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By Frank in San Pedro, CA on 1/8/2004
Here is a sample agreement that could be used. It would be worthwhile to have an Attorney give it a quick once over to make sure it complies with your situation and location.
It is in word format.
This Construction Agreement (“Agreement”) is made and entered into as of this ________day of_______________, 20_____between____________________________________________________ (“Owner”) and ________________
1. PROPERTY. The Owner’s land (“Property”) on which the construction will take place is the following: Address:_________________________________________City___________________State_______County_________________ZipCode__________and being more particularly described as Lot______________, Block_________________
Unit ________________ Phase/Section _____________, of ________________________________ Subdivision. The full legal description of the Property is as recorded with the Clerk of the Superior Court in such county and is incorporated by reference.
2. WORK. This Agreement is a Builder Assisted Contract in which the Builder has limited duties to perform, specific construction obligations/functions and also to give consultation on behalf of the Owner in order to assist the Owner in the construction of their home. The obligations and functions are as follows:
3. LIMITED CONSTRUCTION OBLIGATIONS. IT IS UNDERSTOOD BETWEEN OWNER AND BUILDER THAT BUILDER ASSUMES NO FINANCIAL OBLIGATIONS BUT RECEIVES COMPENSATION FOR SUPERVISION, CONSULTATION AND FOR LIMITED CONSTRUCTION OBLIGATIONS.
BUILDER: To supervise and arrange for the following at Owner’s expense;
1. Grading and foundation, establish temporary power, obtain permits in the owners name and with the assistance of the owner, and bring water and sewer to the foundation. Arrange for well and septic system, if required. Cost for this service is $ __________ per square foot.
2. Erection of the Eagle’s Nest Package plus the load bearing walls and felt on the roof. Arrange for final roof covering at Owner’s expense. The Owner’s cost to erect the Eagle’s Nest Package will be $________ to $_________per square foot of the total package square footage. The cost to the Owner on this package will be $_________________ per sq. ft. or $___________________. This price is from a completed, level foundation up.
3. After the erection of the superstructure, the Builder will provide consultation on the site. Generally that consultation will be at a mutually designated and acceptable time representing approximately two (2) hours per week for the builder and the owner to meet and discuss past work and future work. If the owner is not available at the specified time and the Builder is on site, the clock will be running. The Owner will be charged $50 per hour in 30-minute intervals for other time needed for consultation whether on-site or by telephone. If on-site, the Owner will be billed 30 minutes maximum each way for travel time. The Builder’s fee is $_______per sq. ft. for the total package square footage to perform his duties and obligations with a minimum fee to be paid of $__________; plus $___________ extra if a basement is required.
4. During the erection process and for 12 weeks following, the Builder is willing to give on-going additional guidance as required at $50/hour billed in 15-minute increments.
4. PLANS AND SPECIFICATIONS. The Builder will construct or have constructed the Package provided by Eagle’s Nest and the foundation required in compliance with the attached Plans and Specifications provided by Eagle’s Nest as attached hereto as Exhibit A.
5. CONTRACT PRICE. Owner shall pay to Builder for his consultation and supervision of his obligations the total Contract Price subject to additions and deductions as permitted herein of $________________________________________ computed at $_______per sq. ft. for the total structure provided by Eagle’s Nest, plus $__________ if a basement is necessary. Payments shall be made in accordance with Paragraph 7 unless otherwise provided herein.
6. LOAN RESPONSIBILITY. Owner acknowledges and represents that it has not relied upon the advice or representations of Builder regarding the type of loan or the terms of any loan to be obtained by Owner. Owner agrees to indemnify and hold Builder harmless to the fullest extent permitted by Georgia Law from any claim or loss arising out of Owner’s application and commitment for any loan or the terms of the instruments evidencing or securing the loan.
7. PAYMENTS. The Contract Price to Builder shall be paid as follows:
A. 70% paid within 7 days of the Eagle’s Nest Package being “dried-in” which includes shingles on the roof.
B. 10% paid within 7 days of the drywall completed on the interior of the home.
C. The balance of 20% paid when the home is completed and paid within 7 days; but the Builder must be paid in full within a maximum of 90 days from completion of the dry-in stage.
8. MODIFICATIONS TO CONTRACT. Modifications must be paid within 7 days of the completion of the modification and the Owner will be charged costs plus 15%.
9. COMMENCEMENT. Builder shall not be required to commence construction of the House or to obtain the building permit(s) until any financing and all other contingencies for which Owner is responsible hereunder have been met. Builder shall assist Owner in obtaining building permit(s) for construction of the house.
10. OWNERSHIP AND ABSENCE OF ENCUMBRANCES. Owner warrants and represents that: (1) it is currently the sole holder of legal and equitable title to the Property; (2) there are currently no leases, restrictions, easements, covenants, rules or regulations or other encumbrances on the Property that would prevent or inhibit construction of the House on the Property as contemplated in the Plans and Specifications; (3) the Property complies with all zoning, planning, environmental, homeowners’ association and other building requirements; and (4) all utilities necessary for the completion of the House are available at the Property and no easements are required in order to bring them to the Property.
