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  1. #1
    Join Date
    Feb 2008
    Location
    N. Central Indiana
    Posts
    3

    Question Construction contract help please.

    To make a long story short:

    My parents bought a 4 year old house and want to have an outbuilding built. We need a contract that was written for the homeowner, not the contractor, but one that a contractor should have no problems agreeing to as well.

    They just had a 175 sq. foot kitchen addition and a 275 sq. foot garage addition completed by the contractor that built the house, and they used his contract, signing it before 100% understanding what the contract covered. The last home construction that they farmed out was back in the 1950's and they were under the impression that the business world operated under the same set of rules today. The contract was signed the end of August, and the contractor said that the work would be completed by end of November. The work was just finished last weekend (over 2 months late).

    So, they don't want to repeat that scenario. What should be in the contract? The building will be a pole barn, but with dimensional shingles on the roof to match the house, and siding to match the house. Concrete, plumbing,and electric inside, windows and roll-up overhead door as well. The footprint will be 32' x 40'.

    Any and all advice will be greatly appreciated. I've searched the internet for the past few hours, and this site was searched as well for a contract that was written from the homeowners' perspective, but without any good results.

    Thanks in advance,
    Scott

  2. #2
    Join Date
    Aug 2007
    Posts
    7,243

    Default Re: Construction contract help please.

    Good luck with that. It's not likely that you'll get a contractor worth his salt to sign it. What you MAY have luck with is getting everything in writing, including completion date, and then place a wager on the line in the form of a performance bond. The way a performance bond works is that for any amount of time under the specified date, the contractor gets a per diem bonus, for any amount of time over the specified date, the contractor is penalized.

    First and foremost, however, is a complete and accurate accounting of the work to be completed. Any contract should include this accounting as part of the contract, or an attachment, and should include scope of work, materials used, and any other pertinent job related things. Progress payments should not be made unless the specified level of work has been completed, and never give final payment until you're satisfied with the work.

  3. #3
    Join Date
    Oct 2007
    Posts
    175

    Default Re: Construction contract help please.

    You'll want to use an AIA Owner-Contractor contract. Take a look at the one:
    http://www.malpasbirmingham.com/Clie...01%20Blank.pdf
    and this one:
    http://cogentpm.com/Bcn/BCN4709-5705/97AIA101-MU.pdf

    The AIA contracts are the industry standard - it is fair to all parties involved.

  4. #4
    Join Date
    Aug 2007
    Location
    The Great White North
    Posts
    4,045

    Default Re: Construction contract help please.

    Pretty much ditto what was already said... you should have the opportunity to make additions ,deletions, or changes to his contract so both parties are satisfied before signing.

  5. #5
    Join Date
    Feb 2008
    Location
    N. Central Indiana
    Posts
    3

    Default Re: Construction contract help please.

    Quote Originally Posted by A. Spruce View Post
    Good luck with that. It's not likely that you'll get a contractor worth his salt to sign it. What you MAY have luck with is getting everything in writing, including completion date, and then place a wager on the line in the form of a performance bond. The way a performance bond works is that for any amount of time under the specified date, the contractor gets a per diem bonus, for any amount of time over the specified date, the contractor is penalized.

    First and foremost, however, is a complete and accurate accounting of the work to be completed. Any contract should include this accounting as part of the contract, or an attachment, and should include scope of work, materials used, and any other pertinent job related things. Progress payments should not be made unless the specified level of work has been completed, and never give final payment until you're satisfied with the work.
    That is the quandry! I'm/we're not looking for a contract that is unreasonable from a contractors' standpoint, just one that is fair for both sides. For instance, the last one didn't have a start or completion date, it said that the contractor would vent the kitchen microwave/range hood to the exterior of the house when it was a ventless model. It also said that the homeowner was responsible for all exterior concrete work, and that all change orders would be in writing, and the homeowner would be presented with the cost of the change order andit would be paid for before the change order would be started. So, what does the contractor do? Dad said "as long as it's muddy outside, why don't you pour the sidewalks. It will help keep you from tracking mud into the house." So, the contractor never gave him a cost, nor asked for $$ up front, but he poured the concrete sidewalks. In my estimation, $1,228.00 is a bit steep for less than 2 cu. yd. worth of sidewalks. Dad paid it, but I want to avoid things like this in the future. I don't know why the contract excluded exterior concrete anyway!

