Home building contracts: 5 things to look out for

Home building contracts: 5 things to look out for

Home building contracts: 5 things to look out for Building a new home is an incredibly exciting time. Whether you’re a first homebuyer or rebuilding your old property, there is a real feeling that wonderful things are on the way and a stunning new build is on its way to fruition!

However, anyone who has ever had a new home built will tell you that it can have its issues. Amendments, delays, variations – all of these can enter the fray and make things pretty unpleasant if you haven’t dealt with them before.

Thankfully, robust contracts exist to ensure that you – the homeowner – aren’t messed around by any potential impediments. And, if anything unfortunate does occur, you know that you have sound legal options at your disposal.

The best building and construction lawyers will advise you to never overlook these imperative elements:

⦁ Contract type

There are four main contract types you shouldn’t overlook, these include:

⦁ Standard contract: This is a typical contract type that comprises standard terms that can be customized to suit your plans;
⦁ Fixed-price contract: This is another typical contract used for residential builds and contains a lump sum price for you to pay;
Cost-plus contract: This type of contract has no price limitation, but you agree to cover its costs. This contract is typically enlisted for projects where the build is expected to exceed $500,000 or cannot be estimated before work commences;
⦁ Custom contract: This is a specially-designed contract to suit your specific project.

⦁ Payment

As well as the contract price, it is also vital to include information including:

⦁ Any non-refundable deposits that could be outlined;
⦁ Progress payment schedules;
⦁ Late fee penalties;
⦁ Expected cost changes & how they will be dealt with;
⦁ Final payment terms;
⦁ Interest

⦁ Variations

One of the most typical issues that arise during the building phase is those of variations – whether due to misaligned expectations or your desire to change something about the build. Vagueness surrounding contract wording can often cause such disagreements and as a result is important to be on top of things such as:

⦁ The brand name & product model for every item & material used in the build;
⦁ Details of paint coats to be used as well as any extra applications;
⦁ The right values of each item e.g. how much cement etc.

⦁ Time expansions

Another typical issue that arises is in regard to the time taken to finish the work. You and your builders should know that, depending on the contract’s nature, you may be able to withhold the respective amount from the final payment or claim liquidated damages. Therefore, there must be clear guidelines regarding the time extension processes and that there are well-defined expectations for each of you.

⦁ Dispute resolution stipulations

Disputes can arise regardless of the most airtight contracts and understandings, so it is important to have a clear and transparent dispute resolution process in the event of a dispute. It is vital to include claims with regard to the completion or overall performance of the job at hand. Regardless, it is recommended that you totally clarify your dispute resolution methods beforehand, as they can arise more often than you think.

Contact the best construction lawyers to find out more

If you would like to always have the best legal representation in your corner throughout the building process, we recommend enlsting trusted professionals. They will be able to provide you with sound advice regarding your contract and will be thee to assist you should any disputes arise.

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