Let’s face it, we live in a world where verbal agreements, a handshake and a smile is not going to be sufficient to cover your you know what, so here are 10 practical tips for creating an agreement that both you and your clients, vendors, and team members can agree to:
1. Get it in writing.
You can technically have an oral agreement and in many cases they are still legal, but memories fade, minds change and loyalties waiver. Save yourself a lot of hassle and heartache and have a signed agreement right at the beginning. Realtors are used to signing agreements as they do this with their clients all day long so it would professional protocol for you to require a signed agreement for your services. The last thing you want to do is try to come up with an agreement when problems arise. TIP: DO NOT make the mistake of bypassing this step because “you’re too busy”. You will kick yourself in the end…trust me!
2. Keep it simple.
You don’t need a bunch of legalese to make it legal. Use language you both can understand. Oh, and make sure you number the paragraphs so you can refer to specific clauses easily.
3. Make sure the agreement is signed by the right person.
Although technically a representative of a company can make and sign an agreement, it’s much easier to make sure you’ve got the right person and their company title on the agreement. If this is an agreement for staging services, have the person who is paying for your services sign the agreement. If it’s the Realtor, have him/her sign it. If it’s the homeowner, have him/her (or both) sign it. If they are splitting the costs, have both the Realtor and the homeowner sign the agreement and make sure the agreement outlines what the payment term is and who is responsible for what. If this is an Independent Contractor agreement, make sure that the authorized company’s representative sign the agreement.
4. Identify each party correctly.
I touched on this a little in (3) above, but this is important enough to stand alone. Include the person’s name and their role in the company. Plus, of course, list the company with the proper business entity. For example, “Purple Bananas, LLC (a Nevada Limited Liability Company)”.
5. Include the details.
This is especially important if you’re doing an independent contractor agreement. Make sure you spell out the responsibilities and authority of each party.
6. Specify payment.
Include how much and how often payment will be made. What if payment is late? Can credit cards be used for payment? What if work isn’t performed?
7. Outline procedure for termination.
I have a 7 day cancellation policy for each party when it comes to my Staging Agreement and a penalty for cancelling a project within 3 days of the scheduled stage date. These are important things to outline so that your clients understand that you have policies and strict guidelines that you follow so that you cover your expenses and protect your time.
8. Agree on a way to resolve disputes.
Write into your agreement what you and the other party will do if something goes wrong. You can decide that you will handle your dispute through arbitration or mediation instead of going to court. Ironically, arbitration is often more expensive to both parties than a court case.
9. Pick a state law to govern the contract.
If you and the other party are located in different states, choose the state for mediation, arbitration and legal actions. State law varies, so consider carefully.
10. Confidentiality agreements.
I can’t stress this one enough. You need a confidentiality and a non-disclosure agreement with anything related to your business and specify what happens if the confidentiality is breached. This is particularly important if you have team members who either leave to work with another company or to start their own businesses. You can specify a period of time that they are not allowed to open a competing business within a certain radius of your business (i.e. 50 miles).
Above all, though, get an agreement in writing. You don’t need to spend thousands for a good agreement, but every dime you do spend will come back to you a multiple times over in reduced stress. Every time something happened with a client in my business, I added a clause to my agreement so I wouldn’t have to deal with that ever again. Please note that I am not providing legal advice. These are just recommendations. I would highly recommend you seek your own attorney’s advice to choose what’s best for your business.
Want a headstart? You don’t have to start one from scratch and you don’t have to pay a lawyer tens of thousands of dollars to draft one for you. I have the most comprehensive Staging and Rental Agreement in the Industry!!! It covers everything that has ever come up in my business and will help you eliminate the ones that keep coming up in yours.
The Agreement outlines all of the following and more:
- Payment & Terms
- Damage or Loss to Furniture & Accessories
- Late Termination or Default
- Access to Property
- Vacancy of Property
- Premises Liability Advisory Regarding “Shoes Off” Requirements
- Photography and Publicity Release
- Advertising Allowance during Staging Period
- Pre-Stage Remodeling, Cleaning and Other Work
For more information, visit http://alicetchan.com/products/
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{ 2 comments… read them below or add one }
Great things to include,Alice. Also, here are some other items you want to make sure you include in the agreement.
State that…
1. you have no liability when it comes to third parties you recommend, e.g., the furniture rental company, painter, floor refinisher, etc. and that the homeowner enters into an agreement with them and is ultimately responsible for managing them.
2. …you may require them to pay you for any time spent changing things, returning purchases to stores, etc after the project is substantially completed. This protects you against unreasonable clients.
3. …there is sales tax (if applicable to your state) on the fee quoted - I learned this the hard way when a client refused to pay sales tax because it wasn’t in the agreement and I had to pay for it and therefore my fee was less.
4. …you are not responsible for repairing minor defects such as holes in the walls left from hanging pictures.
5. … the client agrees to provide a driveway clear of snow and other debris, a comfortable temperature in the house, running water - especially needed in vacants.
6. …you cannot guarantee the sale of the property, i.e., the time frame and the price.
7. …our advice and opinions re remodeling should not be relied upon solely and they should consult an architect, engineer.
8. …notices re the agreement to each other should be given in writing
9. …if you have your rental accessories at the property, the client must notify you immediately if they enter into an agreement to rent or sell the property so that you may remove the accessories.
Excellent points Donna. Many I cover in my agreement (except for the snow part since we don’t get snow in California). Sounds like “you’ve been there, done that” also…thanks for your input! I’m sure other stagers will find that very valuable!!!