What Should a Kitchen Remodel Contract Include?

A kitchen contract has to survive two things a bathroom or a fence contract usually does not. Materials you have not chosen yet, and a wall that gets opened while you are living in the house. Everything below exists because of one or the other.

This page assumes you already chose your contractor. If you have not, stop here and go do that properly, because no paperwork saves you from the wrong person and the questions that separate a real contractor from a good talker are asked before the contract exists, not after.

The clauses every home improvement contract needs

Start with the floor, then build. States that regulate this at all tend to require a written contract above a modest dollar threshold. California, the most prescriptive example, requires a written, signed home improvement contract once the aggregate price passes $500, and Business and Professions Code section 7159 spells out what has to be in it, down to the point size of the type.

Whatever your state does or does not mandate, a contract you should sign contains all of these:

• The parties, the property address, and the contractor’s license number as it appears on the state board’s record.
• A description of the work specific enough that a stranger could tell whether it was done. "Install kitchen cabinets" is not that. Brand, line, door style, box construction, and count is.
• The total price, and every material named by brand and model rather than by category.
• Start and completion dates, with what happens if either slips.
• A payment schedule tied to work completed, not to the calendar.
• Evidence of liability coverage and workers compensation, policy numbers included.
• A mechanics lien warning, and the process by which waivers get collected.
• Your right to cancel, and how to exercise it.
• How changes to the work get authorized and priced.

Now the parts that decide whether the last one ruins you.

Every allowance, in writing, with a number

An allowance is a dollar figure standing in for something you have not selected. Tile. Countertops. Lighting. Cabinet hardware. Appliances. It converts to a real price once you make your choice, and the difference lands on your invoice.

This is where kitchen contracts leak money, so the clause has to answer four questions:

1. 1What is the allowance amount for each item, named line by line?
2. 2Does the allowance cover the material only, or the material plus the labor to install it? Material-only is common, and it means an expensive tile costs you twice: once in material and again in the labor nobody quoted.
3. 3If your selection comes in under the allowance, do you get the difference back? Many contracts guarantee the charge for an overage while saying nothing about a credit for an underage.
4. 4Does the contractor’s markup apply to the overage? Answer this before you sign, because otherwise a $6,000 countertop upgrade is not $6,000.

A contractor who sets your countertop allowance at $3,000 while knowing you described quartz has not lied to you. They have written a smaller number on a piece of paper and left you to discover the rest at the slab yard. That is also the reason two bids on the same kitchen come back thousands apart: a thin allowance makes a bid look cheap without changing a single thing about the kitchen you end up with. Ask for allowances that match what you actually intend to pick, even though it makes their number look worse next to the others. That is the whole point.

A cap on the change order markup

A change order is the written amendment that prices work outside the original scope. It is not a scam. It is the correct mechanism, and any kitchen will have a few.

What matters is the number attached to it, and most residential contracts never state one. So the percentage gets settled after the drywall is off and your alternatives have evaporated. Do not accept that. Get the figure written down while you still have a choice.

This is not an odd request. It is what every contract with a lawyer behind it already does. Caltrans publishes an actual markup table by cost category in section 9-1.04 of its 2018 Standard Specifications, and section 9-1.04A sets a lower markup, 10 percent, on work performed by a subcontractor. Hold onto that second one. It is a public agency putting in writing the thing your GC would rather not: when somebody else does the work, the markup on it drops.

The AIA general conditions do the same thing from the other direction. A201-2017 section 7.3.4 says change order cost includes "an amount for overhead and profit as set forth in the Agreement, or if no such amount is set forth in the Agreement, a reasonable amount." Read that twice. The form assumes the percentage was fixed up front, and treats arguing over what is reasonable as the fallback for people who failed to do it.

Be careful with anybody who tells you there is an industry standard percentage. There is not one. Caltrans allows 35 percent on labor and 15 percent on materials and equipment; TxDOT allows 25 percent on labor. Public agencies price this by category because a blended norm does not exist. So write your own ceiling: a stated maximum percentage for overhead and profit on change order work, a lower percentage where a subcontractor performs it, and your signature on every change order before that work starts.

A concealed conditions clause, written before the wall is open

Behind your kitchen wall there is either nothing interesting or there is rot, a surprise gas line, knob and tube wiring, a beam somebody notched fifty years ago, or a leak that has been quietly ruining the subfloor. Nobody knows which. That is not a failure of the estimate. It is the nature of an existing house.

The clause decides what happens next, and it needs to say three things. How the discovery gets documented, with photographs, before anything is covered up. How the additional work gets priced, whether at a fixed quote, at cost plus a stated percentage, or at an hourly rate with a stated cap. And that work stops until you have approved it in writing.

Without that clause, the discovery and the price arrive together, delivered by the only person standing in the room, on a day when you have no kitchen. An honest contract answers it with a contingency: money reserved for the unknown. Do not confuse it with an allowance. The allowance names a thing whose price is unsettled. The contingency names no thing at all, because nobody has found it yet.

