The renovation contract

February 15, 2011

One of the major reasons for disputes over renovation work is the lack of a contract. The best way to avoid disputes is to draw up an agreement describing the work to be done and the cost of this work. This contract becomes a legal document, binding both parties once they have signed it.

If you are not sure of something in the contract, ask for an explanation. If you’re still in doubt, take it to a lawyer. Both you and the renovator should sign two copies of the contract, one for you and one for the renovator. Some contractors may offer a discount for payment in cash with no written contract. Don’t be tempted. “Underground economy” transactions are risky, and the pitfalls can easily offset any promised savings.

According to Canada Mortgage and Housing Corp., the contract should include:

» the correct and complete address of the property where the work will be done;
» your name and address;
» the renovator’s name, address and telephone number;
» a detailed description of the project, plus sketches and a list of materials to be used;
» the type of work that will be subcontracted;
» the right to retain a construction lien holdback as specified under provincial law;
» a clause stating that work will conform to the requirements of all applicable codes;
» start and completion dates;
» an agreement stating whether it is the homeowner or the renovator who is responsible for obtaining all necessary permits, licenses and certificates;
» the requirement that the renovator be responsible for removing all debris as soon as construction is completed;
» a statement of all warranties, explaining exactly what is covered and for how long;
» a statement of the renovator’s public liability and property damage insurance;
» price and terms of payment.

For more information or for a complete list of CMHC publications, programs and videos on renovation, call CMHC at 1-800-668-2642 or visit CMHC’s website at cmhc.ca

Filed under: RENOVATIONS