Protect Yourself With A Builder’s Contract

Before you jump headlong into any substantial building project, it is important that you and your builder agree to several key points upfront. Items such as budgeting, project scheduling, fees and the parameters around up-charges or upgrades should be clearly agreed upon prior to the start of your project. What you need is a Builder’s Contract.

If you are going to be financing your new home or renovation, this contract will likely be required by your lender. Even if it is not, it is an important document to help protect both parties’ financial interests and will help head off any common misunderstandings.

By having this detailed document, in writing and signed by both you and your builder, you will help ensure that you are getting what you pay for, in the way you want it built and in the time frame you desire. For the builder’s part, when you ask to upgrade, for example, from a Corian counter top to a granite one, there will be no question as to the increase in project price. I like to refer to this document as the “No Surprises” contract.

There are many places to go to get a contract, and your builder may even have a standard form that they use. But do your homework and be prepared with one of your own just in case.

Here is a contract that I like to use that is detailed, in-depth, and covers almost all the aspects of the building process and will work as a good foundation for you.This is a New York specific form from construction-contract.net.

New York Custom Home Contract

To be extra safe, have your attorney review the contract prior to signing and make sure it overs all the different aspects and contingencies you foresee arising during the progress of the project. And as usual, feel free to ask me any questions you may have. I’d be happy to help.

– Jim

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Filed under Construction Loans, General Questions

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