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HOME BUILDING GUIDE

Your Planning Guide

Guide Contents

10 Ways to Collaborate

Decision Making Process

Design/Build Matrix

Building Green

Contract Documents

Drawings

Specifications

Permits

Budget Estimate

Cost Analysis

Purchasing

Trade Contractors

Suppliers

Scheduling

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Quality Control

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contract documents

A verbal contract isn't worth the paper it's written on. - Samuel Goldwyn

A construction contract basically consists of four documents in combination:

  1. DRAWINGS
  2. SPECIFICATIONS
  3. AGREEMENT
  4. CONDITIONS

DRAWINGS are a graphic representation of the work to be performed consisting of a site, foundation, floor, roof, elevation, and cross section plans. They show the location, character, dimensions, and details of the work.

SPECIFICATIONS are a written description of the work to be performed consisting of product identification, types of finishes, and standards for performance. They explain the work to be performed in terms that are not easily displayed in graphic form.

AGREEMENT identifies the parties to the agreement, the date, payment schedule for the work, the basic commitment of the Trade Contractor to construct the described project in accordance with the Drawings and Specifications, the schedule on which the work is to be performed, and the signatures of the parties. Usually, this form is quite brief, but it incorporates by reference the other parts of the contract.

CONDITIONS clarify in detail the rights and obligations of the Owner, Trade Contractors, and those activities which will be shared by mutual agreement. These clauses deal with various subjects such as Owner, Construction Manager, Architect, disputes, change orders, schedule, liability insurance, safety, inspections, corrections, arbitration, termination, jurisdiction.

All parties will want to be familiar with all the WRITTEN REQUIREMENTS of an enforceable contract. Here's a list of 16 conditions between an Owner and an Architect and/or Contractor that you'll want to put into writing. Consult with an attorney practicing construction contract law to review your contract documents before forming an agreement.

Business Documentation. The legal business name, address and business owner, or legal representative, should be stated. Indicate license numbers, professional certifications, proof of bond to cover work performed, proof of occupational insurance, personal and property liability insurance (contractor), and errors and omissions insurance (designer). Be sure statutory notice is provided according to your state's law!

Scope of Work. You should identify what will be accomplished. What do you intend to do? What type of work will be performed? The preferred method is to simply refer to Drawings and Specifications, and let those documents do the talking for you, rather than try to re-describe or summarize the scope of work. If drawings and specifications are not yet created, describe how these documents will be created and what fees will be associated with their creation.

Contract Price. How much will be charged? Does the price include sales tax or not? Who is responsible for getting the permits and scheduling inspections? Is the price fixed on drawings and specifications, or cost plus a percentage with an estimate, or based on an hourly fee? Can you break the work into phases of completion?

Schedule of Payments. How are you going to pay? Is there going to be a down payment or retainer fee paid? Are there going to be progress draws? Will you utilize a voucher system? Is the balance due on completion of work? How long after substantial completion of work is final payment due?

Terms of Payments. How do you determine substantial completion of work: when the permit is issued or signed off or some other more definitive date? Will a notarized waiver of lien be required? Will dual signature checks be utilized? How often will the lender's representative visit the site to verify progress? Never agree to an assignment of funds!

Interest. Will you be charged interest? If so, on what amount are you charged interest? When does interest begin to accrue? If the schedule exceeds the time allotted by lender, who pays any additional interest or penalties?

Site Meetings and Workplace. Where will meetings take place and how frequently? Who will have the authority to call meetings? Who will observe work to be accomplished and become the contact person for all questions and inquiries? Who will maintain workplace clean up and safety? Who will be responsible for maintaining portable toilet, first aid kits, signage, and temporary services on site?

Building Codes. Who is responsible for conformance of drawings and specifications to the building code? What happens during course of construction if building codes change or a field inspector changes the interpretation of a plans examiner?

Lender Requirements. Will both designer and contractor complete a construction cost breakdown form and description of materials using lender's forms? How will you proceed from a very general estimate of costs of work to be accomplished to a specific budget based on a thorough cost analysis? Who are the specialty contractors and suppliers for each phase of the design and build endeavor?

Change Orders. How will changes to scope of work be documented? Are change orders going to be in writing, or can they be authorized orally? How will changes be billed? Will charges or credits be based on time and material at cost or markup price? Will receipts be provided for materials or work outsourced to others? Is payment to be made in advance for changes or at the time of the next progress billing? Are hourly rates established for residential designer, contractor, or staff person?

