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Unfortunately I did not find your book in time for this house but we have it for the next one. It is a great book, full of useful information. Lots of it seems like common sense after you read it but I did not have the common sense to think of it before I read it.
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Contracts for subs?


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By Tavis in Stevensville, MT on 3/21/2007


I am gathering bids for the home I will be O-B'ing this summer and need to get my documentation together. Namely, I need to get some contracts together to be used with the subcontractors.

I've looked on the web and nothing really jumps out at me. Although searches seem to return the Threshold Builder Contracts and Forms quite a bit builderforms.com

Anybody have feedback on that product? Or other recommendations. If I'm not mistaken the book doesn't talk specifics on where to get the said contracts?


Thanks!


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By Michael in Cave Creek, AZ on 3/22/2007


The American Institute of Architects publishes a pretty comprehensive set of contract documents suitable for residential and commercial construction. I believe they are fairly expensive ($300 or so).  They can be purchased from the AIA website.

I sometimes encounter them on government projects and like to use them for commercial work.  My approach to owner building is typically more of a handshake or initialing somebody's proposal. The dollar value for an individual trade on a house is usually pretty low. If non-performance issues arise, it is not all that hard to find substitutes. Just make sure that you don't pay out more than the value of the work done to date, and you probably won't get in trouble.


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By Tom in Stroudsburg, PA on 3/22/2007


The courts are full of cases for non performance and fraud. Contracts protect both sides. A fool and his money are soon parted, as they say. I initially bought a set of plans that I ended up not using but I bought the extras and in one of the packages was a sample contract. Everything was broke down by trade which made it easy to segment for subs. It was relatively cheap compared to the prints. I don't remember the exact cost but I know it wasn't enough for me to put thought into whether to add it or not. You might check The house plan sites or books. That said, The proposal and initials gets you close but it leaves out all your protections. Make additions, obligations, payment arrangements, performance penalties, specific material requirements and who is responsible for clean up.  Have it retyped and be sure there is a signature from the sub on it.
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By Kenneth in Lees Summit, MO on 3/23/2007


I went more with Michael's approach here.  Some of my contracts (eg. sheetrock) were nothing more than a page torn out of a spiral notebook with my address on it, and an agreement to provide finished sheetrock at a fixed price (the bid price).  However some trades are a bit more crucial, I would have never been satisfied with a proposal like that from my ICF subcontractor.

I would like to clarify or perhaps one additional bit of advice to Michael's about never paying more that the value of work done to date.  Never pay so much on the job that it isn't worth the subcontractor to not come out and finish the work.  As an example, if you pay your concrete flatworker by the square foot (not unusual), and he pours your driveway but not your sidewalks, don't pay him for the entire driveway as a sidewalk job may be simply too small to lure him back to finish, thus leading you to have to find a new flatwork contractor for a small job.  For progress payments, I like to give the subcontractor enough to cover his suppliers (unless they were using my supplies, and be sure you get lien releases from his suppliers, not just the subcontractor) and his hired employees, but I like to withhold enough so that I know he will ultimately finish the job.  This is one experience many O-Bs learn the hard way, myself included.  I would rather be able to hire a replacement to finish a job than hound a nonresponsive subcontractor to finish the job.  They don't become nonresponsive when there is a good bit of money on the table, and if they do, well that money can go to the increased cost you will incur trying to get someone to do a partial or small job.

Now you need to understand the laws of your state.  In some states it is very easy to file a mechanic's lien against your property for the amount of damages, and in some states they don't even have to notify you that a mechanic's lien was filed leading you to find it at closing - fire a subcontractor or don't pay them an entire amount whether they do the job or not and you risk seeing this mechanic's lien.  However in some states, the sub contractor cannot file mechanic's liens if they are working directly for the owner of the property (which as an O-B that is you) unless they reserve the right to file a mechanic's lien in their contract (no contract, handshake, no mechanic's lien).  Now then, their suppliers can still file mechanic's liens as the suppliers are not working directly for the owners but for the subcontractor (unless you get your own supplies).  Missouri is an example of the latter example, and since I was an O-B (although many thought I was the GC, and not an O-B) and ultimately all subcontractors worked for me and didn't necessarily know the laws, this was a bit of extra protection for me.  One subcontractor threatened to file a mechanic's lien, but a letter on lawyer letterhead explaining his rights to his attorney seemed to alleviate the situation.  Out of all my subcontractors, only one actually had the proper language reserving his right to file a mechanic's lien, and this was not a subcontractor that did new construction but always worked for the owners of property, also one of the few subcontractors that insisted on a contract prior to starting work.  Interestingly only one of two contracts I actually signed for subcontract work.

