What is an Escalation Clause?

Have you ever heard of the building term escalation clause? It’s a term that potential clients often ask about so we have included it in our building for success FAQs.

Question: What is an escalation clause?

Answer: This is where the customer agrees to pay for price increases on specified items that happen between contract signing and the start of construction. These tend to appear when there's high price volatility for a given building material (such as lumber). The decision to sign or not sign such a clause is a bet on the market, but without it the contractor may price the job higher to cover potential increases.

Have more questions about the building or remodeling process? Contact us for more information or discuss your custom home building or remodeling needs!