Know the Simple Terms of Home Improvement

Here is a list of some common terms and definitions that may help you avoid miscommunication.

Allowance: A specific dollar amount allocated by a contractor for specified items in a contract for which brand, model number, color, size or other detail is not yet known.

Bid: A proposal to work for a certain amount of money, based on plans and specifications for the project.

Building Permit: A document issued by a governing authority, such as a building department, granting permission to undertake a construction project.

Call-back: An informal term for a return visit made by a contractor to repair or replace items the home owner has found to be unsatisfactory or that require service under the warranty.

Certified: A certified program offered through associations. To attain the designation, a remodeler must take a specified number of continuing education courses and must comply with a strict code of ethics.

Change Order: Written authorization to the contractor to make a change or addition to the work described in the original contract. The change order should reflect any changes in cost.

Cost-plus Contract: A contract between a contractor and homeowner based on the accrued cost of labor and materials plus a percentage for profit and overhead. Also known as a time-and-materials contract.

Draw: A designated payment that is "drawn" from the total project budget to pay for services completed to date. A draw schedule typically is established in the contract.

Lien Release: A document that voids the legal right of a contractor, subcontractor, or supplier to place a lien against your property. A lien release assures you that the remodelor has paid subcontractors and suppliers in full for labor and materials.

Mechanic's Lien: A lien obtained by an unpaid subcontractor or supplier through the courts. When enforced, real property -- such as your home -- can be sold to pay the subcontractor or supplier. A lien release helps to protect you from mechanic's liens.

Plans and Specifications: Drawings for the project, and a detailed list or description of the known products, materials, quantities and finishes to be used in the project.

Punch List: A list of items of work to be completed or corrected by the contractor, typically near or at the end of a project.

Subcontractor: A person or company hired directly by the contractor to perform specialized work at the job site. Sometimes referred to as a trade contractor.

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