This is just one of a number of paid articles I wrote during 1989 and 1990, a very short writing career to be sure.
Home Building Contracts:
By Michael Van Ert
Have you ever thought of building your own home? I'm sure all of us have at one time or another. another. What do you think it would take? How would you go about it? Would you build it yourself or get someone else to do it for you? The questions just go on and on, leading some people to say "Forget it, I'll just buy a home that's already built!" out of sheer frustration.
But building a new home need not be a lesson in fustration. With planning, the road to a new home can be paved with hopeful anticipation, rather than costly and unpleasant surprises. The secret is understanding the home building con tract. Home developers usually supply their own home building cont racts, but the customer has the option of writing their own custom contract.
Just what is a home building contract? It is a promise by one party (the builder) to another (the customer) to build a home according to a pre-approved plan for a pre-determined cost. It is used by people who:
- deal with a third party (Realtors) to have a home built, either of their own design or of the contractor's design on a lot the contractor owns .
- have homes built in a contractor's development using either the contractor 's plans or their own.
- have the contractor /builder build a home on a lot the customer owns.
How does it work?
It works by outlining what has to be done by both parties and when. I've taken a typical contract and have broken it down into seventeen points with a brief explanation of each:
Stipulates the parties; who is affected by the contract and their relationship to each other.
Covers such things as changes to the contract during construction, defines the allowance and how the work on the home is to be done .
States who is responsible for the insurance coverage while building is going on and the type of insurance to be provided.
Describes the land physically, gives the legal description , and details who is responsible for clearing and preparing it.
Outlines who is responsible for the cost of the mortgage, legal fees, mortgage insurance fees, mortgage inspection fees, interest payable on mortgage progress payments and fire insurance during construction.
Deals with such items as winter construction (it costs more to build during winter months) , who is responsible for the utilities, who pays the meter deposits and who pays for the temporary power needed by the builder.
Covers all aspects of the foundation; how it is dug, how it is built and how it is back-filled after the concrete is poured. Final Grading and Cleaning
States how the land is to be graded around the home, the site clean up and the general clean up of the home once completed.
Details what options will be in the home, such as fireplaces, the types of soffits, brick laying, drain pits and others.
Labour & Materials
Tells what the contractor/builder will provide such as rough framing, siding, roof, soffits, finish carpentry, kitchen and miscellaneous labour.
Clarifies that all work will be done according to the applicable building codes, gives an allowance for light fixtures, tells whether the electrical is to be an under ground or above ground service, whether or not there will be range and dryer plugs included, T.V. plugs and telephone conduits
supplied, electric hot water connections made , extra outlets, and covers any miscellaneous items, such as air conditioning or a garage door opener that the home may have.
Details that the heating will be installed according to applicable codes in effect. It tells where duct work will be for the hot air runs and fresh air returns; and covers everything relating to the heating of the home, including dryer vents, gas trenching and gas services, where applicable.
Covers what the basic services are for the plan, detailing the hot water tank size, number and type of lawn services, color of appliances (sink, toilet, tub), whether or not there will be underground irrigation or a laundry tub supplied.
Tells how the work is to be done, the size of the drywall included, what labour is provided, taping to be done, insulation values between the drywall and whether anything else is to be drywalled (like the garage).
How many coats of paint? How will it be applied? The type and quality of paint to be used, the sanding done, the color of the inside and outside walls, the windows and casings and all finish painting are dealt with.
Specifies an amount of money the owner/contractor has to spend on the floor
covering (per square foot) and whether it will be carpet, lino, wood or tile. It says who is responsible for the overage (if there is overage) and when the flooring is to be supplied and installed.
Special Notes and Modifications
Are there changes to the existing plan and if so, what are they? Who is responsible for the cost? When does it have to be done by? These are just some of the questions covered by this catch-all segment.
A time table is critical and should be made up and agreed to by both the customer and the contractor , with the remedies available to each clearly stated should the schedule not be met.
There is one other component of the contract and that is the blueprint of the home. It has to be approved by both parties with any changes noted on the contract and the whole thing initialed before any work is started.
The last part of the contract gives the price; the basic price, the price of any extras agreed to, a final contract price that will be binding (unless the changes after wards are agreed to by the parties in writing). A building contract is essential for both the purchaser and the contractor as it tells you what yo u are obligating yourself to and what the ramifications are if you don't carry out the contract. It is not meant to put fear into the parties but to assist them in building a home.
Last piece of advice: get legal help in filling our your contract, and remember, if it is not written down and approved, then there exists a potential for misunderstanding and conflict. When in doubt, write it out!
Okanagan Homes / May 1989