Attorney’s fees are a fact of life when you have to go to court. Normally, unless your purchase agreement/contract contains a provision for recovering these fees in the event that litigation becomes necessary, you’re going to have to pay your attorney yourself and you won’t be able to get that money back.
The inspection plan that a forensic architect or engineer comes up with after they’ve reviewed everything is a plan on how to move forward after the initial visual inspection. This sometimes includes performing invasive testing to the building envelope (outer structure) and interior components (walls, floors, and ceilings) to allow an expert to see as-built conditions and check the performance of building components over time.
Most contracts these days are offered to an owner using a “standard form” that are created by industry organizations and, while they generally reflect certain recognized standards, they do tend to reflect the bias of that industry. Standard contract forms have several advantages, including their ease of use, less need for an attorney, and they’re usually easier to interpret by the parties and or courts, if necessary.
However, these standard/generic contracts also have disadvantages such as they do reflect industry bias and changes through an addendum can make the contract hard to follow. The generic contract form provided by the AIA appears to be the one used most often. Most construction contracts, including the AIA forms, consist of several documents, which include the main agreement, a form called general conditions (or AIA form 201 which attempts to list the rules and procedures during the work) and special conditions (usually prepared by the architect), and finally, the building plans or specifications.
When using the AIA forms, where a “family” of agreements are intended to be used together, there are two main contract labels, or the “A” and “B” series. The “A” series is a contract between an owner and contractor and the “B” series is a contract between architect and owner. A third series, or the “G” series, is a group of documents that are generated while the work is in progress, such as change orders and clarification requests.
The other contract an owner should encounter when a renovation repair is contemplated is the architect agreement that in turn usually has an addendum to modify the architect’s form agreement for a particular project. This agreement usually sets forth a number of details, such as the requirement to design within a budget, waiver of consequential damages, and a number of other important issues for the owner. The architect agreement should be thought of as the first necessary agreement, since an owner cannot really start most renovation or repair projects and or obtain a bid without a set of design documents prepared after a contract between owner and architect has been signed.
READ PART ONE HERE
If you’re planning on having any sort of major work done to your home-such as a remodel, renovation, or repair, a major part of project success is a good contract. As the owner, having a general understanding of what a contract is, and its major pieces will help you negotiate with your contractor, or through an attorney, to get a good contract signed. Contracts are signed by someone called a “party” to an agreement. A contract protects both “sides” to an agreement if negotiated properly. It will spell out the scope of the work, who does what, how much the project will cost, and how long it is supposed to take.
There are a few different types of contracts and a number of different documents that should be included in a contract. The owner may contract with both an architect and a general contractor, and depending upon permit requirements, with just a general contractor. Many contracts that are signed today use standard forms provided by industry associations with the most popular supplied by the AIA.
Most homeowners have never gone through the experience of having significant work done on their homes, whether it be a remodel, renovation, or a repair of some sort. For this reason, most homeowners will be unfamiliar with the process, especially with the specifics regarding a contract with a contractor.
WHAT IS A CONTRACT? A simple explanation of its function is that it should record the terms of the agreement between the parties. Generally, a very simple definition of a renovation/repair contract is that it will state the services/products that will be provided and the delivery approach terms for that/those service(s), the agreed upon price, and the fact that both parties have agreed on everything (usually with a signature on the signature block when the contract is written).
However, contracts for construction work are usually more complicated and contain several lengthy component parts than what this simple definition contemplates. For that reason there are standardized forms that are quite often used, especially when a lawyer isn’t involved (not recommended). Typically, a construction project such as a remodel or renovation will require the services of multiple contractors and possibly designers, and the contract duties of each should be spelled out in separate agreements with all participants.
Renovation/repair contracts have several classifications. One classification relates to how the contract is “priced,” as opposed to how the services/products will be “delivered.”
As for pricing, there are three different and commonly used types of contracts in the building trades-lump sum, cost plus, and cost plus with max price. Each of these “pricing approaches” have pluses and minuses, depending upon the owner’s risk tolerance for increases in prices for the work.
No matter what type of “price approach” that is agreed upon, there are generally three “delivery” methods a contractor can offer to an owner. These approaches have come to be known as:
• Design-Bid-Build – The owner enters into a contract with both an architect and a general contractor, after the contractor supplies a “bid;”
• Design Build – One firm (usually a general contractor) provides all services, including design;
• Construction Manager at risk – The owner enters into a contract with a single entity who then manages other contractors and designers. Another subpart of this approach is where the owner can hire one entity to act as the owner’s agent but the owner remains “at risk.” This variation is called construction manager “as agent.”
