What has to be in a home improvement contract in Virginia?

Virginia requires a written, legible contract for residential work, signed by both you and the contractor before work starts or any payment is accepted. The Board for Contractors also sets minimum contents. A contract that leaves them out is a warning sign, and it leaves you with less to stand on if the job goes wrong.

The rule

Under the Board for Contractors regulations, those who engage in residential contracting must make use of a legible written contract clearly specifying the terms and conditions of the work to be performed.^[2] The regulations define residential contracting as construction, removal, repair, or improvements to single-family or multiple-family residential buildings, including accessory-use structures.^[2] Subcontractors and routine maintenance or service contracts are excluded.^[2]

Prior to commencement of work or acceptance of payments, the contract shall be signed by both the consumer and the licensee or the licensee's agent.^[2] The contractor must also promptly deliver a fully executed copy to you before work begins.^[2]

The minimum contents

The regulations list what the written contract must contain.^[2] In plain language:

• When work begins and the estimated completion date.
• The total cost, stated according to the type of contract. For a standard total value project that is a statement of the total cost of the project. For cost-plus it is a statement identifying the type of cost-plus contract, fee or percentage, and a cap that the total dollar amount cannot exceed. For time and materials it is a fixed price for labor that includes wages, overhead, general and administrative costs, and cost of materials.
• Progress payments. The amounts and schedule for progress payments, including a specific statement on the amount of the down payment.
• The work and materials. A listing of specified materials and work to be performed, which is specifically requested by the consumer.
• A delay clause. 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 timeframes for payment or performance.
• Permits and inspections. A statement of assurance that the contractor will comply with all local requirements for building permits, inspections, and zoning.
• Cancellation rights. Disclosure of the cancellation rights of the parties.
• Consumer protection acknowledgment. A signed acknowledgment by the consumer that the consumer has been provided with and read the Department of Professional and Occupational Regulation statement of protection available to consumers through the Board for Contractors.
• Who the contractor is. The contractor's name, address, license number, class of license, and classifications or specialty services.
• Change orders. A statement providing that any modification to the contract that changes the cost, materials, work to be performed, or estimated completion date must be in writing and signed by all parties.
• The Recovery Fund. A statement notifying consumers of the existence of the Virginia Contractor Transaction Recovery Fund that includes information on how to contact the board for claim information.

What the state's guide adds

The regulations are a floor. For a whole-house project the Board's consumer guide advises going further. It says the contract should specify all materials to be used, such as quality, quantity, weight, color, size, or brand name as it may apply.^[1] It should include everything you consider important, including complete cleanup and removal of debris and materials.^[1] If you intend to do some of the work yourself or hire another contractor to do it, the guide says that also should be written into the contract.^[1]

On money, the guide suggests a draw schedule based on progress made toward project completion, never on dates alone, retention of a percentage of each payment or of the total job, ordinarily 10 percent, until the job is completed, and no payment of 100% of the bill until the work is 100% complete.^[1] Its rule of thumb for the first payment is an initial deposit of no more than 10% of the total price or $1,000, whichever is less, with up to 30% of the total contract value possible for custom-made or special-order items.^[1] More detail is in how much deposit a contractor can ask for in Virginia.

On permits, the guide says the contractor should apply for and obtain any necessary building permits, that this should be spelled out in your contract, and that otherwise you may be held legally responsible for failure to obtain any required permits.^[1] It warns that anyone who tries to talk you into getting your own building permit is not doing you any favors, because the permit holder becomes the general contractor and assumes responsibility for the overall job.^[1]

Before you sign

Anything you sign could be used as authorisation to go forward, and the guide says any bid or estimate you sign may become the contract.^[1] Read the whole document, ask about anything you do not understand, and consider having an attorney review the contract, plans and specifications. Attach the plans and a scope that names every room and system, and make sure the permit applications match the work as written.

After signing, keep a job file. The guide lists the signed contract and any change orders, plans and specifications, permit applications and permits, canceled checks, lien releases from subcontractors and material suppliers, and photographs or video of the job.^[1] Contractors must also keep a complete and legible copy of all documents relating to the contract, including addenda and change orders, for five years from the date of contract.^[2]

Also see how long a whole-house renovation takes and what it costs in Virginia, and what the Recovery Fund covers.

When to call a licensed pro

Hire a licensed contractor, and put their licence number and class in the contract. In Virginia a Class C contractor handles a single contract over $1,000 but less than $30,000, Class B handles $30,000 or more but less than $150,000, and Class A handles $150,000 or more.^[3] Whole-house work often falls in the upper two. Failing to make use of a legible written contract is itself a listed violation of the Board's regulations,^[2] and so is contracting with an unlicensed or improperly licensed contractor or subcontractor.^[2] Check the licence first.

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