Construction Law Tips for Contractors and Homeowners on Remodeling Projects
An unexpected effect of the pandemic has been a surge in housing starts and home remodeling. While things initially looked dire for the construction industry, low interest rates, stimulus money, and other policies have led to a spike in mortgage originations and a boom in home remodeling.
The areas of home building and remodeling are particularly ripe for disputes. Purchasing and/or remodeling a home is one of the single largest expenses one can expect to incur during his or her lifetime and consumers generally take these expenses seriously. There are certain construction law tips contractors and homeowners alike should keep in mind when entering into these transactions.
Make Sure You have a Written Contract
Your home remodel transaction is governed by the Indiana Home Improvement Contract Act (“HICA”). HICA is a consumer protection statute that imposes certain minimum requirements on contractors engaging in all types of home improvement, from plumbing and electrical work to interior remodeling. Under HICA, contractors must provide the homeowner with a written contract containing certain terms, including the following:
- The name, address, email, and phone number of the person responsible for the work
- The estimated start and completion dates
- A reasonably detailed description of the work to be done
- Signature blocks for both the contractor and the consumer
- The contract price
- Notice as to whether or not any of the work will be subcontracted
If your contract is missing any one of these required provisions, the contract is in violation of HICA, and a consumer may have a private cause of action against the contractor.
Keep It in Writing
It is important that homeowners and the contractors have a clear expectation as to what the work entails. While HICA requires the contract to provide a reasonably detailed description of the work, best practice is for homeowners go further, e-mailing the contractor if necessary and setting forth each and every aspect of the work they expect the contractor to perform. For example, just because a consumer hires a painter to paint the interior of a home does not mean that the painter intends to thoroughly prepare the surfaces for painting, e.g., caulking cracks, repairing nail pops, and sending the trim. While it may seem like a reasonable assumption that painting would include this prep work, a consumer should have a discussion with the contractor and confirm that he or she is on the same page. Further, it is preferable for these communications to occur in writing to avoid difficulties proving whether a breach of the agreement occurred if things go south.
The same goes for contractors. Litigation has occurred after situations in which contractors have experienced a complete breakdown in their relationship with the homeowner. This can result in a scenario where the contractor claims to have been kicked off of the job while the homeowner insists the contractor abandoned the project. In these instances, it is important that the contractor write to the homeowner explaining that he or she is ready, willing, and able to resume the work once he is or she is permitted access to the premises. This can prevent a he said/she said scenario where both parties blame the other for failing to complete the project.
Solicit Multiple Bids
Most consumers hire contractors based upon referrals. Sometimes it works out. Sometimes it doesn’t. In either event, it is important to solicit multiple bids and have a discussion with each contractor concerning your expectations and what you hope to accomplish. Ultimately, the contractor and the homeowner are partners working to achieve the same goal. Thus, the parties must be on the same page from the beginning of the project. Further, knowing what you want to accomplish will better allow you to ask the right questions and more effectively evaluate the potential contractor.