Disputes and Remedies. If there is a misunderstanding, how will it be resolved? Are you going to spend endless years in mediation or arbitration, or are you going to resolve this through Mandatory Arbitration Rules, which is set up and paid for by the Superior Court system in your state? Will disputes be settled in accordance with the American Arbitration Association and their Construction Industry Arbitration Rules? How will legal fees be paid? Can you terminate the relationship without paying penalties or additional fees to a designer or contractor?

Warranty. What kind of warranty is being offered for products and services? Who is responsible for maintaining warranty? How long does the warranty remain in effect? Will the designer or contractor agree to maintain warranty of habitability according to provisions of your state's law? What limitations are placed on warranty? Does warranty cover workmanship, products and materials? Who is responsible for collecting and disseminating product specifications, warranties, and installation instructions?

Unforeseen Conditions. Who is responsible for identifying or removing hazardous waste? Who identifies and fixes structural defects, nonconforming plumbing, mechanical or electrical conditions, or concealed problems with the structure? Who takes financial responsibility for theft and vandalism? What special conditions arise during inclement weather that may affect work schedule or performance?

Scheduling. Whose responsibility is it to schedule the work? If the workplace is not ready at each phase of construction, then who takes responsibility? Who pays for unnecessary trips to the workplace? Are provisions given for labor and delay damages? Who determines who will be responsible for causes of delay? If work is interrupted, how will you correct the problem?

Correction or Completion of Work. Who has the right to create the final punch list? Who has the right to complete pickup work? Will any payment be withheld for any reason? Is it necessary to report deficiencies in writing or can these be described orally? How long is a reasonable opportunity to perform corrections? Who will determine substantial completion of a phase of work for designer or contractor's work?

Acceptance of Conditions. Is there a place for signatures by owner and designer and contractor indicating their Agreement? When is the start date of acceptance? How long are conditions in effect? Whose forms are to be utilized for formal agreement?

Becoming familiar with each of these issues begins with an informal meeting of all parties either together or separately to discuss the expectations of each participant. This meeting will open lines of communication on these issues and inform all participants of what is expected of them during the course of construction. No firm agreements should be made during information gathering meetings; this is a time for becoming acquainted with the various issues which contribute to the overall project success. It's always a process of progressive approximation so agree to meet again to discuss the "Conditions" of your "Agreement."

Owner's interest may best be served by meeting separately with the principal players: Construction Manager, Architect, and Trade Contractors and Suppliers. Arranging a meeting with everyone may prove impossible given busy schedules, the difficulty of locating a room which adequately provides for the number of people the Owner may want to attend, and the variety of issues related to each participant.

One scenario which has proven effective is for the Owner and Construction Manager to initially meet and develop an overall strategy geared specifically for the Owner's situation. As the Owner proceeds through the Design/Build process, there is continuity in the contract documents. Drawings and Specifications are developed and end-means relationships are made clear.

At each meeting with Trade Contractors and Suppliers, there should be a prepared agenda so the discussion is organized and comments made at the appropriate time. Begin on time and take notes. Define terms, establish procedures, and stick to the agenda. Solicit opinions from all parties requiring everyone at the meeting to present their opinions and positions at this time. At the meeting's conclusion summarize decisions made and identify concerns that are still open for discussion. As soon as possible, type these conditions on one side of standard 8 1/2" by 11" paper (if possible use a word processor for ease of correction) and use it for later discussions.

Remember: Each profession/business produces standard form contracts which favor their particular interests. For instance, most Trade Contractors have a boilerplate contract to divert Owners from bringing their own, and then customize any special conditions for a particular client. Similarly, Architects usually subscribe to the contracts generated by the American Institute of Architects. There may also be a suggestion to take what's been generated at your meeting and attach it to a standard contract labeled "Addendum," "Rider," "Contingency," "Option." Consider this arrangement carefully.

After the "rough draft" contract documents have been reviewed, there's still plenty of time for changes. Ask for comments, suggestions, deletions, or problems to be identified and meet again to make changes to your Conditions. Keep an open mind to alternatives and solutions. Discussing problems without proposing viable solutions wastes time and may cause dissention needlessly. If possible, complete the "Conditions" of your "Agreement" in its entirety and create a clean copy to be circulated among all parties for review. At any point in this process, all participants should take the document to a Lawyer familiar with construction contract law for review.

