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Scope of Work:
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Describes contractors basic responsibilities of
the job and documents "attached" to the contract (specifications,
forms, drawings etc.)
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Time of Completion:
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Describes a specific time of completion and contractors
responsibility there in.
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Contract Sum:
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Total dollar amount to construct the home to listed
specifications.
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Method of Payment:
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Should list any deposit or down payment to the
builder and which lending institution is to be used. The following
should also be included in the contract.
a. Payment request made by builder to owner and/or bank
b. Owners opportunity to inspect work prior to payment
c. Payment disbursement from bank time frame
d. Final completion payment information
e. Documentation supplied by builder, during construction, showing
all expenses have been paid, lien waivers.
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Allowances:
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How allowances are utilized.
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Varying Site Conditions:
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Describes possible conditions on a property which
may change the contract price which were unknown prior to "breaking
ground".
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Insurance:
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Both contractor and owner have insurance responsibilities
during construction. Your contract should list what each parties
responsibilities are and the dollar limit associated with each.
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Permits & Licenses:
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Builders responsibility to comply with all permit,
licensing, covenants, code requirements, state and federal laws
and inspections. Indemnify owner for liability of noncompliance.
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Alterations:
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How "Change Orders" are to be handled.
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Subcontractors:
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Builders responsibility for subs hired.
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Indemnity:
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This protects the buyer from "Acts of Omission"
by the builder or the subs he hires during the course of construction.
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Materials and Appliances:
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Builders responsibility to supply "new"
materials and of "good quality", all tools, equipment
etc.
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Correction of Defective Work After Final Acceptance:
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How long the home is guaranteed for and procedures.
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Completion by Owner of Contractor's Default:
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Protects buyer if the builders fails to build
the home as per the contract. Procedures for the owner to have
the home completed if the builder defaults on the contract terms.
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Cleaning Up:
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Builders responsibility to remove debris and garbage
during the course of construction (reduces risk of injury) caused
by builder and subs.
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Lien Releases:
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Owner MUST have a guarantee from the builder
that your property will be free of liens and indemnify owner if
any liens are filed during construction, by subs and/or suppliers.
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Workmanship:
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Good workmanship guaranteed by builder and correction
if necessary. Limited period of time. Usually same as warranty.
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Resolution of Dispute:
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This is also very important. If you have a problem
with your builder you must have recourse to rectify the problem.
This paragraph describes the procedures for both parties. We suggest
mediation as a first step to possibly avoid costly court fees.
If court is necessary, list who is responsible for the court costs.
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Notices:
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How notices are considered to be "given"
to/by both parties.
