Contracts: What Every Homeowner Should Know Before Signing

A guide for remodels and multi-trade home projects

Before You Begin: Who This Guide Is For

This guide is specifically written for homeowners planning larger home projects, such remodels, additions, ADUs, kitchens, baths, structural changes, and anything involving multiple contractors or multiple trades.

These projects carry more complexity, more decisions, and more cost. Because of that, the contracts used for remodels need to be more detailed, more structured, and more protective than the one-page agreements you might receive from a single-trade provider (like HVAC, roofing, or plumbing).

While single-trade projects often use simpler agreements, multi-trade projects require contracts that clearly define scope, schedule, cost, responsibilities, and risk. This is where Strata’s services help homeowners bring structure, clarity, and protection to the process — and this guide is designed to help you understand what to look for before you sign.

Why a Good Contract Matters

With larger projects, there are more things that can go wrong: schedule delays, unclear allowances, overlapping trades, invasive demo work, change orders, site access issues, materials lead times, subcontractor coordination, and more.

A comprehensive contract:

  • sets clear expectations for the work

  • protects you against scope creep and price surprises

  • creates accountability for timeline and quality

  • clarifies who is responsible for what — permits, materials, inspections

  • reduces stress, misunderstandings, and disputes

  • becomes your roadmap for managing the project

Your contract is not just paperwork — it is the foundation of your remodel.

What is OFCI and Why It Matters in Remodels?

OFCI (Owner-Furnished, Contractor-Installed) means the homeowner buys certain items directly — fixtures, appliances, finishes, hardware, lighting, etc. — and the contractor installs them.

OFCI can:

  • reduce contractor markups

  • give you more control over style, brand, and pricing

  • align better with your budget and taste

  • simplify allowance management

But OFCI only works well if the contract clearly lists every OFCI item, clarifies responsibilities, and sets delivery expectations. This guide includes OFCI considerations throughout because it’s an essential part of controlling remodel costs and managing risk.

The Essential Elements of a Remodel Contract

1. Scope of Work

This section defines exactly what is being done. A strong scope includes:

  • detailed descriptions for each room/trade

  • demolition details and restoration notes

  • allowances for items not yet selected

  • exclusions and limitations

  • site protection and cleanup

  • sequencing details if relevant

OFCI in the Scope:

  • Clearly list all OFCI items (fixtures, appliances, lighting, hardware, etc.) the homeowner will purchase directly.

  • Specify that the contractor will install these items, and reference any installation requirements or limitations.

A detailed scope prevents misunderstandings and limits change orders.

2. Schedule & Timeline

Remodels and major projects depend on sequencing. Your contract should include:

  • a defined start date

  • milestone targets

  • how “substantial completion” is defined

  • how schedule delays are handled

  • communication requirements for changes or issues

Lead times on materials (especially OFCI items) should be coordinated with your contractor’s schedule.

3. Cost, Payment Schedule & Allowances

Your contract should clearly outline:

  • total contract price

  • deposit amount (avoid >30% unless justified by special-order materials)

  • milestone-based or progress payments

  • detailed allowances for materials you haven’t selected

  • how additional costs will be handled

  • how material cost escalation is treated

OFCI to Manage Costs: If you want to reduce material markups or choose specific brands, consider using OFCI for items such as lighting, plumbing fixtures, appliances, cabinet hardware, or specialty finishes.

If OFCI is used:

  • your contract should reduce or remove allowances accordingly

  • OFCI items must be listed clearly to avoid double-charging

  • the responsibilities for procurement, shipping, returns, and timing should be spelled out

4. Change Orders

Changes are common in remodels: new discoveries, new ideas, or changes in material selection.

Your contract should define:

  • the written process for requesting a change

  • how costs are estimated and approved

  • required homeowner signature before proceeding

  • how schedule changes are documented

OFCI and Change Orders:

  • Any change in OFCI selections (brand, size, finish) after contract signing should be a documented change order.

  • Delayed OFCI delivery that impacts schedule should also be documented as a change order.

