What Homeowners Need to Know about Protecting Themselves Against Unscrupulous Contractors, Part III: Terms of a Valid Construction Contract

contract-under-a-magnifyig-glassIn Part I of our four-part series on protecting yourself against unscrupulous contractors, we discussed Virginia licensing requirements. In Part II, we explored the types of payment contracts. Here in Part III, we’ll look at the elements that are required for a valid Virginia Residential Construction Contract.

Part III: Terms of a Valid Virginia Construction Contract

Simply said, by Virginia law, a construction contract must lay out the following terms:

  1. The parties involved
  2. Description of the project
  3. Time of performance
  4. Cost

In more detail, the terms of a residential contracting written contract must contain the following minimum requirements:

  • When work will begin and estimated completion date
  • Statement of the total cost of the contract and the amounts and schedule for progress payments, including a specific down payment statement
  • List of specified materials and work to be performed, which is specifically requested by the consumer
  • A “plain-language” exculpatory clause concerning events beyond the control of the contractor and a statement explaining that delays caused by such events do not constitute abandonment and are not included in calculating time frames for payment or performance
  • Disclosure of cancellation rights of the parties
  • For contracts resulting from a door-to-door solicitation, a signed acknowledgement by the consumer that he has been provided with and read the Department of Professional and Occupational Regulation statement of protection available to him through the Board for Contractors
  • Contractor’s name, address, license number, class of license, and classifications or specialty service
  • Statement providing that any modification to the contract, which changes the cost, materials, work to be performed, or estimated completion date, must be in writing and signed by all parties.

General conditions of the contract that must also be defined include:

  • Responsibilities
  • Representatives
  • Schedule
  • Insurance/bonds
  • Differing site conditions
  • Changes in the work
  • Delays
  • Payment/retainage/release of liens
  • Hazardous materials
  • Warranties
  • Termination
  • Dispute resolution
  • Choice of law
  • Attorney fees

All parties must be provided with a legible written contract clearly specifying the terms and conditions of the work to be performed, and prior to commencement of work or acceptance of payments, the contract shall be signed by both the consumer and the licensee or his agent. As defined, residential contracting refers to construction, removal, repair, or improvements to single-family or multiple-family residential buildings, including accessory-use structures.

How to Verify Your Construction Contractor

You may want to check out your contractor before signing a contract. Here are some places and ways you can verify their credentials and record (includes Fairfax, VA-specific):

Want Help Negotiating a Construction Contract? Call Först Consulting Group

Making sure your construction contract is valid, contains the right terms, and serves both parties is tricky, and it is best to get it right before you sign. If you need help reviewing or negotiating the terms of your Virginia construction contract, contact Först Consulting Group.

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