Contract documents will be unique to each Owner's requirements and lifestyle. This is why standardized forms should be avoided but this doesn't mean something cannot be gained from examining documents from the American Institute of Architects and the Associated General Contractors.

A useful approach is to take standard contracts from the AIA or AGC:

  cut them up into the various clauses

  group clauses together so you can compare and contrast similar issues

  adapt standard contracts to your situation by addition or deletion

  arrange the clauses to form "Agreement" and "Conditions" statements which fit your situation.

Be sure this activity is completed PRIOR TO any meetings with Architects, Trade Contractors, or Suppliers in order to become familiar with the many issues which need to be considered and what questions you'd like to ask.

contract documents

Keep in mind that whoever writes the contract often controls the terms of agreement so the point is for all parties to participate in contract formation so that all parties are fairly represented. A good beginning point is to consider HOW the contract is written. Standard forms are to be avoided. Convince all parties that documents will be written in plain, easily understood English. This means eliminating legally correct but professional language which belongs in the domain of lawyers.

Here are some examples of common legal phrases and their plain English substitutes:

* This agreement is made and entered into this day of ,
by and between "This agreement is made (date) between"

* Sometime before "Before"

* Exhibit A attached hereto "Exhibit A"

* On behalf of "For"

* Forbearance "Delay or Refrain"

* In the event that "If"

* Of even date herewith "Today"

* The law of the State of "(Your State) law"

* Heretofore "Before now"

* Hereunder "Below"

* Probity "Relationship"

* Aforementioned omit most of the time

* Herein omit most of the time

* Said "The"

* Such "The"

* Performance "Fulfill"

* Cease and desist "Stop"

* Clear and unambiguous "Clear"

* Covenant and agree "Agree"

* Made and entered into "Made"

* Full force and effect "Effect"

* Above and foregoing "Above"

* Consent and approval "Consent"

Written Contract Documents should be required for all construction jobs. Of course, the cost and scope of the project will determine the complexity of the contract so be prepared for creating documents which are proportionate to the size of your job.

Remember: Too much detail in a contract may lead to poor feelings between Owner and Trade Contractors but often this can't be avoided. You may be "comfortable" with a person's reputation but a handshake will NOT suffice! A contract whether verbal or written expresses the clarity of communication between the Trade Contractor and Owner; it's an opportunity to describe what is to be accomplished, how long it will take, determine the costs, and state under what conditions the work will occur.

The "Sample Agreement and Conditions Document" which follows is provided as an example of how terms may appear using plain, easily understood English, and how a variety of issues might be systematically organized. This document describes the relationship possible between an Owner and General Contractor.

Owners should carefully review their situation, and tailor Contract Documents to fit their project when working with the General Contractor. You'll definitely want to consult a Lawyer familiar with construction contract law.

DO NOT USE THIS DOCUMENT "AS IS"

SAMPLE AGREEMENT AND CONDITIONS DOCUMENT

The Construction Work of this contract is between _____Contractor's Name______, 
____License Number______, ______Contractor's Address________, AND 
_______Owner's Name_______, _____Owner's Address_________, for completion of 
_____Type of Work________.

1.	Description of Work and Contract Price

1.1	Contractor agrees to furnish all labor, materials, supplies, equipment, services, machinery,
tools, and other facilities required for the prompt and efficient completion of work described: 
to construct, according to the Drawings and Specifications, a house located at ____Project's 
Street Address___.

1.2    Drawings and Specifications were prepared by ____Designer/Architect/Plan Service____.  
Contractor will provide additional as-built sketches and depictions that describe work 
performed.

1.3	The Work will be done in strict accordance with applicable codes and ordinances and to the 
full satisfaction and acceptance of the Owner for the sum of ____Dollars and Cents______ to be
paid in accordance with the Payment Schedule provisions of the lender's construction loan 
documents (or state other terms).

2.	Owner's Responsibilities

2.1	The Owner will fully develop Drawings and Specifications with Construction Manager or
Architect prior to issuance of permit in a manner which allows Contractor ninety (90) days to
complete bidding process.  The Owner will provide full information regarding requirements for
Work including all covenants and restrictions which apply to site.  Code alterations or changes
made by inspecting agency during approval process will be considered Changes according to
Paragraph 5.
	 
