Thinking about doing Home Renovations? What You Should Know feature image

Thinking about doing Home Renovations? What You Should Know

It’s that time of year again: warm weather in Calgary means it’s time for renovations! Home renovations can be stressful for various reasons, but there are things you can do and steps you can take to minimize the stress. This week, we look at how homeowners can make home renovations as smooth as possible.

Think like a lawyer: Always Get Everything in Writing

Just like other relationships, no one really anticipates their relationship with their contractor to go south, but it happens so it is best to be protected legally. Before you decide which contractor to hire, it is always a good idea to get written estimates. In the event that something does go wrong, prices do not add up, or the contractor delays the renovations, estimates can help bolster your case if you end up taking legal action against the contractor. Estimates should include the following:

  • A complete description of the work that will be completed;
  • The type of materials that will be used, as well as the quality of materials;
  • The start and end dates;
  • A breakdown of all costs and the total cost of the project;
  • Any guarantees or exclusions made by the contractor (ex. A 5-year guarantee if something goes wrong);
  • How payment(s) will be made.

For some homeowners, estimates play a large role in deciding whether to proceed with a renovation, or which contractor they will hire. It is an important part of the decision-making process and if a contractor made misrepresentations to the homeowner, it is in writing and therefore easier to prove. Once a decision has been made on which contractor you want to hire, insist on having a written contract drawn up for both parties to sign. Verbal contracts can be difficult to prove, often resulting in a fruitless game of he-said she-said. By having everything in writing, you are protecting yourself legally, in the event something goes wrong or the contractor acts inappropriately.

Do Your Research

There are so many different contractors out there and sometimes it can be overwhelming who to choose. One way to help narrow down the field of candidates is by looking at reviews or getting referrals from people you trust. You are letting these contractors into your home to improve it, you should feel comfortable with who you end up going with. There are a lot of resources you can use, including Google reviews, Home Stars (which is a database that has over 1.8 million contractors listed across Canada) and Trusted Pros (which is an Alberta database of contractors). Ask friends or family members who have done renovations who they used as a contractor. You can ask them what to look for or be on the lookout for in terms of red flags.

When You Sign a Contract for Renovations

There are some things you want to ensure you include in your written contract. First, always make sure you have the correct names of the parties. This sounds simple but when you are dealing with a contractor, you want to make sure they have the authority to sign the contract on behalf of the business they are representing. Second, make sure it is clear exactly what work is going to be done, how the supplies or materials will be provided and paid for, and how payments will be made for the work as well as a schedule for payments.

There are some simple clauses you can add to the contract to further protect yourself. The first clause should stipulate that if any changes are made to the contract or the project, it will require written approval from you and a signed statement from the contractor indicating whether there is a reduction or increase in costs. Another clause would be a guarantee by the contractor. Whenever possible, it is a good idea to include this kind of clause because sometimes materials can be faulty or things are not installed correctly. Including a guarantee will save you costs down the road in the event something happens because of the contractor’s shoddy work or defective supplies. The guarantee will not be a lifetime guarantee, but something like 2-5 years is not unreasonable, although most contractors will have a 1-year guarantee at most.

Below is a useful checklist of things you should include when signing a contract for home renovations:

  • A complete description of the work that will be completed;
  • The type of materials that will be used, as well as the quality of materials;
  • Who is responsible to get necessary permits, inspections and approvals by the local authorities by the appropriate deadlines;
  • Any work that will be subcontracted;
  • A statement that all work will be completed according to local building codes;
  • A statement that the contractor is responsible for removing all debris once work is completed;
  • The start and end dates and who is responsible for additional costs should these deadlines not be met;
  • A breakdown of all costs and the total cost of the project;
  • An itemized payment scheduled including any hold-back provisions under the Builders’ Lien Act;
  • How payment will be made;
  • Any guarantees, warrantees or exclusions made by the contractor;
  • A statement outlining how problems will be resolved;
  • A certificate of insurance showing the contractor’s public liability and property damage insurance; and
  • Your signature and that of the contractor or representative.

What Issues Can Arise in Renovations that would Result in A Claim?

There are a lot of very qualified, legitimate, and professional contractors out there. However, there are also individuals/companies who are trying to take advantage of unknowing people to make a quick buck. This is why having a detailed contract, that has been thoroughly reviewed by a knowledgeable construction lawyer, is so important. You can’t judge a book by its cover, and even if you do your due diligence and read tons of reviews, there is still the possibility of getting a less than honest contractor.  Regardless of what type of contractor you end up with, having some form of protection, like a lawyer-reviewed contract, is important and a step all homeowners should take.

One of the biggest issues that arise from home renovations is unforeseen costs. Contractors should create a contingency budget to deal with unexpected issues.  These issues are common in older homes that were built long before building codes changed. Every so often, municipalities change the standards that contractors and builders have to abide by. If contractors discover that a home they are renovating is not up to the current codes, they will be obligated to update whatever needs updating in order to continue with the project. They cannot ignore the discovery. This could be a substantial cost that neither party expected.

Another common problem is delay. Contractors do their best to estimate accurate timelines for projects, however, delays still often occur. Delays can become very costly to homeowners, regardless of whether they are considered reasonable. For example, if you are renovating a secondary suite, and it is estimated to take three weeks but ends up taking seven weeks, you have now missed out on a month of potential rent, and also have to pay the carrying costs. Sometimes the delay is a result of unforeseen issues, while other times, it is because of mismanagement of the project.

The Importance of Consulting with A Lawyer

Before you sign a contract with a contractor, it is a good idea to have your contract reviewed by an experienced lawyer.  A lawyer can catch any clauses that may put the homeowner at risk (such as clauses that will void the warranty, etc). They can also ensure that the contract is fair and that you understand all the clauses and terms. Some homeowners have no experience with renovations or contractors and may not know what needs to be in a contract. Lawyers can help fill in the gaps and make sure the necessary terms are outlined clearly.

Having a lawyer review any renovation contract you want to enter into is the best way to protect yourself.  In the event that a lawyer has reviewed your contract or not, and a dispute arises, contact one of our Calgary construction lawyers to help you figure out what your next steps should be. At HMC Lawyers, we have the experience and skills to review your contracts and provide legal guidance to resolve your disputes as efficiently as possible. Call us at 1-800-480-3534 or contact us online to make an appointment today. With offices in Calgary, we represent professionals in Calgary, throughout Alberta, and across Western Canada.

 

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Contact HMC Lawyers for Exceptional Legal Guidance

At HMC Lawyers, we offer strategic legal advice. Our breadth of practice experience allows us to promptly handle almost every litigation-related legal issue that may arise, and anticipate potential roadblocks that may delay its resolution. To make an appointment with a member of our team, contact us online or call 403-269-7220

For articling student inquiries please contact Sean Jeffers at 403.261.3329 or sjeffers@hmclawyers.com

HMC Lawyers LLP
#320 903 8th Ave SW
Calgary, AB
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