Buying, Renting & Insurance
Contracts, change orders and paperwork on a water-damage job
In plain English
The S500 expects a restoration company to run jobs on written paper: a signed work authorization from the owner (or their authorized agent) before any work, which can be part of a written contract signed before the project starts. What makes a contract adequate depends on where you are, so it tells restorers to have a lawyer draft theirs.
A good contract names the client and everyone else with a stake in the job, and describes the work: who repairs collateral or consequential damage, known limitations and complexities, permits and licenses, each party's duties, start date and timeline, the price or how it's calculated, the price of changes, who pays and on what terms, default and termination, whether an insurer is involved and how that will work, any warranty and disclaimers, the completion criteria (such as drying goals), and how changes are handled. Each page should be initialed, the owner should sign and date it, and everyone should get a copy promptly. Clear, complete wording — with disclaimers where the job is uncertain — heads off disputes.
The restorer should also find out whether the leak has been identified and fixed, and if not, who will do it. Unless the parties agree otherwise, fixing the source of the water is the owner's responsibility, not the restorer's.
Many disputes start with changes agreed verbally. Any real change to the contract or scope should go into a written, detailed change order — what changes, the time, the price and how it's paid — accepted in writing by the client and the restorer.
The parties should agree up front on how they'll communicate: about what, how often, by what means and with whom. Anything significant is discussed and then put in writing. Restorers may share information that helps people decide whether to leave the house during the work — hazards or containment can make staying impractical — but health questions should go to a doctor or public-health authority, and restorers should make clear that what they say isn't medical advice and stay within their expertise.
Documentation runs through the whole job. Depending on how the job is billed (fixed bid, time and materials, unit cost, or cost-plus), that means timesheets and lists of equipment, materials and supplies. Monitoring logs record the project, dates and times, who did the work, the instruments used, temperature and humidity readings in affected and unaffected areas and at dehumidifiers and HVAC, material moisture readings and where they were taken, and the drying goals.
Required records include anything the law requires (including safety and health records), the contract or emergency authorization, details of the water intrusion, drying records and completion criteria, the scope and work plan, work logs, estimates and invoices, records of limitations and complications, equipment and materials used, and a certificate of completion. Where relevant, they also include notices, releases and waivers; environmental reports; expert recommendations; inventories of contents removed or disposed of; permits; lien notices and releases; change orders; antimicrobial consent; and pressure readings for any containment. Recommended extras include communications between all parties, subcontractor paperwork, specifications and bids, payment responsibility, building evaluations, maps and logs, observations such as odors, condensation and health complaints, photos, and an inventory with photos of contents.
If the client asks for, or refuses, work in a way that keeps the job from meeting the standard, the restorer takes on more risk. The restorer should document the situation, warn the client in writing about the consequences, and try to get a signed waiver — which may still not protect the restorer. Before departing from the standard, the restorer should document why, notify the interested parties, and record the communication if no one objects in time.
Records are kept at least as long as the law requires, and the S500 recommends at least the longest statute of limitations that applies. Under the "discovery rule" used in many places, that clock starts when a problem is discovered, not when the work was done, so keeping some files indefinitely can make sense; a lawyer should advise. On emergency jobs the paperwork can lag, but it should be completed, and any communication gaps fixed, once the emergency is over.
On the business side, the S500 suggests a formal risk-management program and a review of insurance — general liability and contractor's pollution liability, workers' compensation where the law requires it for employees, and commercial auto coverage, which many places require for business vehicles — with help from a qualified insurance professional.
Key points
- Signed work authorization and written contract before work starts.
- Fixing the leak is the owner's job unless agreed otherwise.
- Every real change goes in a written change order, signed by both sides.
- Restorers aren't doctors: health questions go to medical professionals.
- Daily monitoring logs, photos and inventories; keep records past the statute of limitations.
- Departing from the standard: document it, warn in writing, seek a waiver.
Official text
This topic is covered in our own words because the standard behind it is copyrighted; we cite it below rather than reproduce it.
Citations
- IICRC S500, ANSI/IICRC S500 Standard for Professional Water Damage Restoration — Secs. 9.1–9.1.4, administrative procedures, work authorizations, contracts, change orders, communication, pp. 39–40. Best practice
- IICRC S500, ANSI/IICRC S500 Standard for Professional Water Damage Restoration — Secs. 9.2–9.3, project documentation and recordkeeping, required and recommended documentation, limitations and deviations, record retention, emergencies, risk management, pp. 41–43. Best practice