When the decision is made to move forward on building a new home, it is important that the consumer and contractor have the same understanding of the work that will be done. With the wide and varied scope of activities to take place as part of constructing a home, a detailed contract, which will serve as a legal document for the project, is imperative for both parties.
A construction contract, which offers protection for both the contractor and the client, identifies the specifics and expectations of a project to ensure all parties are in agreement before commencing work. The contract functions as a record that the contractor and Owner agree on exactly what products and services are to be included. There is quite a bit of work that is completed before we sign a Design-Build contract, including agreeing on a budget goal; gathering Owner inspiration photos and ideas; completing our Owner’s Criteria Worksheet; and finally selecting the appropriate architect for the client and the project. Upon finishing those activities, we are able to approve and sign the contract.
The Design-Build Agreement will include the following content:
- The date of the contract signing, along with the owner’s and contractor’s full name and address.
- Scope of Work: an explanation of the design and construction services, and the material, equipment, tools and labor required to complete the construction project, with the content outlined within Contract Documents that are included with the contract. In addition, the work to be completed by the architect is identified so that it will be done in coordination with Balsitis Contracting and that all drawings will be provided.
- Contract Documents: these are comprised of the contract agreement; construction documents prepared and approved by both parties, including architectural plans, structural plans, and the site plan; the Control Estimate that defines the Scope of Work and associated costs; and all written modifications, amendments, minor changes, and Change Orders.
- Pre-Construction Work: the two parties conduct a thorough review of and finalize the Contract Documents; coordinate the development, review, and consent of the preliminary design; preparation, review, and completion of the proposal that includes the contract price, a schedule of bids and allowances, and an estimated date of substantial completion of the construction project; and the preparation and approval of the final plans and specifications.
- Ownership of Work Product: the content provided by Balsitis Contracting to the owner is retained and owned by the company
- Contract Time: this portion will be outlined in the project schedule to include the date the project will begin, the expected substantial completion date, and an understanding that final project completion will be accomplished in a timeframe that is “reasonably practicable.”
- Contract Price: the cost breakdown, including a detailed list of materials (name, brand, size, models, performance capacity of the items, and the quantity), labor, and permits, as well as the payment procedure is included.
- Control Estimate: provided within 30 days of receipt of the final plans and contains the estimated Cost of the Work plus the Contractor’s Fee. It also includes a project schedule that provides activity sequences and durations.
- Procedure for Payment: outlines the manner in which the owner submits payments to Balsitis Contracting and when payments are due. The “open book” arrangement practiced by Balsitis Contracting is also explained within this section.
- Termination for Convenience: describes how in writing, the owner may terminate the agreement.
- Representatives of the Parties: lists the full names and addresses of the individual identified by the owner and the Balsitis Contracting staff who would have authority and responsibility regarding the completion of the project.
- Bonds, Insurance, and Warranty: explains the insurance coverages and warranties related to the project.
- Change Orders: describes the process in which the owner can make additions or deletions to the project in writing, with the change order specifying the “changes, price modifications (if any), and extension of time for performance (if any).”
- Other Provisions: explains lien rights, notices regarding construction defects, hidden conditions, and dispute resolution.
The Balsitis Contracting contract is straightforward and understandable, allowing our clients to rest easy that the work to be done on their behalf will be done to the specifications outlined. Call 262-203-3952, e-mail info@balsitiscontracting.com, or complete our online form to get started on the construction of your new home.