Which statement best describes the requirements of a new construction addendum?

The concept of a new construction addendum is crucial in real estate transactions, particularly when dealing with properties that are being built or significantly renovated. The requirement for a licensed contractor for construction is underscored by the importance of ensuring that the work completed on the property meets local building codes and regulations.

Using a licensed contractor provides several benefits, including accountability, compliance with safety standards, and the assurance that the work is performed by someone who possesses the necessary skills and expertise. Licensed contractors are also typically required to carry liability insurance and have the proper permits, which protects both the homeowner and the contractor.

In contrast, the idea that a contract is not needed for improvements overlooks the necessity for formal agreements in construction, as they help clarify the scope of work and protect all parties involved. The requirement of an inspection being needed before signing reflects the need for thorough evaluations but is not universally mandated for all situations. Lastly, the notion that only verbal agreements are acceptable is contrary to best practices in real estate, which strongly favor written contracts for clarity and legal protection.

Thus, the requirement for a licensed contractor stands out as the fundamental principle ensuring that new construction adheres to legal and safety standards while providing assurance to all parties involved in the transaction.