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CONTRACTS

A verbal contract isn’t worth the papger it’s written on. - Samuel Goldwyn

ALTERNATIVES:

11.1. Obtain copies of standard contracts used by the American Institute of Architects, the Associated General Contractors, the National Association of Home Builders, or the National Association of the Remodeling Industry. Familiarize yourself with the important Conditions that govern the Design-Build process. Refer to Cushman's Construction Management Formbook.

REFINEMENT:

11.2. Utilize standard contracts used by professionals to better understand what Conditions are important to you. If necessary, enlarge the standard contract forms on a duplication machine so it's easier to read the fine print in order to create a rough draft of Conditions to fit your situation. Contact a "friendly" Attorney familiar with construction contract law to review your rough draft. Review Collier's Managing Construction: The Contractual Viewpoint.

DOCUMENTATION:

11.3. Prepare your Conditions document for prior to first meeting with General or Specialty Contractors. This is where a word processor really comes in handy! Based on the rough drafts created by the "cut & paste" method, you'll be able to develop a single, generic document then adapt it to each trade contractor. Should you decide to deal exclusively with a General Contractor, you'll only need one Conditions document; however, by assuming the responsibilities of a General Contractor, acting as an Owner-Builder, you'll need separate Conditions documents for each trade contractor. Refer to Acret’s Simplified Guide to Construction Law.

NEGOTIATION:

11.4. Don’t impulsively show your Conditions document to contractors until you’ve had a chance to first review their standard, boilerplate form. The difference between what’s important to you and what’s important to them will become obvious. Once you've chosen a General or Specialty contractor with whom you expect to be doing business, arrange a second meeting to make available a copy of your Conditions document for their review and commentary. Ask them to offer opinions at this time so you both have ample opportunity to weigh and consider your differences and make changes if necessary. Written "Conditions" should be required for all construction jobs; however, if you're comfortable with a person's reputation sometimes a handshake will suffice, but this is not advisable if the contract price exceeds $1,000. Whether verbal or written, the point of a contract is to clearly communicate what both parties expect of one another and be able to enforce the terms of your agreement. Discover insights from Jones’ Handbook of Construction Contracting.

MANAGEMENT:

11.5. Be certain all requirements of an enforceable contract are included in the "Conditions" document. Your approved Drawings and written Specifications should be referenced in the Agreement, and Conditions governing performance must be clearly referenced as well. The General Contractor and each Specialty Contractor must come to terms with your requirements before work begins! Prior to your meeting with a contractor where both parties sign an Agreement, be ready with a final draft of Conditions documents accompanied by Drawings and Specifications. Become familiar with O’Brien’s Construction Change Orders.

DILIGENCE:

11.6. Consolidate "Contract Documents". With your project at completion, dedicate one file for all legal paperwork. In this way your "Cardboard Box Files" contain primarily trade contractor, supplier, and manufacturer information. A single legal file exclusively holds all contract documentation.

FOLLOW-UP:

11.7. Be certain that the time period imposed by your State for “Warranty of Habitability” remains in full force. Don’t limit your consumer rights by ever agreeing to a lesser period of warranty. Contact your State’s Attorney General’s Office of Consumer Affairs, inquiring about your warranty rights.

FURTHER READING:

Contract Documents

Your Contract Documents are a combination of four sets of information: Drawings, Specifications, Conditions, and Agreements. Each set of information references the other sets, and together form the basis of a good working relationship with the Trade Contractors and Suppliers.

OBS NewsEach set of information references the other sets, and together form the basis of a good working relationship with Architects, Trade Contractors, Suppliers, and Building Officials.

Have you created these documents before construction begins?

Review the 31 issues you'll want to include in this documentation.

BIBLIOGRAPHY:

Acret, James. Simplified Guide to Construction Law.
Los Angeles: Building News, 1997, 2001 2nd.

Collier, Keith. Managing Construction: The Contractual Viewpoint.
Albany: Delmar, 1994.

Cushman, Robert. Construction Management Formbook.
New York: McGraw-Hill, 1983, 1991 2nd.

Jones, Jack. Handbook of Construction Contracting.
Carlsbad: Craftsman, 1987. (Still a Classic)

O’Brien, James. Construction Change Orders.
New York: McGraw-Hill, 1998.

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