2.2	The Owner will furnish the Contractor with a legal survey and description of the project
site, and obtain and pay for the necessary permits, approvals, easements, and variances
required for Work.

2.3	The Owner will furnish all necessary documents for water service, electrical service, 
natural gas or propane, sewer or septic, telephone, and television cable, and obtain and pay
for installation of utility services to project site when required by Permit Application and
Work Schedule.

2.3	The Owner will be fully acquainted with the Work and has budget authority to authorize
payment to Contractor in accordance with the Payment Schedule provisions of the lender's 
construction loan documents, to make Changes in the Work by mutual agreement in writing with
the Contractor, to render decisions promptly consistent with Work Schedule and furnish 
information expeditiously.

2.4	The Owner will communicate with Trade Contractors and Suppliers through the Contractor.

3. Contractor's Responsibilities

3.1	The Contractor will carefully study all Drawings and Specifications and will at once 
report to the Owner any error, inconsistency or omission the Contractor may discover.  The 
Contractor will do no Work without Drawings, Specifications, or Change Order with Owner's 
written approval.

3.2	The Contractor will supervise and direct the Work using the most professional skill
and attention, and be solely responsible for all construction methods, techniques, sequences,
and procedures for completing all Work. The Contractor will coordinate Trade Contractors and 
Suppliers to be in harmony with one another, and conform to Project Schedule.

3.3	The Contractor will provide and pay for all labor, materials, equipment, tools, 
equipment, machinery, transportation, facilities, and services necessary for the proper
execution and completion of the Work, except as provided in Paragraph 9.

3.4	All materials and products furnished for the Work will be new and free from faults, 
defects, and conform to the Drawings and Specifications, unless otherwise specified by Owner. 
In the event there are any discrepancies from the Drawings and Specifications, the Contractor 
will arrange for the correction of such discrepancies and will notify the Owner on completion 
of the work performed to eliminate any such discrepancies. All Work not so conforming to 
these standards will be considered defective. If required by the Owner, the Contractor will 
furnish satisfactory evidence to the kind and quality of materials and products. The 
Contractor will make no deviation from the Drawings and Specifications unless requested by 
the Owner to do so. The Contractor will cause any Work to conform strictly to the Drawings 
and Specifications unless the Contractor receives written authorization from the Owner 
describing in detail what Changes are to be made. Minor deviations may be made by the 
Contractor from the Drawings and Specifications as are normal in standard practices of the 
construction industry and the practical application of materials.

3.5	The Contractor will pay all sales, business, consumer, use, and other similar taxes 
required by law.

3.6	The Contractor will provide all notices to comply with all laws, ordinances, rules, 
regulations, and orders of any public authority bearing on the performance of the Work. 
The Contractor will also comply with any conditions, covenants,  and restrictions which 
may be applicable to the Project.

3.7	The Contractor will employ a competent Superintendent to supply necessary assistance, 
and be in attendance at the Project site during the progress of the Work to insure correct 
performance of the Work.  The Superintendent will be satisfactory to the Owner and not be 
changed except with Owner's consent, unless the Superintendent proves to be unsatisfactory 
to the Contractor and is in his employ. The Owner will at all time deal with the Contractor's
employees, Trade Contractors, and Suppliers through the Superintendent. The Superintendent 
will represent the Contractor and all communication given to the Superintendent will be 
binding as if given to the Contractor. All significant communications will be confirmed 
in writing. The Contractor will be responsible to and answer directly to the Owner for the
acts or omissions of the Contractor and of all of the Contractor's employees, Trade 
Contractors, and Suppliers, as well as the wages of all employees and all other persons 
directly or indirectly employed or retained by the Contractor in connection with the Work.

3.8 The Contractor will correct any defects in workmanship and/or materials performed or 
supplied by the Contractor for the Work or which fails to comply with the Drawings and 
Specifications, whether observed on or after completion and whether or not fabricated, 
installed, or completed within the time allotted to the Owner by the lender, i.e., six (6) 
months (or 8, 10, 12 depending on your situation) from date of start. The Contractor will 
bear all costs and financial responsibility for the failure to complete and have 
approved the construction within the six (6) month period (or 8, 10, 12 depending on your
situation).