11. SUBCONTRACTORS, EMPLOYEES AND SUPPLIERS. Builder will assist the Owner in selecting the Subcontractors, Employees and Suppliers who will work on or provide materials to the House. Owner agrees not to have any work performed on the House without the consent of the Builder by the Builder’s subcontractors, employees or suppliers until the Builder has completed all of his responsibilities on the House. Owner shall not direct, supervise or control the subcontractors, employees or suppliers of Builder or interfere with their work while the Builder is performing his initial duties and obligations of the dry-in. Builder agrees to assist the buyer in receiving fair subcontractor prices. Builder further agrees not to direct any subcontractors, product or service providers to increase their costs to provide additional monetary benefit to the builder or his associates.
12. CHANGE ORDERS. Owner acknowledges that any change order involving the duties and responsibilities of the Builder which take place after the signing of this Agreement will be charged to the Owner at the cost plus 15%. These change orders shall be in writing and require acceptance by the Builder’s signature.
13. SITE CONDITIONS. Builder may encounter rock formations, springs, latent or subsurface conditions materially differing from those ordinarily encountered and generally recognized as inherent in the work of the type covered by this Agreement that substantially inhibit work or increase the Costs or time involved in performing the work. Any increase will be paid by the Owner.
14. EMERGENCIES. If, during construction, the safety or condition of persons, the House or the Property are threatened by an emergency, not caused by the negligence of Builder, or its agents, employees, subcontractors or suppliers, Builder, without seeking instructions from Owner, may act at Builder’s discretion to prevent threatened damage, injury or loss.
15. SUBCONTRACTORS AND SUPPLIERS. No subcontractor or supplier is authorized to agree to a change on behalf of Builder.
16. CONSTRUCTION STANDARDS AND INSPECTION. Builder shall construct the House in accordance with applicable building codes or standards plus any express limited warranty provided for in Paragraph 18 and in substantial compliance with the attached Plans and Specifications, as they may be modified in accordance with this Agreement.
17. INSPECTION RIGHTS. Owner, at his expense, shall have the right and responsibility to inspect, examine and test the House at reasonable times during normal business hours. While engaging in such activities, Owner shall not interfere with the progress of the Builder’s responsibilities. Builder or its representative may be present during any such activities.
18. HOME WARRANTY DISCLOSURE. Builder warrants performing his responsibilities and work to meet all applicable codes and standards.
THE WARRANTY ABOVE CONSTITUTES THE ONLY WARRANTY, EXPRESS OR IMPLIED, PROVIDED BY BUILDER TO OWNER AND BUILDER DISCLAIMS ALL OTHER WARRANTIES, EXPRESS OR IMPLIED, INCLUDING BUT NOT LIMITED TO ANY WARRANTIES OF MERCHANTABILITY, HABITABILITY AND FITNESS FOR A PARTICULAR PURPOSE.
19. MANUFACTURERS’ WARRANTIES. Builder agrees to transfer to Owner, within five (5) days after final payment by Owner, all, if any, of Builder’s interests in all manufacturers’ warranties that by their terms are transferable by Builder to Owner.
20. PERMITS AND FEES. Owner shall be responsible for the costs of all building permits and assisting the Builder in obtaining the permits. Owner authorizes and appoints Builder to obtain such permits from governmental agencies and authorizes Builder to execute applications in Owner’s name. Owner agrees upon request by Builder to assist Builder in obtaining such permits by completing all related applications and forms.
21. TAXES. Owner shall be responsible for paying all applicable taxes and assessments on the House and Property and goods purchased.
22. HAZARDOUS MATERIALS. Owner represents that it is not aware of any hazardous materials or substances on the Property, including but not limited to asbestos and polychlorinated biphenyl (PCB). Owner shall indemnify and hold harmless Builder, its agents, employees, subcontractors and suppliers to the fullest extent permitted by state law from any and all claims, damages, losses and expenses, including but not limited to attorney’s fees and litigation or arbitration expenses, arising from or involving such hazardous materials and substances.
23. BUILDER’S INSURANCE. During construction, Owner shall purchase and maintain comprehensive Builder’s General Liability Insurance from one or more companies authorized to do business in California.
24. DEFAULT. A. Owner’s Rights: If Builder materially breaches its obligation under this Agreement, Owner shall be entitled, after giving Builder written notice of such breach and a ten (10) day period in which to substantially cure the breach, to demand arbitration if available or to terminate this Agreement in writing. B. Builder’s Rights: If Owner fails to timely make any payment required under this Agreement, Builder shall be entitled to immediately terminate this Agreement by providing written notice to Owner of such termination or to demand arbitration. C. Payments upon Termination. In the event of termination by Owner as a result of breach by Builder after commencement of work, Owner shall pay Builder any: (1) amounts due at that time; (2) amounts agreed upon in a Change Order or to which Builder is otherwise entitled; (3) all Costs incurred by Builder in connection with the House that are not covered by other payments. D. Timing of Payments. Notwithstanding any later date for payment specified in this Agreement, any Construction Draw Schedule, any Change Order or otherwise, the payments required upon termination shall be paid within seven (7) days from the date of termination. E. Interest. Payments due under this paragraph and unpaid for more than thirty (30) days shall bear interest at the rate of eighteen percent (18%) per annum.