However, this makes prescreening your subcontractors and getting your own supplies that much more critical.  For example, my subcontractor could choose not to pay a supplier and I was still vulnerable to a mechanic's lien from that supplier (which is why I wanted mechanic's liens from suppliers too, not just the sub).  I figure if they are bad subcontractors, then their paper isn't much better than they are and how much protection does it really get you?  No paper, and you are free to fire them at will as they have no protection either.  I would rather they have no protection, and am willing to sacrifice my own protection to get them there.  As for me, I am resourceful and will find a solution, even if that means me doing the work myself.  This is not a conventional approach, and if you are going down this path you better make sure you have alternatives and you better make sure you know the impacts of the trades following any given trade.


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By John in Wauconda, IL on 3/23/2007


Officemax has all the forms you need, carbon copies... $44.99 or something like that.
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By Pam in Wichita, KS on 3/30/2007


Kenneth, in your post you mention that you wanted mechanic's liens from suppliers--how did you acquire lien releases from suppliers when your sub bought the supplies for the job?  Did you give the sub blank copies of lien releases for his suppliers to sign, or did you take the lien releases to the supplier along with proof that you paid the sub for the supplies?  We are preparing to award bids on our project in Wichita, Kansas.  For most of the work we will be buying our own supplies, but a few of the subs are doing turnkey jobs.  Thank you for your advice!


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By Jeff in Bethesda, MD on 11/5/2007


Tavis,

Did you go with the Office Max forms or find others you liked better?  I also am looking for forms, wondering whether to spring for more expensive ones.  As a beginner I want to err on the side of completeness. 

Jeff


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By Myleen in Austin, TX on 11/6/2007


Found a good place online to buy contracts, and there is a General Contractor package ($59.95) that includes the following:

  • General Contractor Agreement: Clearly lays out the kind of work to be performed, the quality of work expected by the customer and promised by the contractor (including the types of materials to be used), and the terms and conditions under which that work will be performed.
  • Subcontractor Agreement: Intended to be used by an independent contractor to hire a subcontractor to perform certain work on a job that the contractor has agreed to perform.
  • Contractor Proposal Bid Form: Detailed, specific proposals allow customers to see exactly what a particular contractor is promising to do (and at what cost), while also allowing the contractor to manage customer expectations, ensuring a smooth process free of disputes.
  • Invoice: Presents a clear and detailed statement of how much money is due, when it is due, and what services or products the customer is being charged for.
  • Release and Waiver of Liens: Explicitly states that the customer has paid in full, and that no liens against the customer’s property are still in effect.
  • Change Order Form: A written proposal or contract given to the customer before making any changes to the amount the project will cost, or the procedure or materials used to complete that project.
  • Work Order Form: This written record gives both the provider and the customer a clear understanding of the scope of the work to be done, as well as the estimated cost involved.
  • General Contractor Amendment Agreement: Documentation of any changes made after a general contractor agreement has been entered into.
  • Amendment to Subcontractor Agreement: Written amendment to an agreement entered into with a subcontractor.

  • findlegalforms.com/xcart/customer/product.php

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    By Roger in Petoskey, MI on 11/8/2007


    I used all my documentation from the "Complete Guide to Contracting Your Home".  I basically used three documents for legal reasons with each of my subcontractors.  The most extensive is not actually the contract proper, but instead the specifications sheet (or material take off if dealing with a material supplier only).  I used the basic spec sheets from the above book for each subcontractor and then altered them to make more sense for my job.  For the electrical, mechanical and plumbing I had pretty long lists of specifics, so I could compare apples to apples. 

    Next I included a copy of the prints to each subcontractor. 

    Lastly, after choosing a subcontractor for the job, then I pulled out an actual contract.  This was also from the book, but I did simplify it.  I basically mentioned what the trade was, and referred to the spec sheet and prints on the contract.  Then I listed the agreed upon price, and how we agree to disperse that money.  Lastly I included the part about being able to fire the subcontractor if they abandon the job for no reason.

    I stapled the spec sheet to the contract and we each kept a copy.  It has been very helpful during the building process when a discrepancy comes up. 

    My only flaw with the book is that they don't offer an electronic version of the forms.  Obviously everyone will need to alter them for their own home.  So it was time consuming for me to retype them. 

    I should also mention that I didn't necessarily understand every line item in the specifications, but after interviewing 5 different subcontractors I was able to fine tune the document based on their input.

