This is the third of my articles about how to protect yourself when contracting for a remodeling of your home.
As I mentioned in my earlier articles, California law requires a written contract between you and your contractor for any work that cost more than $500. There are some other things you should know as well.
Deposit – Under California law the deposit that can be charged can be no more than 10% of the purchase price up to a maximum of $1,000. Thus, do not pay more than $1,000 for your deposit.
The written contract must have an approximate start date and an estimated date of completion. The contract must contain: (1) the price, (2) a schedule of progress payments, (3) a list of the contract documents (including things such as the architect’s plans), and the contractor’s address and license number.
The contract is also required to provide for a way to approve and pay for changes, called change orders. There should be language about how to keep your project free of liens from not only the contractor, but from the subcontractors and material suppliers. You should make it a requirement of your contract that you get periodic lien releases every time you make a payment and final lien releases when the project is completed.
You should require that your contractor provide liability insurance and that it has the legally required workers compensation insurance.
Finally, remember that is illegal in California for a contractor to bill you for work that has not been done or material that has not yet been delivered.
These are some general tips so that you know what the issues are and generally what your rights are, but this is not legal advice and no substitute for a qualified legal review of your contract prior to signing. It is always better to make sure you are protected before hand, than to have to deal with litigation afterwards.
I have been involved in construction related contracting and litigation for 25 years and have seen many great projects and some amazingly problematic ones. The discussion above is not intended to provide legal advice to any particular individual but simply to give the readers some things to think about. In my next article I will discuss the types of construction contracts and I will start with the basics on how to protect yourself in advance of problem arising. If you need more information from me, please take a look at my websitewww.bronitsky.com.
