Before proceeding with construction of your new home or remodeling project, you will need to prepare and sign a contract with your contractor. The purpose of the contract is to carefully identify the scope of work and the terms and conditions of construction. You also need to anticipate the variety of problems that can arise during the course of construction and carefully address their resolution. Just ask yourself "what could go wrong in terms of the contractors' performance or financial stability?" Then, make appropriate provisions in your agreement with the contractor.

The following are the most frequently asked questions for owners contemplating either new construction or remodeling projects.

Is there a standard form of agreement that would be in the best interest of an owner to sign?

There is no standard form of agreement, although the American Institute of Architects publishes a series of owner-contractor agreements which are both detailed and comprehensive. These agreements contemplate that the owner's architect will administer the contract, provide onsite observations, certify applications for payment, issue certificates of substantial completion, etc.

What is the difference between a contract and the project drawings and specifications?

The contract is a legal document. The project drawings and specifications are architectural documents. The contract simply refers to or incorporates the drawings and specifications by reference and obligates the contractor to proceed with the work in accordance with the drawings and specifications as referenced in the contract. The contract does not attempt to fully describe or detail the scope of work to be performed by the contractor. It simply identifies those particular drawings and specifications upon which the contractor has based their price and commitment to perform the work.

How should the contractor be paid?

There are different ways of compensating the contractor. The first way is agreeing to pay the contractor a fixed price for the work. The contractor submits a bid; there is some negotiation over the price; and a fixed dollar amount is agreed upon between the owner and the contractor. This amount will include the contractor's overhead and profit.

A second way of compensating the contractor is on a "cost-plus" basis where the contractor proceeds with the work, submits all of his bills and invoices to the owner. The owner reimburses the contractor for construction costs incurred by the contractor together with either a contractor's fee for supervision, overhead and profit, or a percentage mark-up on the contractor's costs for supervision, overhead and profit. Sometimes "cost plus" contracts have guaranteed maximum amounts beyond which the contractor agrees that the owner will not be responsible for cost reimbursement to the contractor.

How should payments be made to the contractor?

On projects taking less than thirty days, the contractor is typically paid a down payment with the balance due upon completion and acceptance by the owner. On projects taking more than thirty days, payment to the contractor generally involves progress payments made to the contractor each month based upon the progress and value of the contractor's work, with the final payment being made following completion of the work and the owner's acceptance.

If the owner is financing the project through a commercial lending institution, the lender will likely visit the site each month, certify the progress of the work, calculate the loan disbursement payable to the owner, and issue a check to the owner, which will then be signed over to the contractor.

What is retainage?

Retainage is a holdback from the progress payment and/or the final payment in an amount, generally about 5 percent of the contract price. The purpose of the retainage is to leave enough money in the contract for the owner to complete any uncorrected or uncompleted work in the event that the contractor fails to do so within a reasonable period of time.

Can the work be redesigned or altered after the contract is signed?

Once construction has begun, owners generally do request changes in the work. That's just human nature. The handling of these change orders needs to be addressed in the contract and is typically addressed with a provision that change orders need to be agreed upon in writing before the contractor proceeds with the work. The written change order should address issues of price increases or decreases and impacts on the construction schedule.

What is an allowance?

An allowance constitutes a dollar value of the contract price which has been set aside for the purpose of financing a distinct portion of the work, such as light fixtures, floor coverings, etc. For example, if the owner has not quite made up their mind about selection of floor covering, bathroom fixtures, or kitchen countertops, the contractor will plug a figure (i.e. an allowance) into the contract to allow for the labor and materials associated with installation. If it turns out that the owner selects bathroom fixtures costing more than the allowance, the owner is obligated to pay the contractor for the excess. And, of course, it works vice versa.

What kind of warranty should the owner request?

The owner should request a warranty from the contractor that states all work will be performed in a commercially reasonable manner and there will be no defects in the labor or materials furnished to the project by the contractor. The warranty should be for a period from one to six years, depending upon how much the owner is willing to pay for the warranty.

Typically, contractors will issue a one-year warranty. The owner should request the contractor to provide to the owner all written warranties for all manufactured or consumer products which are installed during the course of construction such as roofing materials, appliances, windows, heating and mechanical systems, etc.

Should the contract contain a liquidated damages clause?

Perhaps. A liquidated damages clause generally provides that the contractor must pay the owner a certain per diem dollar amount for each day of work beyond the scheduled completion date. For example, if a liquidated damages clause provided for a $50 per day per diem payment to the owner, and the contractor was 15 business days late in completing the work, then the contractor would be obligated to pay or refund $750 to the owner. Liquidated damages clauses are common and are usually associated with corollary clauses which provide a certain per diem bonus to the contractor in the event that he completes the work ahead of schedule. Liquidated damages clauses are useful when it is very important for the contractor to finish on a certain date for reasons such as the owner's prior residence both scheduled to close on or near that date, or the owners are scheduling their move into the new residence on a certain date, etc.

