A remodeling contract covers detailed scope with plans and finish schedules, allowances for owner-selected items (the #1 budget-overrun source), change-order procedure (written, priced, signed before work), payment schedule tied to milestones (deposit capped by state law in many states), concealed-conditions terms for what demolition reveals, lien waivers with payments, daily work hours and site rules for occupied homes, and warranty terms (1 year workmanship typical). Kitchen remodels average $25k–$80k; bathrooms $10k–$35k.
Remodeling Contract Template
Reviewed by the Agiled editorial teamUpdated June 2026
Remodeling has a structural tension no other contract type quite shares: the client lives inside the job site, the budget is anchored to allowances for things...
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Full template text
REMODELING CONTRACT AGREEMENT
Date: _______________
Project Address: _______________
PARTIES
This Remodeling Contract Agreement ("Agreement") is entered into by and between:
Owner: _____________ ("Owner"), with a mailing address of _____________
Contractor: _____________ ("Contractor"), with a mailing address of _____________, License No. _____________, and insured under Policy No. _____________
The Owner and Contractor are collectively referred to as the "Parties."
CLAUSE 1 — SCOPE OF WORK
The Contractor agrees to furnish all labor, materials, equipment, and supervision necessary to complete the following remodeling work at the Project Address ("Work"):
[Describe the full scope of work here, referencing attached Exhibit A — Plans and Specifications.]
The Work shall be performed in a workmanlike manner and in compliance with all applicable building codes, ordinances, and regulations.
CLAUSE 2 — CONTRACT PRICE
The Owner agrees to pay the Contractor the total sum of $_____________ ("Contract Price") for the satisfactory completion of the Work described in Clause 1. The Contract Price includes all labor, materials, permits, and fees unless otherwise stated.
CLAUSE 3 — PAYMENT SCHEDULE
Payments shall be made according to the following milestone schedule:
- 10% ($___) upon execution of this Agreement
- 20% ($___) upon completion of demolition and framing
- 20% ($___) upon completion of rough-in (plumbing, electrical, HVAC)
- 20% ($___) upon completion of drywall and interior finishes
- 20% ($___) upon substantial completion
- 10% ($___) retained until final punch-list items are resolved and Owner acceptance is provided in writing
Payments are due within seven (7) calendar days of the Contractor's written invoice for each milestone. Late payments shall accrue interest at the rate of 1.5% per month.
CLAUSE 4 — PROJECT TIMELINE
The Contractor shall commence Work on or about _____________ ("Start Date") and shall achieve Substantial Completion on or before _____________ ("Completion Date"). Substantial Completion means the Work is sufficiently complete so the Owner can use the remodeled space for its intended purpose.
Delays caused by weather, material shortages, owner-requested changes, or other events beyond the Contractor's reasonable control shall extend the Completion Date by a commensurate period.
CLAUSE 5 — CHANGE ORDERS
Any modification to the scope of Work, materials, or schedule must be documented in a written Change Order signed by both Parties before the changed work begins. Each Change Order shall describe the change, state the cost adjustment (increase or decrease), and note any schedule impact. The Contractor shall not perform changed work without a signed Change Order.
CLAUSE 6 — PERMITS AND INSPECTIONS
The Contractor shall be responsible for obtaining all required building permits and scheduling all inspections related to the Work. Permit fees shall be included in the Contract Price unless otherwise agreed. The Contractor shall provide copies of all approved permits and inspection reports to the Owner upon request.
CLAUSE 7 — MATERIALS AND SPECIFICATIONS
All materials shall conform to the specifications listed in Exhibit A. Where a specified product is unavailable, the Contractor shall propose a substitute of equal or greater quality for the Owner's written approval before installation. The Contractor warrants that all materials will be new and free from defects.
CLAUSE 8 — INSURANCE AND INDEMNIFICATION
The Contractor shall maintain, at its own expense, general liability insurance with coverage of not less than $1,000,000 per occurrence and workers' compensation insurance as required by applicable law. The Contractor shall provide certificates of insurance to the Owner prior to commencing Work.
The Contractor shall indemnify and hold harmless the Owner from and against any claims, damages, losses, or expenses arising out of the Contractor's performance of the Work, except to the extent caused by the Owner's negligence.
CLAUSE 9 — WARRANTY
The Contractor warrants all workmanship for a period of one (1) year from the date of Substantial Completion. This warranty covers defects in labor and installation but does not cover damage caused by the Owner's misuse, normal wear and tear, or acts of nature. Manufacturer warranties on materials and equipment shall be assigned to the Owner upon completion.
CLAUSE 10 — CLEANUP AND WASTE REMOVAL
The Contractor shall maintain the Project Address in a reasonably clean condition during the Work and shall remove all debris, tools, and surplus materials upon completion. The site shall be left in broom-clean condition unless otherwise specified.
CLAUSE 11 — OWNER'S RESPONSIBILITIES
The Owner shall provide the Contractor with reasonable access to the Project Address, including utilities (water, electricity) necessary to perform the Work. The Owner shall make timely decisions on material selections and change-order requests to avoid schedule delays.
