as a process or phase of procurement. Purchasing is the process of buying or ordering a supply. It is a short-term goal. On the other hand, procurement is a bigger and longer process. It is a strategic method of acquiring goods and services, it also helps in building a long-lasting relationship with the supplier. The main focus of procurement is to source or look for quality products and raw materials.

A renovation contract is an agreement between the client and the contractor. This document may be used in the same way as a construction proposal. This should clearly outline the different services that are to be performed during the remodeling or construction process. It is important that a renovation contract will identify the activities or tasks that are included in the agreement as well as the different tasks that are not included. This will help in order to avoid disputes between the two parties. This is also a legally binding contract so it is important that the contract is in compliance with the local or state law.

Try the different templates that are available above in order to have an outline of what is needed in order to have a detailed and solid renovation contract.