Contract a good idea for home renovations

In simpler times, many of us did the majority of our business on a handshake. These days, it’s advisable to get an agreement in writing, especially when a lot of money is involved.

When undertaking something as major as renovations to our homes, a contract is not only a good idea, it’s a requirement of Maine law. The Maine Home Construction Contracts Act states that any home-building or repair work totaling more than $3,000 in materials and labor must be based on a written contract. That contract has to include details on price, a description of the work and the estimated completion date. If contractors do not use a written contract to comply with the law, they can face a fine of up to $1,000.

Use of a contract is a necessary safeguard of homeowners’ rights. A contract also protects the builder from unreasonable demands or expectations on the part of the homeowner. While the requirements of Maine’s law are meant to protect the parties involved, they are not meant to be rigid.

A provision of the law allows a contractor and homeowner to agree to exempt themselves from some requirements or even the entire law. To qualify for such an exemption, the contractor must make sure the homeowner knows his or her rights under the law; then, both parties must agree to a contract or change order that does not comply with the written contract law.

The Maine Attorney General’s Web site includes a model contract for construction projects. Some contractors may not want to have all of the provisions listed in the model contract included in their standard contract. If that’s the case, those contractors should inform homeowners of what’s missing, that is, which requirements of the law are not being met. Both parties must agree to the deviation, but the homeowner has a right to know where a contract falls short of meeting statutory requirements.

One way that contractors can meet the requirements of the law is to design a contract that states explicitly where the law is not being met. The law says no more than one-third of the total payment must be paid in advance. The contractor could have a printed contract stating that a 40 percent down payment is required and that state law cannot force a down payment larger than one-third; if both parties sign off on the higher amount, it’s a legal contract.

If disputes arise down the road, there are a number of ways to resolve them. The same law allows the parties to choose methods of resolving the dispute, usually mediation or arbitration. While the law does not require the parties to do so, the dispute resolution path usually has better, faster results than taking the matter to court.

Since contractors are not required to be licensed in Maine, it pays to shop around. Ask friends and neighbors for recommendations as a starting point. And you may call us at Northeast CONTACT for a reputability check.

Consumer Forum is a collaboration, now in its 30th year, of the Bangor Daily News and Northeast CONTACT, Maine’s membership-funded nonprofit consumer organization. Individual and business memberships are available at modest rates. Interested and motivated prospective volunteers are always needed and welcomed to apply to help with our mission. For assistance with consumer-related issues, including consumer fraud and identity theft, or for more information, write: Consumer Forum, Bangor Daily News, P.O. Box 1329, Bangor ME 04402-1329.