CLAUSE 12 — DISPUTE RESOLUTION
Any dispute arising under this Agreement shall first be submitted to non-binding mediation administered by a mutually agreed mediator. If mediation fails to resolve the dispute within thirty (30) days, either Party may pursue binding arbitration or litigation in the courts of the state where the Project Address is located. The prevailing party shall be entitled to recover reasonable attorney's fees and costs.
CLAUSE 13 — TERMINATION
Either Party may terminate this Agreement for cause upon fourteen (14) days' written notice if the other Party materially breaches any provision and fails to cure within the notice period. The Owner may terminate for convenience upon written notice, in which case the Owner shall compensate the Contractor for all Work completed to date plus reasonable demobilization costs. Upon termination, the Contractor shall promptly remove equipment and leave the site in a safe condition.
CLAUSE 14 — LIEN WAIVERS
The Contractor shall provide unconditional lien waivers from itself and all subcontractors for each progress payment received. A final unconditional lien waiver shall be provided upon receipt of the final payment.
CLAUSE 15 — GOVERNING LAW
This Agreement shall be governed by and construed in accordance with the laws of the State of _____________.
CLAUSE 16 — ENTIRE AGREEMENT
This Agreement, including all attached exhibits and any executed Change Orders, constitutes the entire agreement between the Parties and supersedes all prior negotiations, representations, and agreements. No modification shall be effective unless made in writing and signed by both Parties.
SIGNATURES
Owner: ___________________________ Date: _______________
Printed Name: ___________________________
Contractor: ___________________________ Date: _______________
Printed Name and Title: ___________________________
Exhibit A — Plans, Specifications, and Material Selections (attach separately)
- Kitchen remodel
- $25,000 – $80,000+
- Bathroom remodel
- $10,000 – $35,000
- Change orders
- Written and signed, always
- Workmanship warranty
- 1 year typical
What your remodeling contract should cover
Scope with plans and finish schedule
Drawings or a detailed written scope, plus the finish schedule: every owner-selected item (cabinets, counters, tile, fixtures, appliances) with its allowance amount or actual selection. The finish schedule is where remodel budgets are won or lost.
Allowances, honestly sized
Allowance items priced at realistic mid-market numbers, not bid-winning lowballs — a $3,000 countertop allowance against $7,000 taste is a guaranteed overrun. Overages and underages reconciled at actual cost plus the stated markup.
Change-order discipline
Every scope change written, priced (cost and schedule impact), and signed before execution — including owner-requested 'while you're in there' items. Hallway agreements aren't change orders; the clause should say no payment for unwritten extras.
Concealed conditions
Demolition reveals: knob-and-tube wiring, galvanized plumbing, rot, asbestos, non-code framing. Pre-existing concealed conditions are owner-cost change orders, documented with photos before cover-up. Asbestos and lead trigger licensed abatement — a stop-work-and-test protocol, not improvisation.
Payment schedule
Deposit (state caps apply — California: 10% or $1,000), progress payments tied to named milestones (demo complete, rough-in inspected, drywall, cabinets set, substantial completion), and a final payment (10%+) held to punch-list completion.
Lien waivers and subcontractors
Conditional lien waivers exchanged with each progress payment, the major subs identified, and the preliminary-notice mechanics acknowledged — a homeowner who pays the GC but not via waiver discipline can pay twice when an unpaid sub liens the house.
Schedule and sequencing
Start and substantial-completion targets, the long-lead reality (cabinets 6–12 weeks, custom windows longer) sequenced before demo where possible, and day-for-day extensions for owner-delay (late selections are the most common remodel delay).
Living-through-it rules
Work hours, dust containment (zip walls, negative air for big demo), bathroom/kitchen availability commitments, daily cleanup standard, pets and kids protocol, and which areas are off-limits to the crew. Occupied-home remodels live or die on these.
Permits and inspections
Contractor pulls permits for structural, electrical, plumbing, and mechanical work; inspections pass before cover-up; final inspection before final payment. Unpermitted remodels surface at sale and unwind their own value.
Warranty and punch list
One year workmanship minimum (longer for structural), manufacturer warranties passed through with registrations, a written punch list at substantial completion with a completion window (30 days), and the final payment releasing on punch-out.
Typical remodeling costs and terms (U.S., 2026)
| Item | Typical range | Notes |
|---|---|---|
| Kitchen (mid-range) | $25,000 – $80,000 | High-end well past $100k |
| Bathroom | $10,000 – $35,000 | Wet-wall moves add cost |
| Basement finish | $30 – $75 / sq ft | Egress and HVAC drive range |
| Deposit | 10% or state cap | CA: 10% / $1,000 max |
| Final holdback | 10 – 15% | Released on punch-out |
| GC markup on changes | 15 – 25% | Stated in contract |
| Workmanship warranty | 1 year+ | Structural longer |
Costs vary sharply by market and finish level. Home-improvement contracts are regulated in many states — required clauses, deposit caps, and rescission rights differ; check your state's contractor board.
