Securing a reputable contractor can be a challenging endeavor, but there are several preventive measures you can take to minimize your liability exposure. Like most professional services, contractors are required to fulfill contractual obligations and adhere to a schedule outlined in an initial agreement. Communication is key to establishing a successful business relationship and can help simplify the overall renovation process.
Nate Armstrong, the Investor Relations Chair for Home Invest, claims that businesses can take multiple steps to ensure all deliverables are met, from drawing up the necessary documents to defining terms and provisions. Preparation is essential; taking the time to implement a contingency plan may save your business both time and money.
Nate Armstrong discusses preventive measures businesses can take to avoid potential pitfalls with a contractor:
Draw Up a Master Contract
A formal written agreement is the first step in defining a working relationship with a contractor. This should outline the conditions of their employment. The initial contract also ensures all financial components are secure, including a payment schedule and material costs.
Businesses often have the option of modifying generic language or boilerplate provisions to help reduce ambiguity. Nate suggests that to avoid unclear limitations on liability, all verbal correspondence should be documented and you should maintain an organized folder of all payment receipts.
Define the ‘Scope of Work’
When hiring a contractor, it is essential that businesses take the time to define the ‘scope of work’ which lays out a set of deliverables and provides an estimated time of completion. Terms of the agreement should include implementing realistic expectations and taking into consideration certain external factors which may delay or slow down the renovation process.
Both parties should have a clear understanding of anticipated deadlines and expectations. Ultimately, a well-defined scope of work will prevent potential legal disputes and ensure successful completion of a project.
Include Specific Terms & Provisions
It is crucial that a contractor understand the terms that govern the contract. Quite often, unforeseen circumstances alter a project schedule or cost. The professionals at Home Invest state that both parties should agree on certain provisions ahead of time in case additional work arises.
Similarly, including a reference point will help determine whether or not there has been a breach of contract. An agreement should cover grounds for termination and a course of action if any obligations are not met.
Working with a Professional such as Nate Armstrong
The Home Invest team works with local field operators to hire reputable contractors for all of their property renovations. Taking the necessary precautions will help businesses avoid setbacks. Likewise, the resolution of disputes and implementing contingencies will allow businesses flexibility in their agreement.
Currently residing in Milwaukee, Wisconsin, Nate Armstrong of HomeInvest leads a team helping investors with their real estate ventures. For more information visit https://nate-armstrong.com.