Home Economics: Contract is smart precaution for home improvements

May is typically designated Home Improvement Month, though houses require improving - maintenance and repairs and upgrades - the 11 other months, as well.

Spending on home remodeling peaked nationally at $362 billion in 2007 and has declined since then in the face of high unemployment, tighter credit, and record foreclosures.

Yet homeowners are still spending big bucks: Harvard University's Joint Center for Housing Studies has projected the figure for 2011's second quarter alone at $130 billion.

With all that money involved, homeowners' chief concern is getting everything they've paid for, when they want it.

That goal is more easily achieved, the experts say, if everything is set down on paper, in the form of a contract, with all the i's dotted and t's crossed.

"It's amazing the number of major remodeling agreements that are based only on a one-page bid sheet or a handshake," said Bruce Hahn, president of the American Homeowners Foundation in Arlington, Va.

"No one- or two-page document can cover all elements of a good agreement, or hope to prevent even most of the potential problems," he said.

To reduce the likelihood of disputes, a homeowner needs "to have a meeting of the minds" with the contractor on every possible aspect of the contract and their relationship, Hahn said.

The Remodelers Council of the National Association of Home Builders cautions that no work should start until the customer reviews and signs an agreement spelling out in detail "the what, where, how, time span, and cost of the project."

In other words, if the contractor says, "Don't worry about it, we don't need a contract," the homeowner should insist on one - or start looking for another remodeler.

The Remodelers Council, the American Homeowners Foundation, and the National Association of the Remodeling Industry appear to be on the same page regarding the contents of a standard contract.

Hahn's group offers an eight-page contract designed with the assistance of homeowners, remodelers, architects, and lawyers. It is available, for a small charge, at www.americanhomeowners.org

Any agreement should start with the contractor's name, address, telephone number, and license number.

Pennsylvania law requires that all contractors who perform at least $5,000 worth of home improvements a year register with the Attorney General's Office. To check whether your contractor is registered, call 1-888-520-6680.