How remodeling contracts work in practice
The kitchen remodel
The flagship remodel and the allowance minefield: cabinets (40% of budget), counters, appliances, tile, fixtures — all owner-selected. The contract pattern that works: selections finalized before demo (the finish schedule signed as an exhibit), long-lead items ordered at deposit, and the schedule built backward from cabinet delivery. The classic failure is reversed engineering: demo first, selections 'as we go,' and a kitchen-less family eating takeout for three extra months while the backsplash gets debated. Selections before sledgehammers — the clause worth underlining.
The wall that wasn't empty
Open the wall for the new island wiring; find knob-and-tube feeding half the upstairs. The concealed-conditions clause routes this calmly: stop, document, price the remediation as a change order (owner cost — the house's history isn't the contractor's bid risk), and let the owner decide scope with real numbers. The discipline that protects everyone: photos before cover-up, inspections passed before drywall, and no 'we'll sort it out at the end' accounting. Older homes deserve a stated contingency — 10–20% of budget — and the contract should recommend it in writing.
The change-order avalanche
Remodels breed 'while you're in there': the hall bathroom, the closet built-ins, the recessed lights. Each is fine; uncontrolled, they're how a $60k project closes at $95k with everyone angry. The machinery: every addition gets a written change order with price and schedule impact, the GC's markup on changes is stated up front (15–25%), and the running change-order log is reviewed at each progress payment so the owner always knows the current contract value. The contractor who works from signed paper gets paid for everything; the one who works from hallway nods donates the difference.
Mistakes that weaken a remodeling contract
Lowball allowances
The bid that won on a $2,500 counter allowance gets reconciled at the $6,000 slab the owner actually picks. Compare bids on allowance realism, not totals — and price selections early.
Demo before selections
Cabinets run 6–12 weeks. Demolishing first means the project's middle is a wait, in a house with no kitchen. Finalize the finish schedule, order long-lead items, then swing hammers.
Verbal change orders
The hallway 'sure, we can do that' becomes a $9,000 dispute at final invoice. Written, priced, signed, logged — no exceptions, including for the smallest items.
Paying ahead of the work
Progress payments tied to calendar dates instead of milestones fund schedules, not work. Tie every payment to a named, inspectable milestone and hold 10%+ to punch-out.
Ignoring lien mechanics
Paying the GC isn't the same as the subs being paid. Conditional lien waivers with each payment are cheap insurance against paying for the same tile twice.
How to use this template
- 01
Download the remodeling contract template in Word or PDF.
- 02
Attach plans and the finish schedule with realistic allowances per item.
- 03
Set the milestone payment schedule with a capped deposit and 10%+ final holdback.
- 04
Add change-order, concealed-conditions, and contingency terms.
- 05
Set occupied-home rules: hours, dust containment, cleanup, and access.
- 06
Add permits, lien-waiver mechanics, and the punch-list process, then sign.
Skip this template if…
- New construction or additions with foundations — a construction contract with structural milestones and builder's-risk terms fits better.
- Single-trade jobs — a roof, a repipe, or a panel upgrade runs cleaner on that trade's own contract.
FAQs
What should a remodeling contract include?
Plans and a finish schedule with allowance amounts, a milestone-based payment schedule with capped deposit, written change-order procedure, concealed-conditions terms, permits and inspections, lien-waiver mechanics, occupied-home site rules, a punch-list process with final holdback, and a workmanship warranty of at least one year.
How much does a remodel cost?
Mid-range kitchens run $25,000–$80,000 (cabinets alone are ~40%), bathrooms $10,000–$35,000, and basement finishes $30–$75 per square foot. The honest budget includes a 10–20% contingency for what demolition reveals — older homes especially. Allowance realism matters more than the bid total: a lowballed allowance is an overrun on a delay.
What is an allowance in a remodeling contract?
A placeholder budget for an owner-selected item — counters, tile, fixtures — reconciled to actual cost once selected. Allowances are the #1 source of remodel budget overruns because bids compete by lowballing them. Compare bids on allowance realism, finalize selections before demolition, and confirm the markup applied to overages.
How should remodel payments be structured?
A deposit capped by state law where applicable (California: 10% or $1,000), progress payments tied to inspectable milestones — demo, rough-in passed, drywall, cabinets set — and a final 10–15% held until the punch list is complete. Never pay ahead of work in place, and exchange lien waivers with each payment.
What happens when demolition uncovers problems?
Pre-existing concealed conditions — outdated wiring, galvanized plumbing, rot, asbestos — are owner-cost change orders, documented with photos before cover-up. Asbestos and lead paint trigger licensed testing and abatement protocols. This is what the 10–20% contingency exists for; a contract without a concealed-conditions clause turns every surprise into a standoff.
Can I live in my house during a remodel?
Usually, with the contract doing real work: defined work hours, dust containment (zip walls, negative air machines for major demo), a guaranteed working bathroom and kitchen arrangement, daily cleanup standards, and crew-access boundaries. For kitchen remodels, plan 6–12 weeks of temporary cooking; for whole-home projects, price comparison should include the cost of moving out — sometimes it's cheaper than living through it.
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