One more line belongs here if you are pulling the cabinets out yourself to save a few thousand. The contract has to say exactly where your work ends and theirs begins, and who owns whatever you uncover doing it. Otherwise the first soft subfloor becomes an argument about who broke it.

What they can ask for up front

The deposit comes first, and the law here gets misquoted more than any other clause in the document. Eight states put a ceiling on the money a residential contractor can take from you before anyone lifts a tool, and no two ceilings match:

• California: $1,000 or 10 percent of the contract amount, whichever is less. Business and Professions Code section 7159.5.
• Nevada: the same two numbers, but the cap exists only where the owner is living in the house. NRS 624.970.
• Maryland: one third of the contract price. Business Regulation section 8-617(b).
• Pennsylvania: one third, on contracts above $5,000. 73 P.S. section 517.9(10).
• Maine: one third. 10 M.R.S. section 1487(5).
• Ohio: 10 percent, on contracts above $25,000. Ohio Revised Code 4722.04.
• Massachusetts: one third of the contract price, or the cost of special order materials if that number is bigger. MGL chapter 142A, section 2(a)(6).
• Vermont: half the labor or half the materials, and note that it is not half the contract price. 26 V.S.A. section 5509(c).

Read the Nevada line twice, because it is far narrower than the internet says. Nevada’s deposit statute covers a contract "between a residential contractor and the owner of a single-family residence who occupies the single-family residence," for contracts entered into on and after October 1, 2023. Rent the place out, or use it as a second home, and Nevada gives you no deposit cap at all. Plenty of pages will tell a Nevada landlord otherwise. They are wrong.

Two things Nevada gives an owner who does live there, and almost nobody prints either one. A contract that breaks the deposit rule "is voidable by the owner of the single-family residence," which is a remedy and not just a scolding. And the cap lifts for exactly one reason: the contractor "has filed with the Board a bond solely for the protection of consumers in the amount of $100,000." That is a consumer bond, not a performance bond, and the two are not interchangeable. If a Nevada contractor wants more money up front, ask which one they hold.

California is blunter. Section 7159.5 says that if a down payment is charged, it "shall not exceed one thousand dollars ($1,000) or 10 percent of the contract amount, whichever amount is less." The contractors board adds the sentence that ends most arguments about cabinets: there are no exceptions for special-order materials. A $40,000 cabinet package does not buy anyone a bigger deposit.

The California cap lifts only for a contractor who has a performance and payment bond, a lien and completion bond, a bond equivalent, or a joint control approved by the registrar. Joint control is the one everybody leaves out: a third party holds the money and releases it against work actually done, which is a perfectly good answer if your contractor needs cash early. Breaking the down payment rule is a misdemeanor, punishable by a fine of not less than $100 and not more than $5,000, or by a county jail term not exceeding one year, or by both. If the job sits somewhere damaged by a natural disaster under a proclaimed state of emergency, the court "shall impose the maximum fine."

Payments that follow work, and a holdback at the end

After the deposit, tie every payment to something you can walk into the room and verify. California puts a floor under this too: except for the down payment, a contractor "shall neither request nor accept payment that exceeds the value of the work performed or material delivered" (section 7159.5). A schedule reading "$8,000 every second Friday" describes a calendar, not a kitchen.

Sensible milestones follow the build sequence: demolition complete, rough-in passed inspection, drywall complete, cabinets set, countertops templated and installed, final completion. Money moves when the milestone is met and not before.

Then hold something back. A punch list is the pile of small unfinished items that surfaces at the end, and the honest truth of contracting is that they get finished while money is still owed. Withholding five to ten percent until the punch list is signed off is negotiated practice. Practice, not law, and the distinction matters, because the retainage caps that do exist carve homeowners out by name.

Nevada caps retainage on private work at 5 percent (NRS 624.609), and then NRS 624.622(4) says the article does not apply to an agreement between a prime contractor and a natural person who owns a single-family residence. California’s private works statute (Civil Code sections 8810 through 8822) caps no amount at all. Its 5 percent figure is a public works rule from Public Contract Code section 7201, and it never applied to your kitchen. What California’s private rule does give you is a deadline: retention is due within 45 days after completion (section 8812). So the question your state may answer is when the held money comes loose, not how much of it you were allowed to hold.

Lien waivers, and who can really lien a paid-in-full house

Your contractor hires a cabinet supplier and a tile setter. You pay the contractor in full. The contractor does not pay them. What happens to you next depends entirely on your state, and the line you have read a hundred times, that they can lien your home even though you paid every dollar, is only true in some of them.

Where it is true: California says a mechanics lien "is not limited in amount by the contract price" (Civil Code section 8430(b)). Nevada works the same way. Paying twice is a real outcome in those states, and the industry sentence you keep reading was written by people who live in them.