    FWIW, extending the kitchen/dining room wall 4'(x 34' long) into the garage, extending the garage 8'(that's the way that the ridge runs), adding two 22" solar tube skylights, and 4 feet of kitchen cabinets with laminate countertop, tile floor in the kitchen (Lowes price of the tile is <$1.50/tile so it's not really expensive tile), with clay colored vinyl siding/dimensional shingles and 16' of gutters ran a bit over $52,000.00. Mom & Dad signed the contract without either my sister or I looking at it, and we didn't know they signed it until over a week later. So, while I think the price was a bit steep, there was no quibbling over the price after the contract was signed.

    The only way that we got the contractor to get the job completed after he asked for the 4th and 5th progress payment was to hold back the payment until the work that he said was completed actually was.

  6. #6
    Join Date
    Feb 2008
    Location
    N. Central Indiana
    Posts
    3

    Default Re: Construction contract help please.

    libcarp:

    Those seem pretty reasonable. Thanks! The only thing that I didn't see when I read them was a provision for copies of the lien wavers from the general and his subs for the homeowner upon final payment.

    Scott

  7. #7
    Join Date
    Jan 2008
    Posts
    61

    Default Re: Construction contract help please.

    The phrase "time is of the essence" and a date certain stated, with penalties against quantum merit, in the same paragraph/section bonuses for early completion that has been approved and signed off by your local authority and your independent inspector is the usual consideration, and accepted by homeowner.

    Signed, notorized original releases from both all workers and suppliers in a form which is fileable. Restricitive language regarding materials deliveries to the site, requiring authoriziation/signature by homeowner.

    The performance bond, not releaseable until the above.

    A paragraph near the end that says something to the effect that if any part of the contract is determined to be unenforcable or contrary to the law, that the remainder of the contract which is not a problem remains in full force.

    A litigation real estate attorney who specializes in contractor/owner construction issues is a worthy investment, as is an independent qualified engineer/inspector.

    Ideally you get the contractor to include the language your attorney crafts, but the contractor still drafts the contract. When you require the contractor to use your contract, it shifts the burden to you in litigation, better to get the contractor to redraft his contract, including the language you want but he's still the author.

  8. #8
    Join Date
    Nov 2007
    Posts
    980

    Default Re: Construction contract help please.

    Quote Originally Posted by unregistered View Post
    The phrase "time is of the essence" and a date certain stated, with penalties against quantum merit, in the same paragraph/section bonuses for early completion that has been approved and signed off by your local authority and your independent inspector is the usual consideration, and accepted by homeowner.

    Signed, notorized original releases from both all workers and suppliers in a form which is fileable. Restricitive language regarding materials deliveries to the site, requiring authoriziation/signature by homeowner.

    The performance bond, not releaseable until the above.

    A paragraph near the end that says something to the effect that if any part of the contract is determined to be unenforcable or contrary to the law, that the remainder of the contract which is not a problem remains in full force.

    A litigation real estate attorney who specializes in contractor/owner construction issues is a worthy investment, as is an independent qualified engineer/inspector.

    Ideally you get the contractor to include the language your attorney crafts, but the contractor still drafts the contract. When you require the contractor to use your contract, it shifts the burden to you in litigation, better to get the contractor to redraft his contract, including the language you want but he's still the author.
    QUANTUM MERUIT - As much as he has deserved. When a person employs another to do work for him, without any agreement as to his compensation, the law implies a promise from, the employer to the workman that he will pay him for his services, as much as be may deserve or merit. In such case the plaintiff may suggest in his declaration that the defendant promised to pay him as much as he reasonably deserved, and then aver that his trouble was worth sucli a sum of money, which the defendant has omitted to pay. This is called an assumpsit on a quantum meruit.

    When there is an express contract for a stipulated amount and mode of compensation for services, the plaintiff cannot abandon the contract and resort to an action for a quantum meruit on an implied assumpsit.

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