September 7, 2024 Homeworks Hawaii, Planning, Permitting
The contract between a homeowner and general contractor is unlike any other. Homeworks Construction, a Design-Build company that has operated on Oahu for 30 years, shares what every homeowner should understand about how construction contracts serve the homeowner and contractor. Understanding a construction contract is easy if you know what the key elements are.
Between an Owner & Contractor: The Basics
A construction contract is between two parties, the homeowner and the contractor and does not include the designers, architects, suppliers, or anyone else who may be consulted or provide service on a project. “At its core, a construction contract defines the roles and responsibilities of the owner and the contractor without any overlap or voids,” states Homeworks President, Marshall Hickox.
The Basics of a Construction Contract from Drawings to Changes
Every construction contract should generally include the agreement, general conditions, drawings, notice to proceed, and performance and payment bonds. Additionally, the contract includes change orders or modifications. “If the homeowner and contractor agreed to changes that are not written in the contract, do not move forward. Anything agreed to verbally should be documented and added to the agreement,” emphasized Hickox.
Understanding a Construction Contract: Contractor Responsibilities
“No matter who the owner chooses for the job, the contractor is responsible for the labor, materials, tools, water, transportation, and utilities that are required to do the work,” says Hickox. The contractor has a duty to inform the homeowner of the impact that requested changes make to both cost and timeline. Any materials used should be of good quality or new, unless otherwise agreed to by both parties. “Sometimes an owner may want to incorporate an element from their old home into their new one because they cherish the memories associated with it. We are happy to do that for our customers! But, a contractor should not use damaged or used materials without clearly writing that in the contract,” says Hickox. Lastly, the contractor should also provide a warranty for the work performed, a lump sum cost, and payment terms with schedule.
Understanding a Construction Contract: Owner Responsibilities
The owner’s responsibility begins with communicating the requirements of the project. What the owner expects at the end of the job should be in the agreement, for example a remodeled kitchen. The owner is required to provide any information about the property that the contractor should know. This includes any hazards, challenges to property access, environmental concerns, and even flooding and drainage issues. “The owner typically provides or pays land surveyors, geo-technical engineers, or other specialists needed for the project. Homeworks can advise and identify specialists as needed. However, it is the homeowners responsibility to pay for these additional services,” adds Hickox.
While all good contractors maintain insurance, that insurance doesn’t replace the property insurance held by the owner. The owner is still required to maintain regular insurance coverage throughout the project. If other consents, easements or approvals are required for construction to begin, that responsibility sits with the owners, as well.
Homeworks Construction advises homeowners to read and review their construction contract carefully. Ask questions, and get a second opinion when possible. A construction contract is meant to clearly define the roles and responsibilities of both the contractor and homeowner, while providing a scope of work, timeline, cost, budget items, terms for cancellation, payment schedule, and changes. If you are thinking about remodeling, building a new home, addition, or ADU, contact Homeworks Construction for a free consultation.