Construction contracts are required to contain several specific items, such as the licensee’s number, energy information and insulation ratings for various components. Every contract should also include basic provisions, including, but not limited to:
- Legal description of the land and purpose of contract.
- Description of the plans and specifications by date and name of engineer and number of pages.
- Total contract price, and the stages and amounts to be paid as construction progresses.
- Time of commencement and time of completion.
- Amounts of allowances or credits for the owner’s selection of such things as cabinets, countertops, electrical and plumbing fixtures, appliances, floor covering, roofing material, landscaping or decorating.
- Lien release provisions.
- Warranties, or waivers provisions.
- Property insurance coverage requirements during construction, including commercial general liability, workers’ compensation, and builder’s risk. If the land is owned by the contractor until completion of construction, provisions should also be included for transfer of title, the type of deed to be used to convey title, date and time of closing, title insurance and other closing costs.
Licensed contractors are only authorized to construct the types of improvements included within the “scope” of their license. For example, if your home will be more than two habitable floors, make sure the contractor has a “general” or “building” contractor license.
