What should be in a home remodel contract?

State law sets minimum required elements for residential contracts; industry best practice layers additional protections on top. A thorough contract reduces disputes by 80%+.

Essential scope elements:

1. Detailed scope of work — room-by-room breakdown. Specific products, dimensions, finishes.
2. What's NOT included — explicit list of excluded items.
3. Allowances — dollar amounts for categories where selections are TBD.
4. Specifications — separate document listing every material with brand, model, color, quantity.

Essential financial elements:

1. Total contract price.
2. Draw schedule — percentage or dollar amount tied to milestone.
3. Retainage — percentage held from each draw (5-10%).
4. Change order procedure.
5. Allowance reconciliation.
6. Payment method.
7. Late payment remedies.

Essential schedule elements:

1. Start date.
2. Completion date.
3. Delay language (force majeure).
4. Liquidated damages (if applicable).

Essential legal elements:

1. Contractor's license number and class.
2. Contractor's bond and insurance certificates.
3. Permit responsibility.
4. State-required lien disclosures.
5. Lien waiver requirements.
6. Insurance requirements.
7. Indemnification.

State-specific required disclosures:

• California (Bus & Prof §7159) — written contract required for residential over $500; license number, bond info, MRL disclosure, deposit limit statement, 3-day right of rescission.
• New York (GBL Article 36-A) — written contract required for over $500; 3-day cancellation notice; specific consumer rights disclosure.
• Florida (Chapter 489) — written contract required; license info; rights of mechanic's lien.

Warranty and defect provisions:

1. Warranty period — 1-year workmanship warranty standard.
2. What's warranted — workmanship, materials, code compliance.
3. Exclusions — normal wear, damage by homeowner, acts of God.
4. Warranty procedure.

Dispute resolution:

1. Mediation first (optional).
2. Arbitration — particularly for California contracts $12.5K-$50K.
3. Venue and law.
4. Attorney's fees — prevailing party language.

3-day right of rescission:

• Federal Truth in Lending Act and most state consumer protection laws require a 3-business-day right to cancel residential home improvement contracts.
• Must be explicitly disclosed.

Insurance and license verification attachments:

• Copy of contractor's license.
• Certificate of insurance naming homeowner as additional insured.
• Bond certificate.

AskBaily's contract template includes every element above plus state-specific attachments for California, Florida, New York, and Texas.