return to: finding
a builder
Contract Negotiations
/ Home Builder Selection
- Construction
Specifications:
- Labor Specifications:
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labor and sub-contract
specifications should be part of every
contract before you sign |
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labor and service
specifications are generally referred
to as general conditions or terms of conditions |
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specifications
should list clean-up clauses, date of
commencement, acquisition requirements,
trash removal, transportation of workers,
dump fees, etc. |
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you should specify whether
alcoholic beverages may be consumed on
your property |
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get everything
down in writing; never accept a verbal
agreement |
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- Finding a contractor:
- Selecting a
contractor:
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meet with the
contractor face-to-face be prepared
to show drawings, specifications, and
clippings from illustrations and products |
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be detail in
your specs this increases the likelihood
the contractor will want to bid for the
job |
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make sure
the contractor is fully licensed with
local and state governments, if required
check with your local jurisdiction to
ensure the license is valid and up-to-date
do not base the contractor's
license with a business card or verbal
commitment
lookup state, county and city governments
for information on the contractor's
license:
http://www.statelocalgov.net |
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make sure the contractor
is fully insured and carries worker's
compensation, liability insurance and
property damage insurance
ask to review the documentation |
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check with your local Better
Business Bureaus, building associations,
and other consumer protection agencies
ensure that there is no outstanding complaints,
fines, or penalties issued against the
builder if so, make sure the contractor
provides a valid explanation |
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check the builder's
place of business, phone number, and other
industry associations make sure
they are valid establishments |
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request
for a list of references from previous
clients contact these references
to inquiry on the builders work habits,
completion schedule, clean up, and any
other related issues or problems that
the previous client may have experienced |
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more information about selecting
your contractor: from
the national association of the remodeling
industry
lookup state, county and city governments
for information about contractor licensing:
http://www.statelocalgov.net
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- Contract Negotiations:
- Payment retainers:
- Change Orders
/ Extra Clauses:
- Other Parts
of the Contract:
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agree to dates
of acceptance (the date when the contract
is signed), date of commencement (the
date when the work is to begin), and date
of completion (the date when work is to
be completed) |
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discuss with
the contractor delay clauses
this allow you to assess a penalty if
controlled delays push completion date
beyond the agreed to date.
note: if you insert a penalty clause,
the contractor may request a bonus for
early completion. You need to run the
numbers to determine whether this is
beneficial to you. |
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make sure
the architect, contractor, owners and
any designers to the contract agree
to the dates before the draftsman completes
your plans
you want to avoid any delays in your
project schedule it can cost
you money |
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the contract
should include a list of subcontractors
plumbers, electrical, roofing,
etc. with all applicable business
information
request their names, address, business
licenses, etc. |
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the contract
should list the name, address and phone
number of all suppliers you will
most likely receive notices or lien releases
from these players. It would be nice to
have a file to track these players. |
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make sure the contract
states that you will be released from
all liens upon payment you will
want to have a copy of all releases
for your files |
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get performance statements
and unforeseeable work clauses
performance statements guarantee that
the work and supplies meet specification
and building code requirements
unforeseeable clauses fixes leaking
pipes, non-working electrical |
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state in the
contract that the contractor is responsible
for all required building permits |
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insert liability and warranty
clauses that protect you in the event
of damages, injuries, etc.
have your attorney review |
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you may request a purchase
allowance, which allows you to shop
for materials of your choice
the difference in the purchase price
as stated in the contract is refunded
to the contractor or owner, depending
on the price you pay |
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insert a cleanup clause
and work schedule of when the work should
be performed
make it a habit drop by to see that
the contractor adheres to the agreed
schedule |
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lookup state,
county and city governments for information
about contractor licensing: http://www.statelocalgov.net
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- Understand
Liens:
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a construction
lien allows any contractor, sub-contractor
or supplier that has not been paid to
place a lien on your property as security
for payment |
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a lien against
your property will inhibit you from selling
or obtaining financing, in some cases,
until that lien is paid |
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the most
common liens occur when the subcontractor
fails to pay his suppliers, even though
the full invoice has been paid by the
owner to the subcontractor
the suppliers can then place a lien
on your property for payment |
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the general
rule is to never make a payment without
receiving a release of lien from the
contractor, sub-contractor and supplier,
and whomever else is involved |
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in some states,
it is required that the sub-contractor
and/or supplier notified you that they
will be performing some work and/or
providing some supplies
if you state does not require it, request
it in the contract.
save these notices as a reference file
for tracking who may have a lien on
you until final payment |
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it is recommended
that the contract has a provision that
the contractor is responsible for obtaining
all liens
if not, then that responsibility falls
upon you |
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