Category: Home Remodel

Home Remodel

Tips for a successful home remodel: The Contract

inspectordean
Demo progress at Palm Desert Remodel.


I’m currently managing a $300K home remodel in the University Park Village area of Palm Desert, California. Here are 3 tips about the importance of contracts between a homeowner, general contractor, and the sub-contractors.

Signed contracts between all parties are the key to managing a successful project. To stay on time and on budget, you need signed contracts to make sure that everyone is on the same page even for smaller projects like this one.

  • Signed Contract: I came to this project after the kickoff and missing contracts are the root cause of every issue and cost overrun that we’ve had. All parties went into the project in good faith, and they have signed proposals rather than signed contracts. A proposal is a summary of the scope, list of materials, and price quote. It doesn’t have enough information to resolve problems. A contract includes a detailed scope of work with a price breakdown and a schedule of values to use for progress payments. It also describes how to make changes as the project evolves. I’ve spent time resolving costly conflicts because each party remembers conversations differently. There are no contracts to clarify the scope, clear responsibilities, or make changes. The spirit of work done on a handshake is a nice idea, but all parties need the protection of contract documents to understand expectations and work cooperatively.
  • Detailed Scope of Work: the Scope of Work must be detailed. A summary helps shape the project but a detailed scope is the guide to breaking down the work and deciding how it will flow. It’s a list of items that will be done and may also include items that are out of scope. The summary scope of work on this job led to a costly miscommunication about countertop installation. There were two subcontractors involved and each thought that the other was responsible for work that didn’t get done. It’s been 5 weeks, the conflict is still unresolved, and the materials remain at the supplier 110 miles away. That’s extra time and money.
  • Schedule of values: the Scope of Work also includes a schedule of values to make progress payments. Progress payments are based on the percentage of work that is complete and is agreed to in advance. This helps with cash flow for all parties. The work breakdown structure sequences the work and assigns timing and dollar amounts to the pieces of that work. It can’t be vague or too specific.

Remember that a contract with a detailed scope and schedule of values is necessary for projects of all sizes. To hit your budget numbers and project schedule milestones, you need a written guide. Please reach out to me if you need assistance planning and managing your remodel project.

Dean Rivale, PMP® is a licensed general contractor, CREIA Certified Home Inspector, and Home Remodel Construction Manager for the Coachella Valley.

Home Remodel

Beginning a Successful Home Renovation

inspectordean

I just finished reviewing the contract and scope of work for a large residential renovation project, so I’m sharing the advice that I gave my client as she began her renovation.  At the start of any project, I check licensing, insurance, and then carefully review the contract.

Licensing:  Ask your General Contractor (GC) to provide their license number so you can verify they are licensed and in good standing with the Contractors State License Board.   Make sure that the license is active, and that the proper bonds and insurance are current.  If there are complaints on file, read those and check to see if they were resolved.  If there are mechanical or electrical changes/additions in your project, ask the GC to provide the license numbers for all of the sub-contractors on your project.  If you must submit drawings for a permit that requires an Architect’s stamp, you can do the same check using their license number at the California Architects Board.

Insurance:  GC’s, architects, and designers all need to carry insurance for their protection and yours.  All of these professionals should carry General Liability (GL) insurance, so ask them to provide you with current GL certificates.  GC’s should also provide a Worker’s Compensation certificate, and designers should provide an Errors & Omissions certificate.  Each of these certificates needs to list you as “additionally insured”.  If you proceed without these certificates, you alone assume the risk and liability for the project.

Contract:  When reviewing the contract for the project, pay close attention to the project schedule.  Ideally, the schedule should have clear start and end dates for each task.  If that level of detail is missing, then it will be hard for you to hold the GC accountable to the schedule.  The contract should also state when progress payments are due. This will ensure that you are not paying for work that hasn’t been performed.  The final item, and one of the most confusing and potentially contentious, is the deposit paid upon signing the contract.  California law states that the deposit should be $1,000 or 10% of the project value, whichever is LESS.  Some GC’s will tell you they need a larger deposit to buy materials, and this indicates that they are cash-strapped and trying to stay afloat on other projects.

Managing your renovation will be stressful, especially if you’re in and out of town.  Hopefully these tips will help get you started; and if you’d like additional guidance, I’m an experienced construction manager ready to advocate for your interests.

Dean Rivale, PMP is licensed general contractor CSLB 652130, CREIA certified home inspector, and home remodel construction manager serving the Coachella Valley.