Working with Contractors on Home Improvement and Repairs
People often hire contractors for large home improvement projects and/or repairs. Home remodels are typically challenging on their own, and dealing with an insurance loss due to some accident or natural disaster can be especially difficult. Whether you are putting in your dream kitchen, adding an outside patio, or dealing with damage from a water leak, it is important to understand how contractors fit into your overall plan.
PART 2 – What agreement is being proposed?
There are three common contract arrangements when a person is preparing for a home improvement / repair project. There may be different arrangements altogether, so it is important to understand what is being proposed.
- Lump Sum Contract – this is the typical home improvement contract. You will have a contract with the general contractor, and it is the general contractor’s job to coordinate and pay for all the work by the subcontractors.
General Contractor (the “GC”) – when you have a lump sum contract, the general contractor oversees and manages subcontractors (contractors with a specific trade) and suppliers.
Subcontractors (the “sub”) – when you have a lump contract with a general contractor, the contractors who perform their specific trade are subcontractors. There will typically be multiple subcontractors (e.g., concrete, carpentry, plumbing, electrical, flooring, cabinetry, tile, etc.). The different subcontractors work during different phases of the project. The general contractor should coordinate all work between the subcontractors to complete the project in the agreed time frame.
- Construction Manager – this is not uncommon in home improvement, but this arrangement is different than the lump sum contract. In this situation, the construction manager will identify the various trades for you to pay directly. The construction manager will coordinate the work, but you are responsible for paying the various trades (they are not technically a subcontractor since you pay them directly, but are commonly referred to as subcontractors). The construction manager is often paid a lump sum or a percentage of the total project cost.
- Specialty Contractor – with smaller projects limited to one issue (e.g., flooring, roofing, window replacement, foundation, etc.), you will often deal directly with a specialty contractor. Because there is just one area affected, there is typically not a general contractor. In this context, it is not uncommon for the specialty contractor to use its own subcontractors for skilled labor, but there is typically no need to coordinate different trades.
General Comment
Don’t sign anything yet! Once you have a contractor and an idea of the relationship you will have with your contractor, it is important to go through the construction contract to understand what is in the actual agreement. Our next topic will cover important terms in any home improvement / repair contract.
The legal information in this blog entry is not intended to be a substitute for seeking personalized legal advice from an attorney licensed to practice in your jurisdiction. Further, nothing contained in this article is intended to create an attorney-client relationship with any reader. This article and website are made available by Waldron & Schneider for educational purposes only and to give basic information and a general understanding of the law, not to provide specific legal advice. By using this website you understand that there is no attorney client relationship between you and Waldron & Schneider. The article and website should not be used as a substitute for competent legal advice from a licensed professional attorney in your state. For more information or questions you can contact us and one of our attorneys will be in touch soon.
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Associate Attorney Collin Bullard writes about the disadvantages of a general partnership in his blog.
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Disadvantages of a General Partnership
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Disadvantages of a General Partnership The Texas Business Organizations Code defines a partnership as “an association of two or more persons to carry on a business for profit.” Whether those indiv...1 CommentComment on Facebook
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Waldron and Schneider wishes Partner Richard Simmons a happy early 50th birthday!!! ... See MoreSee Less
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Congrats, Richard. Make sure to have some fun tomorrow.
HAPPY EARLY BIRTHDAY DAD
Happy Birthday!!🎉🎂
Associate Attorney Collin Bullard writes about the importance of buy sell agreements in his blog.
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The Importance of a Buy/Sell Agreement
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The Importance of a Buy/Sell Agreement Many small business owners understand the importance of creating an LLC or similar entity to protect the individual owners from potential liabilities of the c…1 CommentComment on Facebook
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Congratulations to Emily Simmons (daughter of partner Richard Simmons) who competed in the National American Miss Pageant this weekend! She was the Heart of service Winner!!! 4th runner up overall!! 3rd in Casual wear!!! ... See MoreSee Less
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