5 Things to Look for in Your Home Improvement Contract

Stacey Marcus
Written by Stacey Marcus
Updated August 16, 2021
 A woman checks the home project with contractor
John Fedele via Getty Images

A good home improvement contract helps to ensure your project will run smoothly

Get quotes from up to 3 pros!
Enter a zip below and get matched to top-rated pros near you.

Starting a home improvement project is an exciting venture. Whether you are adding a patio to your backyard or working on a custom kitchen, you want to choose the right contractor and make sure you understand the home improvement contract before you sign on the dotted line. 

A smart contract lays the foundation for a successful project while protecting both you and your contractor, but it’s important to know what to look for before signing. 

Don’t Start Work Until You and the Contractor Sign a Contract

If your contractor is slow to produce a home improvement contract, this delay may be a red flag. A contractor should not begin work on your home improvement project until you have a signed agreement. 

If you need to start a project immediately and are negotiating the final terms, you can add verbiage that clearly states that it is an interim contract until you and your contractor sign the permanent contract. This may not protect you from everything but outlines your intentions until you can sign something more formal.

The Five Pillars of a Good Home Improvement Contract

A good home improvement contract provides a detailed road map to a successful journey with your contractor. Below, we’ve outlined some important factors that you should ensure are included in any contract.

Contains a Detailed Project Scope

A project scope outlines the key aspects of your project, such as activities, timeframes, deliverables, and resources. It can also define clear boundaries. A good local contractor will provide a project scope that includes a detailed description of the work they will and will not perform, the materials and finishes being used, the daily and project clean-up tasks, and who will obtain permits.

Outlines a Clear Timeline

The exterior of a suburban house on a sunny summer day
jhorrocks/E+ via Getty Images

Your home improvement contract should clearly state when your project will begin and how long it will take to complete. While all projects are subject to delays due to unforeseen circumstances, it is important to have a clear timeline in writing to set expectations. This contract will help to provide documented backup if your project is taking longer than reasonable to complete.

Features a Payment Schedule Based on Milestones

A contractor will often ask for a deposit to secure the project, obtain materials, and pay subcontractors as the project unfolds. You should not pay for the full project amount upfront; rather payments should be linked to work milestones such as excavating, pouring foundation, etc. You should also never pay the final amount due until you are completely satisfied with the work as completed. 

Make sure your home improvement contract includes language about payment terms and what will happen in the event that work is not completed. 

Lists Exclusions

A good contract should include not only what the contractor will provide but also a list of exclusions. Items not covered might relate to areas that won't be visible until the walls are opened up after demolition or the level of cleaning you should expect after the work is complete. 

A trustworthy contractor will outline possible exclusions that would pertain to your specific project.

Makes Everyone Feel Comfortable

Your relationship with your contractor should be based on mutual trust. Both you and your contractor need to feel confident with the information and terms in the home improvement contract. If any of these apply to your contract or contractor, it may be worth bringing it up before signing or moving on to the next pro.

  • Does not provide references

  • Does not have proper insurances

  • not licensedIs  to perform this specific work

  • Asks for full payment upfront

  • vague descriptProvides ion of work

  • Will not tell you who will be working on your project

  • Has vague terms of when the project will begin

  • Does not return calls after you give the deposit

  • Adds an arbitration clause to contract

More Items Your Home Improvement Contract Should Include

A contractor shaking hands with home owner
ljubaphoto/E+ via Getty Images

Now that you know what each contract should cover generally, you can get even more detailed. Ensuring these additional items are included in a home remodeling contract will help protect both you and the pro from any miscommunication down the road:

  • Job description

  • Local authorization (like permits)

  • Penalties for missed completion dates

  • Procedure for work orders/changes to initial agreement

  • Detailed outline of costs and materials

  • Proof of licensure, insurance, and bonding

  • Termination clause

  • Lien release (Ensures you aren’t liable if a contractor fails to pay any subcontractors)

Need professional help with your project?
Get quotes from top-rated pros.