25. MANDATORY BINDING ARBITRATION. Builder and Owner will cooperate with one another in avoiding and informally resolving disputes between them. Builder and Owner acknowledge that in the event of disputes that are not informally resolved, resolution will best be achieved through arbitration rather than civil litigation because of the substantial savings of time and expense for all parties and because of the privacy and flexibility associated with arbitration procedures. Any unresolved claim or dispute between Builder and Owner shall be decided by binding arbitration, if applicable, within the State with the rules and procedures of the arbitrator and such decision shall be final.
Owner(s) Initials_____________ Builder (Representative) Initials____________
26. OTHER PROVISIONS.
A. Time is of the essence. Time is of the essence of this Agreement. Builder’s acceptance of one or more late payments shall not constitute a waiver of Builder’s right to insist upon strict compliance with the remainder of payments due under this Agreement.
B. Transfer or Assignment. This Agreement shall not be transferred or assigned without the consent of all parties and any permitted assignee shall fulfill all of the terms and conditions of this Agreement.
C. Governing Law. This Agreement shall be governed by and construed and interpreted in accordance with California Law.
D. Cooperation. All parties agree that such documentation as is reasonably necessary to carry out the obligations of this Agreement shall be produced, executed and/or delivered by such parties at such time required to fulfill the terms and conditions of this Agreement. This subparagraph shall not require Builder and Builder is not required to assume obligations to any lender or anyone else that are in excess of those assumed by Builder in this Agreement.
E. Entire Agreement. This Agreement constitutes the sole and entire agreement between the parties. No representation, promise or inducement not included in this Agreement shall be binding upon any party.
F. Definition of Agreement. The term “Agreement” as used herein, as well as the terms “herein”, “hereunder”, and the like mean this Agreement in its entirety. All exhibits, amendments and addenda attached hereto or stated to be attached hereto are part of this Agreement.
G. Modifications. This Agreement may not be modified, altered or amended except by written instrument executed by the parties hereto, but this subparagraph shall not affect Builder’s rights under paragraph 12.
H. Terminology. All pronouns, singular or plural, masculine, feminine or neuter, shall mean and include the person, entity, firm or corporation to which they refer as the context may require. Whenever the context may require, the singular shall mean and include the plural and the plural shall mean and include the singular.
I. Successors and Assigns: This Agreement shall inure to the benefit of, and be binding upon, the parties hereto, their heirs, successors, administrators, executors and assigns.
J. Severability. Each provision of this Agreement is severable from every other provision of the Agreement. If any provision is determined to be unenforceable, the rest of the Agreement shall remain valid and enforceable. If any provision of the Agreement is determined to be unenforceable in a particular context or as to a particular right, the Agreement shall remain enforceable in all other contexts and as to all other rights.
K. Notices. Except as otherwise provided for in this Agreement, all notices or demands required or permitted hereunder shall be in writing to the address herein provided on the signature page and shall be delivered either: (1) in person; (2) by overnight delivery service prepaid; (3) by facsimile (Fax) transmission, or (4) by the United States Postal Service, postage prepaid, registered or certified, return receipt requested. Such notice shall be deemed to have been given as of the date and time the same are actually received by the party to whom the notice is directed. Refusal to accept or inability to deliver because of changed address of which no notice was given shall be deemed to be receipt of such notice. Any party, by written notice to the other, in the manner herein provided, may designate an address different from that set forth on the signature page.
M. Construction of Agreement. The parties acknowledge that each party and, if they choose, counsel for each party, has reviewed this Agreement and that any rule of construction or interpretation calling for the construction against the drafting party shall not be employed in the interpretation or construction of this Agreement.
N. Multiple Owners: In the event that there is more than one Owner, each Owner hereby authorizes and empowers any other Owner to act on his or her behalf in connection with matters relating to this Agreement, including but not limited to changes in the work and Change Orders, and each Owner authorizes Builder to rely on such action. This authorization shall not preclude Builder from requiring that each Owner agree to matters relating to the Agreement.
27. SPECIAL STIPULATIONS. The following special stipulations are made a part of this Agreement and, if
Conflicting with any preceding paragraph, shall control:
28. ACCEPTANCE. This offer is hereby accepted at _____________o’clock _______M on the ___________day of_____________________, 20_____. This instrument shall become a binding Agreement when written acceptance or a facsimile (FAX) transmission of acceptance is actually received by offeror.
Owner’s Signature Owner’s Signature
Print Name: Print Name:
Social Security No.: Social Security No.:
Home Phone: Home Phone:
Business Phone: Business Phone:
Fax No.: Fax No.: