Home Improvement Contracts: What Should Be in Writing Before Work Starts
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In this article
A solid contract protects both parties. Learn the key clauses homeowners should look for before signing any home improvement agreement.
Key Takeaways
- A written contract is legally enforceable in ways that verbal agreements typically are not.
- Every contract should clearly define scope, timeline, payment schedule, and materials.
- Permit responsibility and lien waiver provisions protect homeowners from hidden liability.
- Change orders must be documented in writing before any extra work begins.
- Always verify contractor license, insurance, and references before signing anything.
Why the Contract Is the Most Important Document You'll Sign
Hiring a contractor without a solid written agreement is one of the most common — and costly — mistakes homeowners make. Verbal promises fade, memories differ, and disputes over scope, cost, or timelines are far harder to resolve without a paper trail. A well-drafted contract protects both parties by setting shared expectations from day one.
Before you sign, it helps to know what a professional contractor's agreement should actually contain. Whether you're remodeling a bathroom or replacing a roof, the checklist below covers the non-negotiable clauses, strongly recommended provisions, and useful additions worth requesting. If you're still deciding whether to hire out or go the DIY route, see our guide DIY vs. Hiring a Contractor for a framework on that decision first.
Never Rely on Verbal Agreements
In most states, home improvement contracts above a certain dollar amount are legally required to be in writing. Even when not legally mandated, verbal agreements are extremely difficult to enforce if a dispute arises. If a contractor resists putting terms in writing, treat that as a significant warning sign. Do not allow work to begin until a signed contract is in hand.
Before You Even Get to the Contract
The quality of your contract means little if the contractor behind it isn't qualified or insured. Before negotiations begin, take time to verify the basics. Most states require contractors to hold a license for work above a certain dollar threshold — check your state's contractor licensing board to confirm. Ask for proof of general liability insurance and workers' compensation coverage, and contact the insurer directly to verify the policy is active.
Also understand who will physically be performing the work. On larger projects, general contractors commonly delegate tasks to subcontractors. Our article Subcontractors vs. General Contractors explains how that relationship affects accountability and scheduling — details your contract should address directly.
State Contractor Licensing Board
Use your state's official licensing board website to verify a contractor's license status and check for any disciplinary history.
Certificate of Insurance (COI)
Request this document from the contractor's insurer to confirm active general liability and workers' compensation coverage before work begins.
Written Change Order Template
A simple form to document and sign off on any modifications to the original contract scope, cost, or timeline during the project.
Local Building Department
Contact your local municipality to confirm which permits are required for your project and whether your contractor has pulled them.
Mechanic's Lien Release Form
A legal document signed by subcontractors or suppliers confirming they have been paid, protecting you from lien claims against your property.
The Contract Checklist
Use the groups below to audit any home improvement contract before you put pen to paper. Items marked must are non-negotiable; should items represent strongly recommended protections; nice to have items add clarity and can often be negotiated in.
Parties and Project Identity
Scope of Work
Timeline and Scheduling
Payment Terms
Permits, Inspections, and Legal Compliance
Change Orders and Disputes
Warranty and Cleanup
Large Upfront Deposits Are a Red Flag
Reputable contractors typically request a modest deposit — often 10–30% of the total contract price — to cover initial materials and scheduling. Requests for 50% or more upfront, or demands for cash-only payment, are commonly associated with unreliable contractors. Your payment schedule should always align with project milestones, not the contractor's cash flow preferences.
Permits Are Your Responsibility to Verify
Even if the contract assigns permit responsibility to the contractor, you — as the property owner — are ultimately liable if work proceeds without required permits. Unpermitted work can affect home insurance, resale value, and your ability to pass inspections. Call your local building department directly to confirm that required permits have been issued before major work begins.
For budget-focused projects, having a clear contract also helps you prioritize intelligently. See Home Improvement on a Budget for guidance on sequencing projects when funds are limited.
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