5. Materials, Products & Quality Standards

Your contract should specify:

  • material lists with models/brands

  • quality or finish standards

  • substitution rules

  • expectations for mockups or samples

  • cleanup and protection responsibilities

If using OFCI, your contract should state:

  • which item(s) the homeowner is purchasing

  • who is responsible for receiving, inspecting, and storing them

  • when materials must be onsite to avoid delays

  • who is responsible if OFCI items arrive damaged, incorrect, or late

  • that the contractor installs OFCI items but is not liable for manufacturer defects

This is where many remodel misunderstandings happen — clear documentation prevents that.

6. Permits, Inspections & Responsibilities

Your contract should clarify:

  • who pulls permits (typically the contractor)

  • who schedules inspections

  • who corrects any failed inspections

  • responsibility for structural, electrical, plumbing, or mechanical work

  • whether HOA or historical approvals are required

If you are providing OFCI items, confirm that they meet code and approval requirements.

7. Insurance, Bonding & Warranties

Your contract should include:

  • proof of contractor’s liability insurance

  • workers’ compensation coverage

  • warranty length for workmanship

  • manufacturer warranties for installed materials

  • warranty clarity for OFCI items (contractor installs, but homeowner handles defective products)

8. Lien Waivers & Payment Protection

Oregon allows subcontractors and suppliers to file liens if they are not paid — even if you paid the general contractor.

Your contract should require:

  • lien waivers with each payment

  • final lien release before final payment

  • subcontractor-level waivers for larger remodels

OFCI materials are purchased directly by the homeowner and therefore are not subject to the contractor’s lien — another benefit.

9. Termination, Disputes & Legal Protections

Your contract should outline:

  • reasons either party can terminate

  • notice required before termination

  • whether disputes go to mediation, arbitration, or court

  • which jurisdiction applies (usually Oregon)

Clear exit language keeps projects from escalating unnecessarily.

10. Red Flags in Remodel Contracts

Be cautious if you see:

  • vague scope (“all work necessary”)

  • no allowances listed for homeowner selections

  • refusal to install OFCI without explanation

  • OFCI items listed but with no delivery schedule or responsibility defined

  • large upfront deposits not tied to materials

  • no timeline or schedule commitments

  • no warranty language

  • no permit responsibility assigned

  • contractor unlicensed or uninsured

  • no lien waiver requirements

If you see multiple red flags, consider a contract review before signing or working with a different contractor.

11. How to Use Your Contract During the Remodel

Before Construction

  • verify scope, allowances, OFCI lists, and exclusions

  • insert payment and milestone dates into your calendar

  • confirm lead times for all OFCI materials

  • create a project folder for documents

During Construction

  • verify milestones before releasing payments

  • require written, signed change orders

  • confirm OFCI items are onsite, correct, and undamaged

  • track work against schedule

  • collect lien waivers

At Close-Out

  • complete the punch list

  • obtain warranties and final lien release

  • confirm all OFCI items are installed correctly

  • make final payment only when all work is complete

12. Oregon & Portland-Area Considerations

For projects in Lake Oswego, Portland, West Linn, Tigard, Tualatin, and surrounding areas:

  • verify contractor’s CCB license

  • expect permit requirements for most projects

  • OFCI items must meet code (especially electrical/plumbing fixtures)

  • HOA or historical district approvals may apply

  • labor and material prices fluctuate so contracts should define escalation rules

  • subcontractors must be covered by insurance and lien waivers

13. How Strata Helps With Contracts

Strata acts as your homeowner advocate throughout the process:

  • providing a standard contract that incorporates the information in this guide

  • reviewing contract drafts

  • aligning contract scope with bids and OFCI plans

  • managing change orders and communication

  • monitoring milestone payments

  • verifying OFCI deliveries and installation timing

  • ensuring final lien release and close-out

When you work with Strata, you gain clarity, confidence, and protection throughout your project.

Conclusion

If you're preparing for a remodel or major home project and want clarity before signing a contract, Strata is here to help.

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