Remodel Smart: Basic Paperwork Reveled

Pushing paper may seem like the least fun thing about a remodel but, like eating your broccoli, you gotta do it. Here’s an overview of the basic paperwork you will need:

Contractors’ Responsibilities

Contractors,  like any business owners, have to take responsibility for employees and for their work. They should have the following papers in order—signed, with current dates (not expired), and filed with local government agencies where applicable.

License: Independently verify a contractor’s bona fides. California, for example, posts contractor licenses online in a searchable database.

Bond: A contractor’s bond offers compensation in cases where a contractor doesn’t finish a job, does defective work, doesn’t pay vendors, or causes other problems. Many states require contractors to have a bond.

Liability Insurance: What happens if a roofer falls off a ladder, or a carpenter has an accident with a saw? Your contractors should have their own liability coverage  including workman’s compensation coverage.

Homeowners’ Responsibilities

Homeowner’s Insurance: Your homeowner’s insurance probably doesn’t cover much if someone gets injured on the job.  But it helps. And it’s especially vital if you’ve got friends helping with a project, and you aren’t hiring a dedicated professional. Your insurance may go up if you’re expanding your home or adding a pool or hot tub, but it could also dip if you include safety features such as upgraded doors or windows. Industry experts recommend talking to your agent.

Everything in Writing: All of it. From initial bids to pay schedules to change orders. If something goes wrong, it’s best to have a written trail in case you need to prove your side before a judge. This also cuts down miscommunication. If you discuss a paint color, but a different shade goes on the wall, pointing to an email or note stating the right hue can save the argument over who pays for added time and money for the change.

All Together Now

Work contract: Don’t let work start without a contract. It protects both you and your contractor  (remember, they’ve dealt with their share of shady clients too). The contract should lay out the project’s scope, deadlines, payment schedules and payment amounts. Read it carefully to make sure nothing has changed from the bid or other previous agreements that you didn’t already discuss.

Permits: Your contractor should help with this, but ultimately you are the one on the hook if something’s amiss. Interior projects like installing shelves, replacing flooring or painting probably don’t need a permit. But work that impacts the structure or utility usage of a house, such as plumbing, moving walls or replacing windows, likely need permits, especially if you live in a historic district with rules about cosmetic changes.

The permit system might feel cumbersome, but it protects you too. Non-permitted work could let an insurance company off the hook should problems arise, and could tank a buyer’s mortgage should you try to sell.

From Realtor.com

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