Be ready to build that home
Building a home is a significant event in our lives – not unlike buying our first home or having our first kid.
Maybe that’s going too far, but if you ever had a house built, you know it can be a rewarding experience or a disaster – or something in between.
There are plenty of things you can do to make your home construction project enjoyable.
Ample money is the first thing that comes to mind.
A reputable contractor is definitely an essential element to a successful home-building project. In our area, there are dozens of good contractors.
How do you find one?
Ask around. Talk to builders. Check with the California Contractor’s State License Board if you can get through on the phone. (You can’t, so check its Web site at http://www.cslb.ca.gov. Talk with architects. Ask suppliers and homeowners association representatives.
Better yet, check with the Contractors Association of Truckee Tahoe at 550-9999. Helping you find the perfect contractor is one of the many services offered by CATT.
If you’ve located a prospective contractor call his references. Don’t assume that if a contractor lists references, they will give unqualified endorsements. If the reference has the same last name as the builder, don’t call. Look at other houses he built.
A good rapport with your builder is important. Remember, the least expensive contractor may cost you money in the long run.
Do you need a written agreement? Yes. Contractors are required by law to have written contracts for home construction. Besides, both sides want a contract – to clarify and memorialize the agreement.
What kind of a contract? Where do you get one? The residential contract most often used locally (at least historically) is the so-called Proposal and Contract.
The Proposal and Contract does little more than recite that contractor will build a house for owner per plans and specifications for a fee. Sometimes it doesn’t even say that. It’s better than nothing, but not much. If you want brevity and don’t have a Proposal and Contract form, any cocktail napkin will do.
On the other end of the spectrum are the American Institute of Architects (AIA) contracts.
They can easily run 20 or 30 pages with more fine print than a GMAC car financing form. The AIA contract is generally fair, but it assumes that an architect remains actively involved throughout the home-building project, which is often not the case. If you prefer an AIA contract, use the abbreviated form. The 1987 forms, still in circulation, were updated in 1997.
Some general contractors will ask you to sign their construction contract which may be a pre-printed form prepared by a construction trade organization like the Association of General Contractors or the American Building Contractors Association.
If you read the fine print, usually on the back, you will see it generally favors the contractor. It is supposed to. That’s the form I recommend for most of our residential contractor clients.
If the project is a residential remodel, add-on or repair, as opposed to a turnkey home, you must use a specialized Home Improvement Contract, which is generally available at office supply stores. It includes all of the unique terms required by the California legislature, which apparently assumes that repair and remodel contractors are out to fleece innocent homeowners.
Sometimes owners and contractors have their lawyers prepare a custom contract. The downside is that 20-page, lawyer-drafted construction contracts often cause the other party to go to their lawyer and the lawyers’ bills quickly add up.
I have come full circle and prefer printed form contracts for residential and small commercial jobs, with an addendum of custom terms. Owners sign them without belabored negotiation.
The goal is to arrive at a contract that is fair and acceptable to both parties. If you are doing battle over contract terms and price, let that tell you something. It may be better to turn down a contract than to commence a construction project with a party on the other side you don’t have a good feeling about. That is especially true for contractors. Trust your instincts.
Jim Porter is an attorney with Porter-Simon, with offices in Truckee, South Lake Tahoe and Reno. He is a mediator and was the Governor’s appointee to the Bipartisan McPherson Commission and the California Fair Political Practices Commission. He may be reached at firstname.lastname@example.org or at the firm’s Web site http://www.portersimon.com.
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