The renovation contract and payment schedule: what to write down before you start

Why a written contract matters

Both sides forget the details of a verbal agreement within weeks, and a written quote alone may not say what happens on delay, extras or disagreement. A contract brings all of that into one document both sides sign and come back to whenever they disagree during or after the work.

Even for small jobs, a written agreement helps, however simple: the work, materials, amount, duration and warranty. A written message is better than nothing, and a signed contract is better still.

The essential clauses

A good contract sets out at least:

The parties

The homeowner’s name; the company’s name, commercial registration and address; and who represents it on site.

The location

The address of the house or flat and the rooms or parts the work covers.

The scope

A detailed description of the work — ideally with the itemised quote and any drawings attached as part of the contract.

Materials

Type, grade and specification, who supplies them, and what happens if they’re unavailable.

Duration

Start date, total duration and the stage schedule.

Amount and payments

The total amount and the payment schedule tied to stages.

Extra work

How it’s requested and priced, and that it needs written approval.

Warranty

Duration and coverage, especially waterproofing and services.

Handover

How it happens, the snag list and the time to fix it.

The payment schedule: tie it to stages

The key rule: pay for completed work you can see, not for time passing. Instead of “a payment every two weeks”, tie payments to clear stages: strip-out and services complete, then waterproofing complete and tested, then tiling and gypsum complete, then paint and fittings, then handover.

A deposit is normal in renovation, because the company buys materials and sets up crews. But a very large deposit before any work leaves you exposed if the company runs into trouble. Keep a final payment back until handover and snag fixes — it’s what keeps the company attentive to the last details.

Pay through traceable means such as bank transfer, and ask for a receipt or invoice for every payment, so every amount leaves a clear record.

An example of stages

This is a general example of how to split the work, not binding percentages. The actual split is agreed between the parties for each project:

• On signing: a reasonable deposit to buy first materials and set up the site.
• After strip-out and services: once you’ve seen and photographed the new services before they’re closed up.
• After waterproofing and its test: once you’ve attended the test or seen photos of it.
• After tiling, gypsum and joinery: once you’ve checked they match the specification.
• After paint and fittings: with the home nearly ready.
• After handover and snag fixes: the final payment.

Extra work: the biggest source of disputes

In renovation, especially in older homes, opening up reveals what wasn’t visible: a corroded pipe, part of a slab that needs repair, damp in a wall. That’s normal. The problem comes when such work is done without agreement and you’re surprised by a bill at the end.

So the contract should state that any extra work needs your written approval before it’s done, with a description, price and effect on the timeline. It helps if the contract sets the pricing method in advance, such as unit rates for common items. Any change you request during the work should likewise be written and priced before it’s carried out.

Permits, safety and the site

If the work needs a permit — structural changes or a facade change — state in the contract who obtains it, who pays the fees, and that work doesn’t start before it’s issued. A violation usually falls on the homeowner, even if the company did the work.

Set out the company’s responsibility for worker and site safety, protecting furniture, floors and the parts not covered by the work, taking waste to an authorised place, and cleaning the site at the end of each stage and at handover. If you live in a building, state the permitted working hours and the use of the lift and shared entrances.

Delays

Set out the start date, total duration, stage schedule and what happens on delay. Distinguish between delays the company causes and delays outside its control — late materials you ordered, extras you approved, or changes you requested.

Be realistic about duration: a company that promises a very short time to win the contract may overrun later. Ask which work needs drying time — waterproofing, plaster and paint — because it can’t be rushed without affecting quality.

Warranty and maintenance

Get the warranty written into the contract with its duration and exactly what it covers: waterproofing and leaks? Services? Joinery and hinges? Paint? And what it excludes, such as misuse or changes made by others?

Set out how you report a problem and within how many days the company responds. Keep photos of hidden work before it’s closed up — they help with any maintenance or warranty claim later.

Handover and the snag list

Don’t take over the home in a hurry. Walk through it room by room with the company’s representative and try everything: doors and windows, switches and sockets, taps and drains, and AC units if their points were moved. Tap the tiles to hear hollow spots, and look at the paint in daylight.

Write every snag on a list both sides sign, with a date to fix them. Don’t make the final payment until the agreed snags are fixed.