Do I Need a Construction Contract? If You’re Doing Residential Construction, the Answer is YES!

by Quinton B. Callahan

Nobody wants to deal with paperwork, especially contractors.  However, a well written contract will not only ensure your construction company is complying with Virginia Law, but it can also protect you should a job go south. 

The Virginia Department of Professional and Occupational Regulation (“DPOR”) regulates the construction industry via the Board for Contractors.  The Board has the authority to license and regulate construction professionals.  One of those regulations includes the requirement that contractors engaged in residential contracting, except for those who perform routine maintenance or service or are hired as subcontractors, must have a written contract that clearly specifies the terms and conditions of the work to be performed. 

The Virginia Administrative Code defines residential contracting as “construction, removal, repair, or improvements to single-family or multiple-family residential buildings, including accessory-use structures.”  Does roofing count? YES.  What about paving a driveway? YES.  Remodeling a bathroom? YES! Adding a small porch? YES!!!  If you are performing work at a residence, you need a written contract, no matter how small the job. 

Before you start working, a contract must be signed by both the owner (or his agent) and the contractor.  At a minimum, your contract must have the following terms:

  • When work is to begin and the estimated completion date;
  • The total cost of the contract and the amounts and schedule for progress payments including a specific statement on the amount of the down payment;
  • A listing 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 timeframes for payment or performance;
  • A statement of assurance that the contractor will comply with all local requirements for building permits, inspections, and zoning;
  • Disclosure of the cancellation rights of the parties;
  • For contracts resulting from a door-to-door solicitation, a signed acknowledgment 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 services;
  • A 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; and
  • Effective with all new contracts entered into after July 1, 2015, 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.

If you’re performing residential work without a written contract, or without a written contract that contains these provisions, you’re in violation of DPOR Regulations and could face a fine or license suspension.  While a contract containing these minimum provisions will keep you from facing a DPOR violation, it will not protect you if a job goes south. 

If you find yourself dealing with an angry homeowner, you’ll want to ensure meaningless claims against you are stopped before you find yourself in court.  Contract provisions can ensure that workmanship quality is carefully defined and described.  Mediation and Indemnification provisions protect you and your company from lengthy and costly litigation.  If you need help preparing or updating a construction contract, please contact an experienced construction attorney to assist you.