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Re: OT - Building a house


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Posted by Billy NY on February 04, 2009 at 18:24:19 from (74.67.3.238):

In Reply to: OT - Building a house posted by dr darren on February 04, 2009 at 16:52:25:

There can be a lot of turf to cover when in comes to building construction.

1.) Contract & Documents, make sure you have a good contract AIA format and or similar, make sure the scope of work is clear and make sure the provisions for changes to the contract, (change orders) are specified including unit prices. Make sure the designer has produced a good set of drawings and specifications, minimizing loose ends, addendums, clarifications.

2.) Schedule, for a residential home it does not have to be complicated, but should have the major milestones in the overall work breakdown structure, basically a list of work activities, and durations, calculated along a critical path, of predecessor and successor activities, with other non critical path activities concurrent or off to the side, ones that don't effect the overall schedule. Can be real simple but it should be part of the contract documents, allowing an owner to enforce it.

3.) Insurance, make sure all of that is current and you are indemnified, hold harmless, covered where needed, usually typical for most jobs.

4.) Payments - this is very important, especially with residential jobs, I have seen a lot of contractors do people in with oddball payment arrangements. In the contract it should be stated that you will use AIA format, percentage of completion method, with retainage, you pay as the job progresses and work is completed, and is accepted. Retainage is held out of each progress payment, until substantial completion, you get full certificate of occupancy etc. It gives an owner leverage, job is completed and you have unacceptable work, warranty issues, numerous punchlist items not completed etc. It is released when the job is totally accepted and complete. You can arrange to pay for materials if delivered to the site, major materials, equipment etc. but you hold back on the labor until complete and accepted, 2 words to remember, complete and accepted ! Remember, you control the money, not the contractor, cash is king and is also leverage, don't ever engage in shoddy payment arrangements, contractors, especially in today's financial environment will try to front load the job, can't blame em, but percentage of completion payment method is the safest bet, they submit a monthly payment requisition (or bi-monthly in some instances), you or the owners rep, construction manager, reviews and pays for what is complete, in compliance with the drawings and specifications, applicable codes and is acceptable work, if not, you cut the value of that out of the pay req. and tell the contractor right up front before he receives payment where and why the pay req. was reduced, tends to go over better that way. I make this point because I have seen lots of people get taken for many thousands of dollars, because they just don't know how to play the game with contractors. The ultimate goal for a contractor is to complete the job and get paid, but so many of them fail to perform or talk people into very risky payment scenarios, don't do it !

5.) Coordination of the trades, this is where your project schedule is a valuable tool, apply sound logic to the construction activities up front, have to dig a hole before you pour footers, have to pour footers before you pour the fdn. walls, etc. It gets more involved once you are framed and have multi trades on site, it is a good idea to have reviewed the plans and the job to afford yourself some time up front to plan things out, so there is continuity of the work, making a transition from one trade to another without conflict, all jobs have it, best you can do is minimize it.

6.) Changes- you really need to be satisfied with the design, the more you change, and the later you change things, the more it will cost you, Always plan for future use, say when pouring a slab, an extra conduit or pipe stub up, or a hole in the foundation, for some future use, good to think in terms, well I may not be able to afford it now, but later I will, plan ahead for things you might want, could be anything, but it pays to coordinate into the job up front no matter what it is.

7.) Keep an eye on the job, stay in tune with what is going on, if there are problems, sort em out, if design related, get an R.F.I. (request for information) off to the architect/engineer, and document the results, cost add, cost delete or maybe its no additional cost, all part of the game, you don't want a pile of claims by a contractor at the end, this is why it is a good idea to have a well written and defined scope of work within the contract.

There's a lot more to cover than I can put here, if you have a good responsible contractor it is a big help, and what I have suggested may sound a bit regimented and strict, but sometimes it has to be done like that to insure the job goes well, I have seen numerous jobs that have gone sour in my career and owners who are taken by bad contractors. The contract should have a failure to perform clause and remedial action that can be taken, on big jobs contractors have to submit a performance bond, if they fail to perform they can be defaulted and the bonding company is liable to complete the building, your lending provider usually has stipulations for things like that, lot of people have been stuck with uncompleted buildings. The default process is a last resort, can be a drawn out process like any dispute resolution situation, but if that contractor ever goes out of business in the midst of construction, you need to be covered, more so on big jobs, though principle is the same for the smallest of jobs.


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