Contractor Agreements: What Property Owners Should Watch For

Most contractor disputes don't start on the job site. They start in the agreement, in the language that wasn't specific enough to prevent a disagreement later.

Here's what to look for before you sign one for any property you own.

Scope of work that's actually specific. "Renovate the kitchen" is not a scope of work. Materials, finishes, timelines, and what counts as included versus an add-on should all be written down, because vague scope is the single most common source of cost disputes.

A payment schedule tied to milestones, not just a deposit. Large upfront deposits with no clear draw schedule tied to completed work give you very little leverage if the job stalls.

Lien waiver requirements at each payment. Here's the part many property owners don't know: you can pay your contractor in full and still end up with a mechanic's lien on your property if your contractor didn't pay a subcontractor or supplier. A lien waiver at each payment stage protects you from that.

Verified license and insurance, not just a claim of it. Ask for a certificate of insurance naming you, and verify the license number directly with your state's licensing board rather than taking it on faith.

A written change order process. Verbal "while we're in there" additions are how a fixed-price job turns into a billing dispute. Every change in scope should require a written change order before the work happens, not after.

Warranty language that's actually present. Many agreements are silent on warranty entirely, which leaves you with no recourse if something fails shortly after completion.

A timeline with a remedy for delay. Without a completion date and some consequence attached to missing it, there's little incentive for the job to actually finish on schedule.

None of this requires distrust of your contractor. It requires a document that protects both of you equally, and that's worth a quick review before either of you signs.