    After getting a signed document, I also requested the sub have his/her workers compensation company send/fax me a copy of their coverage.  The bank seemed to really like all those documents, and not much else is really needed to cover yourself.

    I included a example spec as well.

    Roger


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    By George in Wharton, TX on 11/9/2007


    Roger,

    Thanks for the info.  I have seen the contracts in the book you referred to and wondered in all practicality how potential subs would accept it.  You said after visiting with other subs you fined tuned it, could you offer up that fined tuned copy?


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    By Roger in Petoskey, MI on 11/9/2007


    Sure George,

    I tried to PM a response, but I got the feeling it didn't work.  Besides others may appreciate using these forms. 

    In regards to the sub's acceptance, most of them embraced the forms.  Especially the plumbing, HVAC and electrical trades.  They knew that I was getting apples to apples bids and many of them were able to put together an accurate bid quicker with the list.  They all had a copy of the designs as well. 

    Some of the sub's chuckled at my forms.  For some of the smaller jobs, the specification list didn't have much unique information about my job and basically described what most of these guys do everyday (i.e. drywall, gutter, roofing)  In fact for those three trades the spec lists were actually out dated.  These trades have new and better materials than are listed. 

    They really were useful later on when a sub questioned what their responsibility was on the job.  I didn't have a hard time getting my electrician to wire for the tile heat pads (even though he thought it wasn't included on the bid) when I showed him the spec sheet.

    I've attached all my specs (these continue to get further fine tuned of course, to fit my circumstance).  I also have some other forms: a lumber takeoff and room schedule which I used a lot.

    Roger


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    By George in Wharton, TX on 11/13/2007


    Roger,
     
    I could only download the roofing specs.  If there are any other "forms," I do not think they got uploaded.  If you have anything else it would be great if you could PM me.

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    By Dorothy & James in Tampa, FL on 11/15/2007


    I could only find your roofing specs.

    Dorothy


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    By Mary Beth in Dublin, OH on 11/25/2007


    Roger,

    I would, also, like to get copies of the rest of your bid spec sheets. I could only access the drywall and roofing. Also, do you have copies of any of the contracts you used?

    Thanks,

    Mary Beth


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    By Kenneth in Lees Summit, MO on 11/26/2007


    Sorry, it has been a long time since I looked on this thread, probably too late for you but still a good question that deserves and answer.

    First of all, I paid attention to the suppliers subs were using. Lets use a concrete subcontractor as an example, I paid attention to whose name was on the concrete pumper truck as well as the name on the concrete Readymix truck. The concrete guys got progress payments, I paid the first progress payment and told them the next progress payment wouldn't be made until I received mechanics' lien releases from the first round of construction. I also realized they stopped by the lumber supplier to pick up some form work, and I didn't worry about this because it was small, and since they were loading it directly on their truck I figured the supplier didn't have an address or build job associated with it. One of my concrete subs used lumber from Lowe's, and the chances of getting a lien release from them was nil anyway (and the chance of getting a mechanic's lien for a relatively small amount of lumber likely even smaller). I realize they need my payment to pay their suppliers, so one payment delay between suppliers and lien releases seemed reasonable.

    For the subs that didn't have progress payments, I would also pay attention to the names on the trucks and call the billing department of these suppliers. Most subs have a history with suppliers, I wanted to know that their payment history was good. Further I would give them a week or so after I knew the check cleared my bank, and call the suppliers again asking if I may fax a lien release for them to sign.

    Interesting on one supplier and one subcontractor, the supplier made the delivery and the subcontractor was not there (very common). However the supplier would not leave without payment for his materials, definitely reflecting that the subcontractor had problems with making payments to suppliers (he was a good technician, but sometimes good technicians don't get financial training when they decide to go out on their own). I paid the supplier, got a paid invoice, provided the invoice to the sub and deducted it from his bid. No problems.

    And truthfully some subs (HVAC and drywall), I didn't have a clue as to who their suppliers were. Given the size of my drywall subcontractor, I figured if he had supplier problems it would severely hamstring his operations. And as to HVAC, I used to work with one of his parents and still talk to them, I don't think he would have caused me long-term issues.

    Once you explain to your subs that you need the lien releases for your bank loan, they don't have any problems getting them. However be reasonable and don't ask for lien releases from every dime they spend (oops, need a plumbing fitting, I am going to the closest supplier and not my normal supplier) but at least pay attention to who the big money supplies are coming from.


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