3.9 The Contractor agrees to clean Project site and remove debris from the premises after 
each phase of construction. Each Trade Contractor and Supplier will be responsible for 
disposal of respective waste material at completion of their portion of the Work, and 
recycle or reuse material when feasible. The Project site must remain in a clean manner, 
acceptable to the Owner and consistent with the "Building Green" philosophy.

4. Payment Schedule

4.1	The Contract price will be paid to the Contractor in accordance with the required 
payment schedule and incorporated by this reference are the lender's disbursement 
requirements to which the Contractor and Owner agree to submit (or state other terms).

4.2	With regard to a final inspection and Certificate of Occupancy from the Building 
Department, the Contractor agrees to indemnify and hold harmless the Owner against any 
and all mechanics' or material men's liens attaching to the property. If any liens 
attaching to the property have been recorded, then the Owner may use any or the entire 
amount of the final payment to remove such liens. Nothing in this subparagraph will 
limit the Contractor's liability in Paragraph 13 of this Contract.

4.3	The Contractor agrees to complete Work in a lien-free condition for the Owner. Any 
payment made prior to total completion of the Work will not be construed as evidence of 
acceptance of any part of the Work nor a waiver of any claim by the Owner arising out 
of faulty workmanship or materials or for failure of the Contractor to comply strictly 
with the Drawings and Specifications.

4.4	The Owner may withhold 10% of contract price or any payment which may be necessary 
in the Owner's reasonable discretion to protect the Owner from loss because of:

4.4.1  Defective Work not remedied;

4.4.2  Third-party claims filed, or reasonable evidence indicating a probable filing of 
such claims;

4.4.3  Failure of the Contractor to make payments promptly to Trade Contractors, Suppliers, 
or for labor, materials, or equipment;

4.4.4  Reasonable doubt that the Work can be completed for the unpaid balance of the 
contracted sum;

4.4.5  Reasonable indication that the Work will not be completed within the contracted 
time;

4.4.6  Unsatisfactory execution of the Work by the Contractor.

4.5  Final payment by the Owner will not constitute a waiver or any claims by the Owner 
including claims for unsettled liens, faulty or defective work, failure of the Work to 
comply with the requirements of the Drawings and Specifications, any guarantee or warranty 
required by the Work.

5.	Change Orders

5.1	The Owner reserves the right to perform portions of the Work on the Project by prior 
agreement with the Contractor. The Owner will be credited an amount equal to the sum 
allowed in the payment schedule for the portion of Work performed by the Owner.

5.2	The Owner may order changes, modifications, additions, and/or deletions to the Work. 
Any such changes will not invalidate the Contract. The time for the Project completion 
and the Project cost will be adjusted by mutual agreement in writing by Contractor and 
Owner.

5.3	Changes to the Work will only be made by written order signed by the Owner and 
Contractor.

6.	Arbitration and Termination

6.1 Arbitration

6.1.1  Disputes between Owner and Contractor will be settled by mutual agreement. If a 
dispute cannot be settled within ten (10) days, the matter will proceed to binding 
arbitration according to procedures of the American Arbitration Association after 
notice and demand.

6.1.2	If the Owner fails to begin or complete portion of Work on the Project which 
by prior agreement would be Owner's responsibility, the Contractor may, after five (5) 
days written notice, begin or complete that portion of the Work. The Contractor will 
be credited an amount equal to the sum allowed in the payment schedule for the portion 
of Work to be performed by the Owner.

6.1.3	If the Project is stopped for a period of ten (10) days through no act or fault 
of the Contractor, then the Contractor may, after five (5) days written notice, receive 
payment from the Owner for all work performed, and proceed to binding arbitration after 
notice and demand.

6.1.4	If the Contractor fails to correct defective work or persistently fails to 
supply materials or labor or equipment sufficient to perform Work, the Owner may, 
after five (5) days written notice, order the Contractor to stop Work until the cause 
for such order has been eliminated.

6.2 Termination

6.2.1	If the Owner fails to make payment under the terms of this Contract, through 
no fault of the Contractor, the Contractor may, after ten (10) days written notice, 
terminate the Contract.  The Owner will pay for work completed and any proven loss with 
respect to materials, labor, or equipment, and reasonable profit applicable to the Work.

6.2.2	If the Contractor fails to carry out the Work in accordance to the Agreement and 
Conditions Statement, and Drawings and Specifications, the Owner may, after ten (10) days 
written notice, terminate the Contract, and finish the Work by whatever method the Owner 
determines. If the cost of completing the Work exceeds the balance due under the terms of 
the Contract, the difference is to be paid to the Owner by the Contractor.

6.2.3    Any Arbitration or Termination matters described in the Contract will be submitted
 to the American Arbitration Association according to its rules.

7.     Project Schedule

7.1	Work commences when Building Permit is issued, weather conditions are favorable to 
excavate, and Contractor's schedule allows.

7.2	The Contractor will continue the Work in a timely fashion, and maintain progress 
diligently to completion with sufficient labor and material on site at all times.

7.3	If at any time the Contractor is delayed in performing the Work by Owner requested 
changes or additions, the Project Schedule will be extended by the same amount of time as 
caused by the additional Work.

7.4	The Contractor will be excused from performance of Work due to riots, strikes, natural 
disasters, accidents, and any Act of God. In the event that any such event prevents the 
Contractor from performing Work, the Owner will not have the right to terminate the 
Contract.

7.5	The Date of Substantial Completion or Designated Portion of Project is the date when 
construction is sufficiently complete in accordance with the Drawings and Specifications 
so the Owner can occupy or utilize the Project for the use it is intended.

8.	Indemnification

8.1	The Contractor will indemnify and hold harmless the Owner and the Owner's agents and 
employees from all claims, damages,  losses and expenses, including lawyer's fees, 
relating to the performance of the Work, provided that any such claim, damage, loss or 
expense is attributable to bodily injury,  sickness, disease, or death or injury of any 
person or to damage to property, including loss of use, caused by a negligent act of the 
Contractor, a Trade Contractor or Supplier, or anyone employed by them.

8.2	In all claims against the Owner or any of the Owner's agents or employees, any 
employee of the Contractor, any Trade Contractor or Suppliers, or anyone employed by 
them, or anyone for whose acts any of them may be liable, the indemnification obligation 
will not be limited in any way by any limitation on the amount or type of damages, 
compensation or benefits payable by or for the Contractor, any Trade Contractor or 
Supplier under Worker's Compensation Act, Disability Benefits Act, or any other 
employment benefit act.

8.3 All damage or loss to any property in whole or in part by the Contractor, any Trade 
Contractor or Supplier, or anyone employed by any of them, or by anyone, for whose acts 
any of them may be liable, will be remedied by the Contractor.

9. Insurance

9.1	The Contractor will procure and maintain, during the entire term of the Project, the 
following insurance policies:

9.1.1	Worker's Compensation and Employer's liability insurance;

9.1.2     General Liability, including products and completed operations;

9.1.3     Automobile Liability Insurance.

9.2	Both the General Liability and Automobile Liability coverage will have coverage with 
limits as required by State law for Bodily Injury and Property Damage, and are to be with 
an insurance company with a Best Rating of AA or better.  The Worker's Compensation and 
Employer's Liability coverage will have minimum limits as set by law.

9.3	Certificates of insurance acceptable to the Owner pertaining to the insurance 
required by Paragraph 9.1 will be filed with the Owner prior to commencement of the Work. 
These Certificates will contain a provision that coverage provided in the policy will not 
be cancelled until at least ten (10) day prior written notice to the Owner.

9.4	The insured's loss is to be adjusted with the Owner and  made payable to the Owner; 
provided that the Owner will pay to the Contractor that portion of insurance proceeds which 
is attributable to Work performed by the Contractor for which the Contractor has not 
received payment. The Contractor waives all rights against the Owner for damages caused by 
fire or other perils to the extent covered by insurance. The Contractor will require similar 
waivers by Trade Contractors and Suppliers.

9.5	The Contractor agrees, at all times during the performance of the Work, to provide 
insurance for the full replacement cost of the house, for the perils of fire  and extended 
coverage (not to include earthquake insurance), naming the Owner as the insured.   The 
Contractor's insurance will only cover Work to be done by the Contractor, and will not 
cover any additional Work which the Owner may wish to perform on the Project.  In the event 
the Owner will request the Contractor to extend Contractor's insurance to cover additional 
Work contracted independently by the Owner, the Owner agrees that the Owner will pay all 
additional premiums required for additional insurance to Contractor on demand.