Are there certain clauses of special concern?

Yes. One clause typically found in contracts which should be of special concern to the owner is a clause that states that all prior negotiations, understandings, or agreements no matter what may have been discussed or agreed upon previously and orally with the contractor, are not part of the contract unless they are stated in writing within the terms of the contract.

Another clause that should especially concern the owner is a clause that provides the contractor is not responsible for unforeseen circumstances. This clause is very common in remodeling contracts. It means if the contractor encounters difficulties on the job which they did not anticipate, the owner may be required to pay an additional amount of money to the contractor to cover these unforeseen events.

A third clause that should be of particular concern to the owner is a clause in the contract which recites the contractor's registration number. In order to verify the contractor's registration and bonding status, the owner should call 800.647.0982 to verify:

• The registration status of the contractor;
• Inquire about prior claims against the contractor's bond, if any; and
• Make sure the contractor executes the contract under the same name in which they registered as a contractor with the Washington State Department of Labor and Industries.

B

Backfill

Earth or other material replaced in the space around a building wall that was removed during construction.

Beam

The principal horizontal wood or steel members of a building (also called girders).

---

C

Cantilever

A projecting beam or joist supported only at one end, used to support an extension of a structure.

Corner Bead

A strip of galvanized iron for protecting the corners of plastered walls.

---

D

Dormer

A projecting frame or minor gable in a pitched roof.

Drip Edge

L-shaped weather-resistant metal that is installed at exposed roof edges (eaves) to protect the roof's wooden parts from water damage.

---

F

Fascia

A decorative flat board or band used to cover joints between the wall and the eaves.

Felt Paper

A building paper infused with asphalt, used on exterior walls and roofs to insulate against heat, cold, and moisture.

Fill Insulation

Loose, granulated material which is applied by hand or blown into wall spaces mechanically to reduce the transfer of heat.

Flashing

Non-corrosive metal used for waterproofing around angles or junctions in roofs and exterior walls.

Footing

An enlarged concrete base on which a foundation or column sits.

Foundation

The lower support or base, typically below ground level, on which the structure is built.

---

G

Gable

The triangular part of the end of a structure, from cornice or eaves to ridge.

Grade

The level of the ground around a building.

---

H

Headers

A horizontal beam or over a door or window that provides support for the opening; a beam used to support free ends of floor joists, studs, or rafters.

Hip

The external intersection of two slopes of a roof.

---

L

Ledger

A horizontal piece of wood attached to a beam to support joists.

---

M

Moisture Barrier

Material used to keep dampness from passing into walls or floors—usually treated paper or plastic.

Mullion

The thin framing that divides the lights in a window or panes in a door.

---

P

Pitch

The angle or slope of a roof.

---

R

Rafter

One of a series of structural roof members used to support roof loads.

Reinforced Concrete

Concrete fortified with wire or metal bars.

Riser

The vertical piece of a stair step, running from tread to tread.

---

S

Slab

A thick, often reinforced, concrete floor laid in a single, unjointed piece on the interior of surrounding foundation walls (monolithic slabs join the pouring of foundation walls and floor into one pour).

Soffit

The visible underside of structural member of a building, including staircases, cornices, overhangs, or eaves.

Stringer

A long, horizontal member that connects uprights in a frame or supports a floor. Also one of the enclosed sides of a run of stairs supporting the treads and risers.

Studs

Vertical members—usually two-by-fours or two-by-sixes—to which horizontal pieces (plates) are nailed to frame walls.

---

T

Truss

A grouping of structural members, typically triangular, to form a rigid framework to span between load-bearing walls for supporting a roof.

---

W

Wall Sheathing

The first layer of exterior wall covering, usually sheets of plywood, gypsum board, or other material, nailed to the outside face of studs as a base for exterior siding.

Doing your homework will help you have a more successful experience

This weekend, Shannon took a moment to talk to our president, Joseph Irons of Irons Brothers Construction, at the Membership Appreciation Picnic at Remlinger Farms.

See more of our member benefits

Most of us know that it's a good idea to shore up our credit a few months before starting to house hunt and that it is smart to use a professional agent and get pre-approved for a loan. But there are questions many homebuyers don't think of asking—questions that often go unanswered during the exciting process of purchasing a new home. Here are a few of them:

What do you really want in a home?

You've already determined your price range and what neighborhoods are most convenient in terms of proximity to work and social activities. Make a list of amenities that are must-haves and stick to them. And remember, even if you don't plan on having children, the quality of the school district can affect resale values.

Find out how long a potential home has been on the market. A home that has been listed for six months or more is more likely to have an owner flexible on the asking price.

