Your Remodeling Contract: What to Check Before You Sign

A remodeling contract is the only thing that survives a disagreement. Not the conversation on the driveway, not the text message, not what somebody clearly meant. If it matters and it is not written down, it does not exist.

This is what to look for, clause by clause, whoever you end up hiring. It applies just as much to a proposal we write as to one you receive from anyone else.

Before the contract: the proposal is the evidence

A proposal is a company's writing sample. Careful thinking shows up as specifics, exclusions and a stated process. Careless thinking shows up as adjectives and one number at the bottom.

If you have not yet chosen who to work with, that assessment comes first, and it is a different exercise from reading the paperwork. Our guide on vetting the company first covers the licence, insurance and reference checks that a contract cannot substitute for.

What a remodeling contract has to contain

Michigan licenses residential builders and requires that licence to be identified on residential contracts, so its absence is the first thing to notice. Beyond that, a workable agreement identifies the parties and the property, incorporates a written scope, states the price and how it was arrived at, sets a payment schedule, addresses start and completion, and defines how changes are handled.

Read what it says about documents. Drawings, specifications, selection schedules and allowance lists should be named as part of the contract, not sitting loose in an email thread. If the drawings are not incorporated by reference, they are not binding.

Scope of work: the section that decides every argument later

Almost every remodeling dispute is a scope dispute wearing a costume.

A good scope is written trade by trade and specific enough to check. Not "update electrical" but the circuits, the devices, the fixtures and whether existing wiring is being brought up to current requirements. Not "install flooring" but the material, the underlayment, the transitions and who prepares the subfloor. Not "paint" but which surfaces, how many coats, and what happens with the ceilings.

Then read the exclusions, which are more informative than the inclusions. A scope with no exclusion list has not been thought through, because every real project has boundaries. Watch for the common ones: subfloor repair, drywall repair beyond the immediate work area, asbestos or lead conditions, structural work found during demolition, and appliance installation. Excluding them is legitimate. Failing to mention them is not. The range of trades a company can actually carry is worth checking against your scope, which is what our what we build page is for.

Allowances and selections

Allowances are placeholders for things you have not chosen yet. They are normal and they are honest, and they cause more end-of-project friction than any other single mechanism.

Ask what each one assumes: which grade of material, whether setting materials, trim pieces and edge details are included, whether installation labour sits inside or outside the allowance, and what happens if you select under it rather than over. A refund clause on under-selection is a small thing that tells you a lot about who wrote the document.

Allowances should also carry deadlines. A selection made late is the most common cause of a schedule slipping, and the contract should say who chases what and by when. Applied to a real project, a basement finish is a good worked example: flooring, tile, fixtures, lighting and trim can all be allowances at once.

The payment schedule and what a fair one looks like

Payments should attach to progress, not to the calendar. Completion of demolition. Completion of rough-in and passing inspection. Delivery of cabinetry. Substantial completion. Each of those is checkable by looking at the house.

A schedule tied to dates pays for time rather than for work, which is the wrong incentive on a project that might slip for reasons nobody controls. Hold back a meaningful final payment until the punch list is complete, and make sure the contract says so.

Change orders belong in writing before the work happens

The clause you want states that no additional work proceeds without a written change order signed by both parties, describing the work, the price, and the effect on the schedule. It should also state how additional work is priced: a fixed figure, or time and materials with a stated markup and a cap.

The failure mode is a verbal agreement in week two that turns into a line on the final invoice in week nine. Nobody is lying. Two people simply remembered a hallway conversation differently. The mechanics of doing this well are in our guide to how a change order should be priced and approved.

Permits, responsibility and the clause people skip

The contract should say who applies for permits, who pays the fees, and who is present for inspections. This looks administrative and is not. A homeowner who pulls a permit for work a contractor performs has taken on responsibilities that were meant to sit with the licensed builder.

If a contractor asks you to pull the permit yourself, ask why, and read our explanation of who is responsible for pulling them before you agree.

Schedule, delay and what completion means

Expect a start window and a duration rather than a guaranteed finish date, because material lead times and inspection scheduling are genuinely outside a contractor's control. What you should insist on is a defined trigger for the start, a stated duration, a named list of excusable delays, and a communication commitment: how you will be told when something moves.

Define substantial completion explicitly. It usually triggers a payment, starts a warranty period and sets the punch list deadline, and it is the worst thing in the world to be negotiating in week eleven of a long project.

Warranty, lien waivers and closing the job out

Look for a written workmanship warranty, stated separately from the manufacturer warranties on the products, with a period and a process for making a claim. Manufacturer coverage on a faucet tells you nothing about whether the person who installed it will come back.

Ask for lien waivers as progress payments are made. Under Michigan's construction lien law, an unpaid supplier or subcontractor can pursue a claim against your property even when you have paid your contractor in full, and waivers are the ordinary protection against that. Requesting them is routine, not adversarial.

Finally, closeout: a documented punch list, a completion walkthrough, warranty documentation, manuals, and any inspection sign-offs handed over. How a company behaves in that last week is what how clients describe the way we work tends to reveal most clearly. If you have a proposal in front of you and it does not look like the document described here, send us the drawings and we will write a real scope against them so you have something to compare.

Frequently asked questions

What has to be in a remodeling contract in Michigan?

At a minimum: the parties, the property, a written scope of work, the price and how it is calculated, a payment schedule, the start and completion arrangements, how changes are handled, and the contractor's state licence details. Michigan requires licensed residential builders to identify their licence on residential contracts, so its absence is a signal worth taking seriously. Anything described verbally and not written down is not part of the agreement.

Is a large deposit normal?

A deposit is normal. A large one is worth questioning, and the structure matters more than the size. Payments should be tied to identifiable progress, such as completion of rough-in or delivery of cabinetry, rather than to dates on a calendar. A final payment should be held back until the punch list is complete, the site is clean and any required inspections have passed.

What is an allowance, and how do I stop it becoming a surprise?

An allowance is a placeholder for something not yet chosen, such as tile, fixtures or countertops. Stop it becoming a surprise by asking what each allowance assumes: which grade of material, whether setting materials and trim are included, whether installation labour is inside or outside the allowance, and what happens to the price if you select under it. Allowances set unrealistically low are the most common way a bid is made to look competitive.

What is a lien waiver and why should I ask for one?

Under Michigan's construction lien law, suppliers and subcontractors who are not paid can have a claim against your property even if you have paid your contractor in full. A lien waiver is written confirmation from those parties that they have been paid for the work covered by that payment. Asking for waivers as progress payments are made is normal practice and it is your protection, not a sign of distrust.

What does substantial completion actually mean?

It means the work is finished enough for you to use the space for its intended purpose, with only minor items outstanding. It is worth defining in the contract because it usually triggers a payment, starts a warranty period and sets the deadline for the punch list. Without a definition, it becomes whatever the two of you argue it is at the end of a long project, which is the worst possible time to negotiate.