Drop-Dead Dates

In addition to using Renovation Trust, we recommend using drop-dead dates, tentative dates and penalties in your agreements. If you're getting ready to start a renovation project, it's time to take out your Renovation Toolbox and get to know the 3 most important tools to you in order to get your project done properly, on time and without risk.

Renovation Trust

Always use Renovation Trust to hold the project money and pay it out to the contractor once work is completed and approved.

Drop-Dead Dates

A drop-dead date is a given provision in an agreement or contract that sets out a finite deadline that, if not met, automatically triggers adverse consequences like the cancellation of the agreement or contract, monies being refunded or the project ending. Both parties may agree to extend the drop-dead date if it is mutually beneficial for both the homeowner and the contractor. Always use a drop-dead date as the last date the contractor can start work.

Penalties (using drop-dead dates)

Agreeing to a date is one thing, but without penalties for not reaching that date, they're meaningless. Be reasonable with your penalties. Consider penalizing a certain amount each day the project is not finished.

The relationship between a homeowner and a contractor is one of, if not the most complex and dynamic relationships in the business world. This is why so many people get ripped off or, at the very least, feel as if they got ripped off.

In our normal day-to-day life we expect things to happen either at a specific time or on a certain day.

If you are planning a Wedding for Saturday April 18th and you hire a catering company to serve dinner at 6pm, you do not expect to hear they were too busy to be there and will come on Tuesday the 22nd. Your wedding will be ruined.

When you order on Amazon and they tell you they will deliver on Tuesday, they normally do. Occasionally they may tell you that there is a 3-month delay because it is sold out. What is nice is they let you cancel and get your money back with a click of a button.

This communication is different in the renovation and construction world, especially if your contractor has already obtained a deposit from you. It is extremely hard to fix a date to start or finish a renovation or construction project due to extenuating circumstances that may arise. However, in cases where a contractor is taking advantage of a homeowner in terms of when to start or finish a project, here are some things you can do to protect yourself:

Never Give A Deposit Directly To A Contractor

Do Your Project Through Renovation Trust

Your money is protected. Renovation Trust provides you with the proper tools to complete renovations in a safe, secure and stress-free manner.

Set Expected Dates

Decide with your contractor when the project is expected to start and what the drop-dead start date would be. After this date, Renovation Trust will refund your money if your project has not been started.

Sample Contact Wording

The project is scheduled to start on Saturday April 18, 2022. If the project is not started by Monday May 2, 2022, at the sole discretion of the client, the project can be cancelled by the client and the client's funds on the project in Renovation Trust will be refunded to the client.

Decide with your contractor when the project is expected to start and what the drop-dead date would be. After this date, Renovation Trust will refund your money if your project has not been started.

A homeowner hired a contractor to build a second story on their home for approximately $350,000. The job was supposed to be a 3-month project. The contractor asked for a $70,000 deposit. Once the homeowner gave the deposit, the job was supposed to start immediately. However, the contractor did not start their project until 7 months later. When the contractor did return to start the project, the homeowners had to pay another $70,000 for demolition, despite the actual value of the demolition being approximately $10,000. Now, with a project unfinished and out over $140,000, the homeowners are at a major loss.

Using Renovation Trust and using drop-dead dates in any written agreement would have avoided this situation.

A drop-dead start date is easy to determine. Drop-dead dates on milestones or completions are more difficult.

For the completion of a project, you should ask your contractor when they will be 100% complete - so they own that date. They should have left time for weather and other circumstances that may prolong the project's completion. A drop-dead completion date should be set beyond the date provided by the contractor. This leaves plenty of time for a contractor to complete the build. If a contractor fails to complete the job by the drop-dead date, they may be penalized. Penalties will be set by you and should be written in the agreement with the contractor.

Sample Wording

The Contractor has provided a 100% finished project date of Nov 2, 2023. If the project is not 100% complete by midnight December 10, 2023, for each day beyond the December 10th date, the Contractor will be fined $500 per day until the project is 100% complete, which will be deducted from the final payment. If there are any change orders that effect this date, added time should be noted on the change order that will be added to extend the drop-dead date.

You've got the tools, protect yourself. If you have any questions, contact us.