Has the home had problems selling?

Were there other offers that fell through? If so, find out why. It could be that the previous buyer had financing problems, but it could also be that something turned up in the home inspection, indicating a problem you might not want to deal with either.
What is the home's condition?

How old is the home and what condition is it in?

Remember that most sellers have done everything they can reasonably do to spruce up their home for sale. If you can see wear and tear on the house, it could be a red flag. Other red flags include signs of rust, mold, or water leaks.

How new are the essentials?

How new are some of the critical working parts of the home? If you aren't buying new, it's a good idea to find out how old the pipes are and what they are made of. You should also find out the age of the water heater (they typically only last about 10 years) and the furnace. If the appliances are being sold with the home, their age could be a factor as well.

What will your actual payment be?

In addition to the sales price, ask about any additional fees, such as association fees and property taxes. These monthly or yearly payments need to be factored into your potential overall monthly payment.

Have there been special assessments?

If you are considering a condo or townhome, be sure to find out if there has been a history of special assessments and why. It's important that your association has healthy reserves so that future repairs and maintenance won't require sudden and unexpected fees or special assessments that you would be required to pay.

Does anyone else have access?

Zoning and easement issues are often initially overlooked. Find out if there are any easements on the property, giving a third party certain rights. You'll want to know before you buy if a neighbor has the right to access a section of your property or if a utility company can place structures on your land.

Is noise an issue?

Finally, don't forget about the noise factor. Drive by on weekdays and weekends at varying times of the day to get a sense of what the neighbors are like and whether or not, for example, you can hear the high school band practicing at 6 a.m. If the home shares a wall with another residence. like a duplex or condo, make sure you visit when the neighbors are home so you know how much noise you will hear when you live there. The more you know about your future home, the more likely you are to have a haven that truly suits your lifestyle and your future plans.

Happy house hunting!

If you are shopping for a new home, how can you be sure that it was built so that it does not cause health or safety problems for you or the members of your household? Two words: building codes.

A building code sets forth requirements to protect public health, safety, and general welfare as they relate to construction and the occupancy of a building. These codes include specific requirements for building materials, fire protection, structural design, light and ventilation, heating and cooling, sanitary facilities, and energy conservation.

There is no national building code enforced by the federal government. Different areas of the country have different construction methods; the techniques used to build houses in a cold climate will be different than those used in a warm climate. Most construction in the United States is regulated at the local level. Only a few municipalities (mostly major cities) write and revise their own codes. Some states have mandatory statewide building codes.

Building homes is a complicated process, so building codes are often long and complicated. To prevent each local jurisdiction from having to develop its own complicated codes from scratch, there are several major model code organizations that draft codes that local areas can adopt.

The local area has total authority for adoption and enforcement. It may adopt a model code as is, adopt only specific portions, or add some of its own changes.

Code writing is a dynamic process, involving constant interaction between the public and private sectors of the construction industry. Federal, state, and local governments and individuals involved in code writing and revision represent the views of labor, management, manufacturers, and trade associations, contributing much time and technical expertise to the process.

Building codes do not deal with issues such as the quality of the workmanship and materials; consumers are protected in these areas through their warranties. For instance, if a building code inspector is examining a home and sees a gouge in a kitchen floor or counter top, that would not be an item affecting health or safety and, as such, would not be covered by a building code. However, it would be covered in the warranty on workmanship and materials.

This week, Shannon discusses the benefits of the Built Green® program with Leah Missik, Built Green program manager.

More about Built Green

These tried-and-true techniques from professional home stagers can help you sell your home quickly and bring in top dollar.

With home sales and home values on the rise, many homeowners who held out during the recession are now considering selling their homes. Staging a home is a way of putting your home's best foot forward, so to speak, and making sure the special features of your home are not hidden by clutter or outdated features.

Begin to think of "your" home as an item you want to sell and not the emotional center of your family life. Some experts even recommend that you picture yourself handing over the keys to the new owners. This exercise will help enable you to see the house itself, devoid of memories and allow you to be realistic about its true selling points and areas that might need work before putting it on the market.

Neutralize

Sellers often underestimate the importance of packing up all personal photographs and family heirlooms. If potential buyers see you and your family all over the house it will be hard for them to visualize themselves in "your" home. They need to be able to picture the personal touches they would make and imagine their own photos on the walls. The goal is for each potential buyer to see the house as their dream home and not your former dream home.

If you love bold wall colors, consider giving the walls a fresh coat of paint in a neutral color. You don't want to lose a buyer because of the dramatic burgundy dining room walls you love so much.

Pare Down

Most of us amass an amazing amount of treasures or junk, depending on your point of view. Experts all agree it is essential to declutter. Remove all books from bookcases and store the bookcases if you can. Pack away your knickknacks. Remove everything from kitchen counters, except for fresh flowers or a plant. You can put items used daily in a special place in one of the cabinets or drawers so they are convenient but out of sight.

