Why You Aren’t Ready to Remodel Your Home
Home remodeling is a trend on the rise. Perhaps because millennials can only afford fixer-uppers or perhaps because home renovation shows are more popular than ever, more homeowners are choosing to remodel their properties instead of moving to a house that suits their needs and taste — and you are probably one of them.
However, before you call your contractor — even before you start picking up paint swatches or selecting your tile backsplashes — you need to start preparing for your remodel with the right kind of paperwork. Though it isn’t as exciting as designing your dream home, these documents will keep your remodel safe from beginning to end, so it is vital that you start here.
Unfortunately, your homeowner’s insurance probably isn’t good enough to keep you protected during your remodel. Small projects don’t open coverage gaps, but whenever a remodel is significant enough to keep the home unoccupied during construction or when renovations cost 10 percent or more of the home’s replacement value, homeowner’s insurance simply doesn’t apply. This is because homeowner’s insurance is designed to insure an owner-occupied home. While your policy might not explicitly state that coverage will lapse during your major renovations, but contracts do include language meant to exclude losses that arise during major remodels.
That’s why it’s a good idea to both notify your current homeowner’s insurance provider and seek additional insurance to protect you during this period. There are two types of insurance you can pursue: renovation coverage and builder’s risk insurance. You should weigh the pros and cons of these different types before you begin your remodel.
If you have a home warranty, you should also call your warranty provider to provide information on the remodel and determine whether the warranty will help pay for any systems or appliance upgrades or whether you need to alter your coverage.
If you don’t know what a home warranty is, you might want to acquire one before renovations begin. Home warranty plans protect various systems and appliances in your home from general wear and tear. Coverage in standard home warranty plans includes your HVAC, large kitchen appliances, clothes washer and dryer, the electrical and the plumbing. If your systems or appliances are constantly breaking down due to age, a warranty will help you pay to repair or replace them — just in time for your renovation.
If you are using a contractor to complete your major remodel — and you should, considering the bevy of building and zoning laws regulating residential properties — you need to be certain that your contractor is properly licensed. Contractors go through rigorous training to understand how to build and remodel properties safely, economically and legally, and at the end of their training they apply for licenses that prove they have what it takes to treat your property right. Many states have online databases of contractor licenses, which you can search if you aren’t certain your contractor is properly qualified.
Many homeowners trust that their contractors will seek the necessary permits for the requested work on the home, but in truth if your remodeling project lacks the proper permits, you are the one in trouble, not your contractor. You should discuss with your contractor beforehand what kinds of permits you will need as well as those you might need in certain circumstances. Then, you should determine who, specifically, will apply and pay for the permits. If you do this yourself, you may get a discount from your contractor — but you might also make mistakes, so you should be certain you understand the permit documents before committing to this responsibility.
Finally, you can’t let any renovation work begin until you have a work contract. Your contract will protect both you and your contractor, ensuring you get the quality of work you desire and they get the payment you agreed upon. The contract should include clear information about your remodel, including scope of the project, any major deadlines, payment schedules, payment amounts and more. You shouldn’t leave anything ambiguous, or you could end up with a remodel that needs another remodel to look right.
You might have paint and fabric swatches; you might know exactly what tile will complement your countertops, but if you don’t have your paperwork in order, your remodel just won’t go right. With the right documents, any renovation project is possible, so start filling out the right forms today.