Always insist on a written contract, and make sure to get a copy. Do NOT agree to an oral contract. The contract should include:
- The contractor's complete name, address and phone number.
- The contractor's license number (if applicable).
- A consumer notice which states in bold print that the customer has an unconditional right to cancel the contract until midnight of the third business day after the contract was signed. Cancellation must be done in writing.
- The timeline of the project, including the approximate start date and completion date of the work, and any contingencies that would change the schedule.
- A specific description of the work and materials, including brands, model numbers and other identifying information. A clause stating that the contractor is legally required to deposit all progress payments received prior to completion in an escrow account or post a bond to protect these payments.
- A clause stating that if the contractor or subcontractor is not paid, he may have a claim against the owner's property under the Lien Law.
- A "lien waiver" clause which allows you to withhold final payment until the contractor gives you proof of payment to all subcontractors, suppliers and vendors. This can help prevent unpaid subcontractors, suppliers and vendors from putting liens on your home.
- A clause stating who obtains and pays for permits.
- A requirement that the contractor will comply with all applicable laws, regulations and codes, and that no work will be done until the contractor has obtained all necessary permits.
- Any guarantees on workmanship and materials. Unless these are in writing, they will be difficult to enforce.
- A requirement that the contractor remove and cart away construction debris, specifying the frequency and conditions under which this must be done (e.g., once the dumpster is full).
- The total price, including materials, any change orders, labor and any additional charges.
- The payment schedule. Any schedule of progress payments should bear a reasonable relationship to the work done and materials used.
For further information, see the Division's sample home improvement contract.