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News: Blaine

Posted on: January 17, 2022

Building Inspections Corner: Contract Checklist

Residential Inspection-15

A contract with a builder or remodeler should be specific and detailed. It should include the kinds of materials to be used and, when possible, specify brand names, colors, grades, styles, and model numbers. The contract should also include the names of any subcontractors and suppliers of material.

Items to look for in a contract:

  • Building permits: The contractor should obtain the necessary permits, if the customer obtains the permits, they are responsible for ensuring code compliance for the project. 
  • Start and completion dates:  Delays can and do occur, but a general statement allowing for reasonable delays is a good idea.
  • Change order clause: This is an agreement stating the contract cannot be modified without the written consent of both parties. 
  • Schedule of payments:  A down payment is customary, but it should not be more than a modest percentage of the total job. Additionally, a payment schedule might be set up based on the amount of work done to date. 
  • Holdback clause: This allows withholding payment until sometime after the job is completed, allowing time for the homeowner to inspect the job. 
  • Cleanup: This should be included in the contract, especially if a project is likely to create debris.

Understanding Liens:

Any contractor, subcontractor, or material supplier may file a mechanic’s lien against the property where they worked if they are not paid for their labor or materials. State law allows a consumer to pay a subcontractor directly and deduct that amount from the total contract price. Another option is to withhold that amount from the contractor for 120 days after the work is completed, unless the contractor has provided waivers signed by the contractors who give up their right to file a lien against the property. Minnesota law provides procedures and conditions that protect homeowners from being the target of an unfair mechanic’s lien, though only a court can determine whether a lien is valid.

For help with a dispute with a residential contractor call 800-657-3944 (press 5) or email [email protected].

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