Where it is not: New York caps a lien at "the value or agreed price of the labor and materials remaining unpaid" (Lien Law section 4(1)), so a New York homeowner who has paid in full cannot be liened. Washington says liens on a remodel of an owner-occupied home "may only be satisfied from amounts not yet paid to the prime contractor" (RCW 60.04.031(3)). Maryland says a subcontractor’s lien on the owner’s own single-family dwelling "shall not exceed the amount by which the owner is indebted" (Real Property section 9-104(f)(3)). Texas protects money the owner already paid the original contractor before being authorized to withhold, apart from the 10 percent the owner must reserve (Property Code sections 53.084(a) and 53.101).

That is a lot of law to carry around for one kitchen, so do not carry it. Make the contract oblige the contractor to hand you a signed waiver from every subcontractor and supplier as that party gets paid, plus the list of who they all are on day one. A waiver settles the question in every state at once. Paying by joint check, made out to the contractor and the supplier together, closes the gap on the biggest orders, and on a kitchen the cabinet order is usually the single largest exposure you have.

The official-looking letters that arrive in week one are preliminary notices, and they are not threats. California is direct about why they exist: "compliance with this section is a necessary prerequisite to the validity of a lien claim" (Civil Code section 8200(c)). Texas says a claimant other than the original contractor "must give the notice ... for the lien to be valid" (Property Code section 53.056(a)). The burden lands on parties who never signed anything with you, and laborers are commonly exempt. We verified that in California, Texas, Washington and Maryland, not in all fifty. Keep every notice. Each one tells you who is really on your job.

If the money is already gone

Several states run a recovery fund a homeowner can claim against when a licensed contractor takes the money and disappears. Minnesota pays up to $100,000. Nevada up to $40,000 (NRS 624.510). Maryland, Virginia and Arizona up to $30,000. Massachusetts and Connecticut up to $25,000. Hawaii up to $12,500 per contract. Virginia, Massachusetts, Minnesota and Hawaii make you win a court judgment first. Nevada and Maryland do not.

California has no recovery fund. None. Californians assume there is one, because the state polices contractors harder than almost anywhere, and there simply is not. If your California contractor walks off with the deposit, what you have is their $25,000 license bond (Business and Professions Code section 7071.6(a)), and you claim against the surety company that wrote it, not against the board. On a kitchen, $25,000 does not go far, and you may be standing in line for it behind everybody else that contractor burned.

The right to cancel, and the clock on it

If a salesperson sat at your kitchen table and you signed there, federal law hands you an exit. The FTC Cooling-Off Rule (16 CFR part 429) kicks in at "$25 or more if the sale is made at the buyer’s residence." Sign at their office instead and the threshold jumps to $130. Three business days to back out, for any reason at all or for none. The duty is the seller’s, not yours. They have to tell you the right exists at the time of sale and hand you two completed copies of the Notice of Cancellation.

There is an exclusion buried in the rule, and it swallows a lot of kitchens. It does not cover a sale "made pursuant to prior negotiations in the course of a visit by the buyer to a retail business establishment having a fixed permanent location." Plain English: if you walked into the showroom first, talked through cabinets there, and then had them come to the house to sign, you may have no federal cancellation right at all. Read that before you rely on three days you might not have.

California stacks three of its own on top, and contractor-written articles print exactly none of them. First: a buyer who is 65 or older gets five business days, not three. Section 7159(e)(6) requires a cancellation notice for a senior citizen and changes every "three" and "third" in it to "five" and "fifth." Senior citizen means 65 or older (Civil Code section 1689.5(f)).

Second: a contract "written for the repair or restoration of residential premises damaged by any sudden or catastrophic event for which a state of emergency has been declared" gets seven business days (section 7159(e)(7)). That is aimed straight at the truck that rolls down your street the week after the fire, with a clipboard and a special price for today only.

Third, and this is the one worth the whole section. California starts your clock "by midnight of the third business day after you received a signed and dated copy of the contract that includes this notice." Not from the day you signed. From the day the notice landed in your hands. A contractor who never gives you the notice never starts your clock, and your right to cancel stays open. The federal rule runs from the transaction date instead, so this protection is California’s alone, and it is the reason the type size on that notice is written into the statute.

The 10 percent rule that does not exist

One myth to bury before you sign anything, because it is repeated on contractor sites constantly. California does not cap a contractor’s final bill at ten percent above the estimate. No such provision exists. The ten percent in section 7159.5 is the down payment cap and nothing else. If you are counting on an overage ceiling you read about online, you are counting on nothing.

Here is the right you were actually reaching for, and it is better than the myth. Under section 7159(d)(5), a change order "shall become part of the contract only if it is in writing and signed by the parties prior to the commencement of any work," and extra work is not enforceable against you unless the change order describes the scope, the added cost, and the effect on the schedule. That beats a percentage cap. It means unsigned surprise work is not automatically your bill.

One caveat has to ride along with that, because a contractor will raise it and you should not be surprised. The same statute says failing to comply "does not preclude the recovery of compensation ... based upon legal or equitable remedies designed to prevent unjust enrichment." A judge can still make you pay for work that genuinely benefited you. So the signed change order is not a magic eraser. It is the difference between a bill you agreed to and a fight you have to have.