Toronto Star ePaper

What type of home renovation contract do you need?

Dave Wilkes David Wilkes is president and CEO of the Building Industry and Land Development Association (BILD) and a contributor for the Star. Follow him on Twitter: @bildgta

A question we get quite frequently at BILD is: why are there different types of renovation contracts?

A written contract is an important part of a home renovation project. A renovator may recommend or use a certain type of contract depending on the nature, duration and potential cost of a project. Understanding the differences and the particulars is important.

There are three contract types that are most commonly used: the traditional lump sum contract, the design-build contract and the construction management contract. The differences between them start at the beginning of the renovation. If the homeowner is working with a professional renovation contractor, like those who participate in the RenoMark program, this professional can further explain the benefits and risks associated with each type of contract. á Traditional lump sum contract: This process starts with the homeowner working with a designer to develop what the renovation will look like, including the selection of finishes such as tiles, paint, light fixtures, etc.

Once a design is complete, the homeowner should get three, fixed-price quotes for the cost to complete the designer’s project from different contractors. Any changes or errors in the design may be charged back to the homeowner as extras.

In a renovation, there are always unknown conditions that are hidden at the time of the design and need to be addressed during the construction process.

It is also important to note that the homeowner is the person who needs to manage contracts and coordinate any changes between the contractor and the designer. á Design-build contract:

This contract type makes the design/build contractor the only point of contact that the homeowner needs to coordinate with.

In this process, the homeowner hires the design/build contractor at the beginning of the entire process. That professional design is then responsible for using their staff and network to secure the designers and the trade contractors for the project.

The homeowner sets a project budget with the design/ build contractor, which they will then design and work toward. An additional advantage of this contract type is that you can start construction knowing what the final finishes are going to be.

á Construction management contract: In this contract type, the homeowner will pay the contractor for their management services separate from the renovation costs (like materials and labour). The homeowner is able to make any changes they want during the design and construction.

The advantage of this contract type is that the homeowner can have the full transparency of the costs for everything. This also means that the contractor doesn’t get to increase costs associated with changes that are requested.

All RenoMark renovators must provide their clients with a written contract as outlined in the RenoMark Code of Conduct. To find a Renomark renovator near you, visit RenoMark.ca.

HOMEFINDER.CA

en-ca

2021-07-31T07:00:00.0000000Z

2021-07-31T07:00:00.0000000Z

https://torontostar.pressreader.com/article/282587381018132

Toronto Star Newspapers Limited