Both minor and major renovation projects are more likely to be successful when you
- plan the work in advance
- use professional assistance in planning the project if necessary
- prepare a realistic cost estimate
- chart out the financial aspects and your right to tax credit for domestic costs and other subsidies
- find out what permits are needed, acquire them from the building supervision authorities and notify the housing company
- request proposals from several renovation service providers or contractors
- find a reliable professional
- prepare a written agreement for the renovation work
Find out whether you are entitled to financial assistance before you begin renovation work. For example, you may be eligible for
- subsidies granted for renovating housing for the elderly and handicapped.
- tax credit for domestic costs. If you want to receive tax credit for domestic costs, the company doing the renovation work must be registered in the prepayment register maintained by tax authorities. Information on whether a company is registered in the prepayment register is available on the shared company information system maintained by the National Board of Patents and Registration and the tax administration.
Putting in new tiling in a toilet or polishing parquet flooring are small renovation projects. In renovation work valued at a few hundred euros, a verbal offer from the renovation company may be enough. However, even in smaller jobs the eventual contract should be prepared in writing.
Structural repairs to a single-family house, renovating heating systems or having a yard paved are expensive jobs, which means that written proposals and contracts are very important.
Request for proposals from several businesses. This helps you get an idea of price levels and the reliability of each business.
Requests for proposals should always be made in writing. With a large project, failure to provide a written proposal alone should be enough to raise questions concerning the reliability of the business in question. Responses should also be requested in writing.
A request for proposal should include at least
- a description of the work required
- a request for a price estimate and the pricing basis
- a preliminary timetable
- a deadline for submitting proposals
- confirmation that the prospective service provider is in the prepayment register to ensure eligibility for tax credit for domestic costs.
Before concluding the agreement, try to meet the decorator in person. A good decorator is often easiest to find based on recommendations from friends and acquaintances. If a decorator provides references, follow up on them by contacting the previous customers. If you choose a decorator who ”apparently did some work for my neighbour's second cousin a while back”, fail to agree on the final price and date of completion in writing and agree to pay ”under the table”, you stand on shaky ground in case of any disputes
In an employment relationship the customer who commissions renovation work is the employer
The clearest way to proceed is to choose a decorator who is registered as an entrepreneur. The provisions in the Consumer Protection Act only govern agreements between consumers and entrepreneurs.
If a household hires a decorator in an employment relationship, it becomes an employer.
A household that hires a decorator in an employment relationship is liable to pay the same employer payments as other employers. Defective or delayed work by a decorator in an employment relationship is not subject to the Consumer Protection Act. Similarly, consumer authorities can't offer assistance in resolving any disputes in such arrangements.
Pricing and payment
The most commonly used pricing bases in renovation projects are hourly pricing and piecework rates. Agree on the price or cost estimate in writing.
- When using hourly pricing, request an estimate of the time required for the project and include it in the agreement. Hourly prices must be indicated inclusive of surcharges and taxes.
- Piecework rates are fixed contract prices which the contractor is not allowed to exceed, but the contractor also has no obligation to do the work at a price below that which was agreed.
- A cost estimate is an estimate that may be exceeded by no more than 15%, and only when doing so is justifiable.
- A maximum price is a fixed upper limit for the project price. The contractor may not charge more, even if the work turns out to be more costly than estimated. The price may, however, be lowered according to the amount of work performed or materials used.
Additional work must be agreed on with the customer
Additional work and associated prices should be agreed on in writing. This is in the interest of both the consumer and the business.
Particularly in renovation work done on old buildings there is the possibility of unexpected complications during work that even a professional contractor could not foresee.
The contractor must agree with the customer on undertaking unexpected additional work. The contractor may not undertake additional work and charge for it without the customer's permission. If the consumer wants additional work or changes to the work originally agreed upon, he must be prepared to pay for them.
Don't pay in advance
As a general rule, no advance payments should be made for renovation projects. The safest option is to agree that invoices are paid only when the agreed work has been completed and approved.
Advance payments involve risks to the consumer. The worst case scenario is that the contractor disappears with the money.
If you agree to pay for renovation work in instalments, the schedule of payments should be designed so that the bulk of the payments come towards the end of the project. This way the payments follow the progress of work. This approach also helps protect the customer's right to withhold payment for defective work until the defect in question has been appropriately rectified.
If the contractor is compliant with the REYS-8 contract terms approved by the Consumer Ombudsman, agreeing on an advance payment may sometimes be considered. In such cases the terms are clearly specified in the contract.
Agree on the completion date and prevent delays
The completion date must be agreed on in writing beforehand. The customer may claim compensation for delayed completion of work. The contract should include a provision concerning compensation for delays. If you don't agree on a completion date in writing, presenting proof of the delay in case of a dispute is difficult.
If you undertake work related to the renovation project yourself, such as dismantling fixtures, include the timetable of that work in the written agreement. In case of delayed completion of work, this helps avoid disputes over which party was at fault.
The compensation for delay should be set high enough to make it a genuine deterrent to delays. The consequences of delays may be agreed on e.g. as follows: xx % of the total price/each week or partial week OR xx euros/each week or partial week.