The upside? You'll have a head start on packing for your new home. And remember, buyers love to snoop and will open closets, cupboards, and cabinets. Make sure you have no personal items in view and make sure everything is organized and tidy—it sends the message that the house has been well cared for.

Also consider renting a storage space so you can show your house with as little furniture as possible. It makes the space seem larger and helps potential buyers imagine their own furniture and decorations in that space. Don't have any furniture blocking a walkway. Remove extra leaves from a dining room table and attempt to leave just enough furniture to show how the room can be used.

Replace Favorite Items

If you love your window coverings, fixtures, or appliances and plan to take them with you, take them down now and replace them with something you can leave with the house. If a potential buyer never sees your favorite things, they are much less likely to want them included in the purchase price.

Fix Defects

Make all the minor repairs you can. This includes patching holes in walls, fixing leaky faucets, replacing cracked floor or counter tiles, and replacing burned out light bulbs.

And of course it goes without saying that you should keep your house spotless inside and out with freshly washed windows, sparkling bathrooms, a squeaky-clean refrigerator, and polished faucets and mirrors.

Stand outside the house and look at it objectively. Does it have curb appeal? Has the lawn been mowed and are the bushes trimmed? Is the house number clearly visible? Then go inside and try to imagine yourself as a potential buyer. If you find it appealing, so will the right buyer.

Shannon, on-site at last weekend's team build in Renton, talks with Andy from Habitat for Humanity on affordable housing and the importance of being Built Green.

More about our community stewardship

FOR IMMEDIATE RELEASE
Media Contact:
Sharon Couts
Master Builders Association of King and Snohomish Counties
425.499.1723

Bellevue, Wash—June 22, 2016—The Master Builders Association of King and Snohomish Counties and Regence BlueShield will volunteer for Habitat for Humanity Seattle-King County's "La Fortuna" townhome community in Renton, a 3-Star Built Green® property. Volunteers will focus on unmasking floors, installing appliances, painting, and cleaning in preparation for the homeowner dedication on July 16, 2016. At that time, eight low-income families will receive the keys to their new homes and a better future.

La Fortuna residents will include U.S. military veterans, Americans who were once refugees from war-torn countries, and others who came to our region in search of a better life for their families. The future homeowners have worked together as friends and neighbors to help build and create this community.

Habitat for Humanity's vision of creating "a world where everyone has a decent place to live" is shared by the Master Builders Association of King and Snohomish Counties and Regence BlueShield. This vision, and the idea that affordable housing should be accessible to all families—including low-income, middle class, and those struggling with homelessness—has led Regence and the MBA to form ongoing partnerships with this organization.

Schedule—Wednesday, June 22, 8:45 a.m. to 1 p.m.

• 8:45 a.m.: Check-in. Distribute protective equipment.
• 9:00 a.m.: Safety orientation, description of work assignments.
• 9:15 a.m.: Work under the instruction of Habitat site staff.
• 12:45 p.m.: Cleanup
• Location: Habitat for Humanity Seattle-King County's La Fortuna New Construction community in Renton, 17286 127th Ave. SE, Renton, WA 98058

 

---

About Habitat for Humanity Seattle-King County

Habitat for Humanity SKC is an affiliate of Habitat for Humanity International, a nonprofit housing organization that brings people together to build homes, communities, and hope. Habitat SKC is dedicated to eliminating substandard housing through constructing, renovating, and preserving affordable homes, and by providing training and access to resources to help families improve their shelter conditions. Habitat SKC builds more than houses—we transform local communities. Habitat SKC has built renovated or repaired more than 450 homes for local families in need. For more information or to get involved, visit habitatskc.org or follow us on facebook.com/habitatskc or twitter.com/habitatskc.

About Regence BlueShield

Regence BlueShield has been serving Washingtonians in select counties for nearly a century and now provides more than 1.1 million members with comprehensive health insurance solutions. As a nonprofit independent licensee of the Blue Cross and Blue Shield Association, Regence is part of a family of companies dedicated to transforming health care by delivering innovative products and services that change the way consumers nationwide experience health care. For more information, please visit regence.com, facebook.com/regenceblueshieldwa or twitter.com/regencewa.

About the Master Builders Association

Founded in 1909, the Master Builders Association of King and Snohomish Counties (MBA) has grown to become the largest residential homebuilders association in the United States. With 2,800 member companies, the association is dedicated to membership value, government advocacy, financial stewardship, and promoting the residential building industry in the Puget Sound region. The association and its members address many of the concerns and issues affecting the residential housing industry. If you are looking to buy, build, remodel, or maintain your home, trust MBA for industry professional referrals and practical information to get the job done. mbaks.com

###