7 Things To Look Out For When Signing A Renovation Contract, So You Won’t Be Disappointed

10 February 2022 | BY

Spare an extra couple of minutes to look for these seven things before signing your renovation contract to avoid disappointments and delays.

reno contract signing cover

We’ve all been guilty of skipping the terms and conditions, scrolling automatically to the bottom and accepting them without a second thought. However, if there’s one thing that we should spare an extra couple of minutes scrutinizing, it’s the fine prints on renovation contracts.

Doing so will not only ensure that your dream home will turn out the way you want, it’ll also protect you from a slew of complications and disappointments should you and your contractor not be on the same page. Here are seven things to look out for when signing a renovation contract:

1. Is the scope of the work accurately stated by the contractor?

reno contract signing quote example
Example of a quote
Image adapted from: Uchify Team

While the objective of a renovation project may appear to be simple and straightforward, there’s various factors you need to consider as well. This includes the nitty gritty details from the material type to the dimensions of any carpentry, down to the brand of hinges to use. When you lay out the scope of work, you should pour over every single detail with your contractor first before signing the contract, no matter how tedious it gets.

For example, a detailed scope of work on a master bedroom would include very specific details such as having a built-in full height wardrobe in laminate finish (500x300CM), a door design with matching ABS trimming, and black PVC finish. You should also take note of any price exclusions, such as the choice of materials in the final cost of the contract. 

2. Is the renovation schedule clearly laid out?

reno contract signing schedule
Image credit:

Having a start date and end date is simply not enough, because while renovations are being carried out, your personal schedule will be affected, especially if you’re staying in the house during renovations. 

For example, you can’t assume that your bedroom being 50% done by a certain date means that you can start sleeping there. It’s best to have a concrete date set for every step of the process, including what will be working and accessible during specific steps, such as the plumbing or electrical wirings. Nothing is worse than having unrealistic expectations about certain dates on deliverables, so make sure everything is laid out neatly in a timeline from the start.

3. Is the work covered under warranty?

As with all things expensive, it’s best to have a warranty in case things don’t go as planned. However, not every renovation contract comes with one, so you need to keep track of the items that are under warranty during renovation in your house. Sometimes the contractors may make a mistake and do a faulty installation, which is grounds for you to claim your warranty.

This extends not just to overall fixtures, but even the materials can have their own warranty as well. Do take note of the period of time where warranty applies, its starting date (after defects are rectified), and any exclusions.

Sometimes within the contract, a liquidated damages clause will be included. This clause states the amount of damages which a party has to pay the other whenever there’s a breach in the contract. If the contractor breaches the contract, you can claim the amount of damages stated in the liquidated damage clause instead of having to prove and quantify the exact amount of your losses first.

4. Who will manage subcontractors and third party contractors for the job?

Sometimes there’s a need to hire subcontractors or third party contractors to work on certain areas of the renovation project where your main contractor lacks the skills or expertise. These are usually for the more niche installations, but the need does arise now and again. 

However, the management and payment of the subcontractors and third party contractors should all be done by the main contractor you’re hiring. In other words, the contract should state clearly that any secondary contractors should be paid for and managed by your main contractors, a.k.a. you shouldn’t be micromanaging the entire process.

5. Is there a termination clause within the contract?

While we all hope that the renovation of our dream home goes smoothly without a hitch, we should still be prepared for unforeseen circumstances.In order to avoid any legal troubles down the road, it’s best to include a termination clause just in case renovation has to stop for whatever reason.

Termination refers to the case where one of the parties in the contract has defaulted, meaning that they failed to complete what is stated in the contract. For your own benefit, you should include a clause where you get to determine when to stop renovations should the renovation company fail to deliver on their promise. This way, you can set the terms of only having to pay up till whatever renovation works have been completed, instead of the full extent.

6. Are there hidden fees that you’re unaware of?

No one likes to feel like they are being scammed, mainly when it comes to paying the final bill only to find out that it’s much more than what was initially agreed upon. This applies to renovation contracts as well, especially with hidden fees that you’re unaware of.

To prevent this, make sure to run through the contract with your renovation contractor and confirm that every cost within the project is accounted for. This includes the nitty gritty details like painting, cement screeding, electrical wiring and bathroom accessories. Also check if the prices overall are subjected to GST as well, since some renovation contractors may charge it as part of the package.

7. What’s the payment schedule and pricing? 

Most importantly, when it comes to signing a contract, you’ll want to know how much the entire project will cost you and when the deadlines are for payment. A good rule of thumb to follow is to break the payment schedule down according to the stages of the deliverables. For example, only pay a certain amount when the master bedroom is completed, and pay another percentage when the plumbing is done.

reno contract schedule payment schedule FB
Image adapted from:
Budget Reno (Singapore)

You may also want to look out for extras and exclusions that might jack up the price, and make sure that you clarify with the contractor should you see words like “estimated cost” in your contract. A tip here is to join social media groups like this Facebook group that give you insight into how others break down their payment schedule. 

Things to look out for when signing a reno contract

As you take one step closer to getting your dream home, it’s easy to get tunnel vision and only focus on the end product. However, you should always pour over the finer details with your contractor before you plunge head first into renovating. This could potentially save you a lot of heartache, and will also ensure that you and your contractor will be on the same page.

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