Renovation Contract Terms and Conditions

Before you sign your renovation contract, do take note of the terms and conditions (T&C).  The T&C usually includes:

  • Payment terms
  • Late payment penalty
  • The services or accessories that are included or excluded
  • Completion date or renovation duration
  • Termination clause
  • Warranty

The T&C are usually negotiable.  Before you sign any contract, do make sure that you clarify any unfavourable terms or conditions you do not understand.  I am not asking all homeowners to change all contract terms to your favour.  However, the T&C have to be reasonable and acceptable to both the renovation company and the homeowner.  For example:

1) Early termination penalty (before renovation commence): 50% of project sum

  • This term clearly display unfavourable penalty to homeowner.  Penalty of 20% of project sum or forfeit of downpayment (usually 20% and below) is more reasonable.  This is to compensate the time and effort of the Interior Designer for the pre-renovation preparation.

2) Payment terms

  • This is one part that you pay particular attention to.  This is to protect yourself in case the interior designer do not deliver as promised.
  • Example of a bad payment term: 50% upon confirmation of contract, 50% upon commencement of work.  This example is a bit to the extreme but it clearly show the disadvantages to the homeowners.  Nothing is done to your house and the full payment is to be paid up.
  • Signs of payment terms that I personally deem unfair:
  1. You are holding less than 5% of the payment before the renovation works end.
  2. You are paying more than 60% of the contract sum before the renovation works even started.
  3. You are paying more than 90% before carpentry end.
  • Example of fair payment term:
  1. 20% upon confirmation of contract
  2. 30% upon start of hacking or tiling works
  3. 20% upon measurement of carpentry
  4. 20% upon start of carpentry works
  5. 10% upon renovation completion

  • Although the payment is split into more payments, at least you know that the interior designer is doing his work.  This will protect you (with minimum damages) from being cheated like many people in this case
  • In most renovation conflicts, its difficult to get back the money, regardless who you complaint to.  And in the end, all those bad eggs get scot free.

3) The services or accessories that are included or excluded need to be clearly explained to you.

  • Ask about all the possible or unforeseen expenses.  There is no harm asking or knowing more.  At least you will not get a shock in the mids of renovation.
  • For example: if P.E. endorsement fee is needed, do ask how much is it.  State the fee amount clearly in the contract as an option.
  • Another example: if you are still not sure about a particular carpentry work, like a feature TV wall, do discuss about the price and add it as an optional add on rather than decide later.  Once the contract is signed, add ons are usually more expensive.  There is no harm having many optional add ons which you can decide later.  At least you know that the price is set.

Examples of Renovation Contract Terms and Conditions

T&C example 1

T&C example 2

T&C example 3

What you need to do

  • Discuss and negotiate with you Interior Designer about the T&C.
  • A sincere Interior Designer will compromise on the T&C (because they understand your concern).
  • Always remember: Money once out will never return.
  • Think carefully before signing on the doted line.
  • Try to come out with a win win solution for both parties

Blog about Interior Design, renovation and home improvement.


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