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What to Look For in a Builder’s Contract

Before you sign that contract, find out the 9 things that must be included.

Javic Homes, Neighbor

Posted Thu, Feb 21, 2013 at 3:17 pm ET|Updated Thu, Feb 21, 2013 at 6:48 pm ET

By Jon Solomon

The days of a handshake agreement are long gone. When it comes to the critical components of a builder’s contract for a Tampa custom home, here are the areas that homeowners cannot do without.

Scope: Review all of the details in the scope and specifications for the home. Make sure this section is clear if there is a conflict between the scope and plan.
Timeframe: This area should clearly show what defines the start and completion of your home. It should also provide the estimated duration of the project.
Price: Of course, there has to be a section that outlines a price agreement, but make sure it’s unambiguous on when and how payments are to be made.
Change Orders: Many people believe this is an evil section, but it’s important for home builders in Tampa Florida to specify what is considered a change and how changes are to be documented, estimated and communicated.
Closing & Completion: The contract must specify what needs to be done for the project to be completed. Is it a Certificate of Occupancy, Final Payment and/or Agreement on a Punch List?
Dispute Resolution: You don’t want or expect to have a dispute, but make sure it’s clear between all parties what the process is if a disagreement should occur.
Final Lien Release: Make sure that a full release of lien is provided, as well as an affidavit stating that all vendors have been paid, in order to receive final payment.
Insurance: This section describes what insurance is being provided and by which party. Typically the Contractor will at a minimum provide General Liability, Workers Comp, and Builder’s Risk.
Warranty: There are statutory requirements for new home warranties but they can be vague. Make sure that your contract specifies what’s covered in the warranty.

Certainly there are many other sections in a Tampa custom builders contract but these are the ones that each homeowner needs to pay particular attention to and understand. If any of these components are missing or appear to be too vague, it may be a red flag – so be sure to do your research and know the facts. Happy homebuilding!