9.6	The Owner, at the Owner's option, may purchase and maintain other insurance as the 
Owner may deem appropriate.

10.	Prevention of Liens

10.1 The Contractor agrees to pay, when due, all claims for labor and/or materials furnished 
for Work, and to prevent the filing of any liens by mechanics or material men, or 
attachments, garnishments or suits involving the title of the property on which the Work is 
performed. The Contractor agrees, within fifteen (15) days after written demand is mailed to 
the Contractor, at the address stated in this Contract by United States mail, to cause the 
effect of any such suit or lien to be removed from the premises. In the event the Contractor 
has a dispute with a Trade Contractor, Supplier, or person supplying labor or materials to 
the Project, the Contractor will bond the Owner against any loss from any such claim of liens 
and then have the right to prosecute the claim of lien to a completion at the Contractor's 
sole cost and expense. In the event the Contractor can cause lien to be removed from any 
policy of title insurance which the Owner may obtain covering the real property subject to 
this Contract, then the Contractor will have no obligation to bond against mechanic's lien 
and the Owner will accept title insurance policy as sufficient security to the Owner to 
permit the Contractor to litigate claim of lien, without the necessity of posting a bond.

11.	Work Safety

11.1 The Contractor will be responsible for establishing, supervising, and maintaining 
all safety precautions and programs in connection with Work performed on the Project.

11.2   The Contractor and Owner will comply with all federal, state, and local laws and 
regulations applicable to the Project.

11.3    The Contractor will take all reasonable steps to prevent damages, injury, or 
loss to:

11.3.1	All employees performing the Work and all other persons who may be affected;

11.3.2	All of the Work and materials, equipment, or products to be used on the Project, 
whether in storage or on or off the site, and in the care, custody or control of the 
Contractor, or any Trade Contractor or Supplier;

11.3.3	All property on the site or adjacent to the site  including trees, shrubs, lawns, 
lots, pavements, roadways,  utilities, and structures not designated for removal, relocation, 
or replacement.

12.	Assignment and Subcontracting

12.1	The Contractor will not assign any portion of the Work to any person or other 
Contractor; however, the Contractor will have the right to subcontract portions of the Work 
to Trade Contractors of the Contractor's choosing without the necessity of obtaining 
permission, either written or oral, from the Owner.

12.2	The Contractor will pay each Trade Contractor, on receipt of payment from the Owner, 
amounts he may determine appropriate, but consistent with lender's requirements or of this 
Contract.

13.	Guarantees

13.1	The Contractor guarantees the Owner, and the Owner's successors in interest, against 
any loss or damage arising from any defect in materials furnished or workmanship performed 
under this Contract for a period of one (6) years from the date of Certificate of Occupancy 
issued by the Building Department

13.2	Nothing in this Contract will derogate the Contractor's liability for patent or 
latent defects under applicable law.
This agreement is made	(date).
Signature of Owner________________________
Signature of Contractor______________________

REMEMBER: Don't use this document "as-is." Take the time to adapt similar ideas to your project. If you decide to act as the General Contractor, you'll need to create individual Agreement and Condition documents for each Trade Contractor. Also, a Purchase Order system will be required to coordinate Supplier activities.

By assuming the responsibilities of a General Contractor, the Owner becomes involved with a myriad of contractual details but this is the only way to gain personal control on a daily basis.

Otherwise, you must be willing to relinquish control and trust a General Contractor to build your home as if it were his/her own project with a written Agreement to follow your Drawings, Specifications, and Conditions. If this is the case, a set of Contract Documents with your General Contractor will suffice. The General Contractor will then be responsible for creation of individual Agreement and Condition documents for each Trade Contractor and a Purchase Order system to coordinate Suppliers.

Acting as an Ownerbuilder makes you responsible for managing scope of work. You'll be in charge of all activities necessary to perform Drawings and Specifications and then coordinating the Conditions under which the work will be performed with each individual Trade Contractor and Supplier.

You must be assertive, confident, and organized to act as an Ownerbuilder!

Email comments or send questions to:
Owner Builder Services -- Tom Landis

Visit the Owner Builder Coach for more free information:
http://www.OwnerBuilderCoach.com

Call 360/250-2170
P.O. Box 711, Black Diamond, Washington 98010 USA
 


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