Tag Archives: building contracts

Contracts Are Boring…Until You Go To Court

I have one goal – for people to end up with structurally sound buildings they love. Follow these guidelines and you are far more likely to love your new building.

Your work starts before you sign a contract.





Failure to accept these four statements will set you up for grave disappointment.

Buy Materials Yourself

Contractors generally have no qualms about using leftover materials from prior jobs, or purchasing cheaper materials than specified. If you seriously are concerned about material quality, take control yourself. Be aware, when contractors purchase materials for your building, they will mark them up. Paying for materials yourself assures you of not having liens against your property for bills your contractor did not pay.

It is very important you make decisions on exact materials you use for your building. With each type of material, there is a high end product, low end product, and something middle grade. Educate yourself on differences between each type of material, so you can choose based on your needs. If you allow a contractor to make any of these choices for you, they can really screw you over. Picking the right materials can make a huge difference.  If a contractor picks wrong materials, things are bound to go wrong.

Only Use Engineer Sealed Plans Specific to Your Building

Your building provider or contractor may have decades of experience, but unless he or she has initials “P.E.” (Professional Engineer) after his or her name, he or she is not qualified to make structural decisions. Have any deviations from plans reviewed and approved by your building’s engineer.

A building provider or contractor who sluffs off values of a fully engineered building plan does not have your best interests at heart.

Do Not Agree to a “Gentleman’s Agreement”

Always, always, always put your agreement with a building provider and/or contractor in writing. Having everything in writing has nothing to do with trust. It helps ensure everyone remembers what agreed upon terms are.  Months later you do not want to start arguing over what was originally agreed to. Contracts should be very detailed, including all expectations for both parties. 

Read the contract thoroughly, including all terms and conditions.

Keep in mind a good contract is written to provide clear communication between two parties.  It also protects both parties, and should never be “one sided”.  From my years as a general contractor, a well thought and spelled out contract (in writing) made for smoothest projects. 

Before agreeing to any work (as well as making any payment), require a written proposal describing in plain language what materials will be provided and/or work will be done. Do not sign a contract you do not fully understand. If anything makes little or no sense, ask for a written explanation. Still feel dazed and confused, or not getting what you feel are straight answers? Pay a one-time fee so a lawyer can walk you through what, exactly, it says and alert you to vague language. Terms such as “Industry Standard” have no real definition.

A total price should be as inclusive as possible. Any unforeseeable work or unit prices should be clearly addressed (like what happens if holes are difficult to dig). Maintain all paperwork, plans and permits when the job is done, for future reference.

Familiarize yourself with contract terms.

Proposals and contracts should contain specific terms and conditions. As with any contract, such terms spell out obligations of both parties, and should be read carefully. Be wary of extremely short or vaguely worded contracts. A well written contract should address all possibilities and may very well take more than one page.

If hiring a contractor, do not pay in full until all work is completed and lien releases provided from any and all material suppliers.

A statement regarding compliance with applicable Building Codes should be included, as well as what Code and version is being used and all applicable loading criteria. If the contractor is doing building permit acquisition, it should be stated in writing and a permit should be provided prior to work starting.

Hiring a contractor? Then, standards for workmanship should be clearly specified. For post-frame buildings this would be Construction Tolerance Standards for Post-Frame Buildings (ASAE Paper 984002) and Metal Panel and Trim Installation Tolerances (ASAE Paper 054117). Depending upon scope of work, other standards may apply such as ACI (American Concrete Institute) 318, ACI Concrete Manual and APA guidelines (American Plywood Association).

Articles to follow will cover specific terms of contracts and why they are important.

Stay tuned….

Good Fences Make Good Neighbors

Good Fences Make Good Neighbors

Robert Frost’s 1914 poem Mending Wall began this proverb.

Good fences do indeed help make good neighbors. A good fence is a line of mutual respect and understanding with minimal ambiguities. A good fence is a mutually-agreed upon boundary, with implied and explicit responsibilities for both sides to maintain and respect those boundaries. A good fence shows no partiality. And building a good fence creates a sanctity marking every human boundary, physical or psychological, of stones and mortar, or simply an invisible line in the sand.

When it comes to investing in a building (whether a kit or constructed) , a good contract makes for a happy outcome for all involved.

Contracts, when done properly, should simply define those relationships between a business and anyone they work with. A contract documents expectations each party has, and how each party sees this transaction playing out. It does protect a business but also protects the party they are contracting with. Here are five primary objectives for every good contract. 

  1. Be clear. Robert Frost used this saying to represent unnatural separation, in his poem Mending Wall, but separation and clarity of parties in contracts are good. Both parties need to recognize they are separate entities and have their own motivations, considerations, and gains in a contract. By ensuring clarity of each party’s wants, there can be no confusion as to who is to do what in a contract. 

2.   Be certain. In contracts, all parties should be certain of an outcome no matter what direction parties take. Should everything go smoothly and both parties perform, both parties should know exactly what they are getting. If there is an issue with one party’s performance, steps to fix or resolve this issue should be laid out in no uncertain terms.

3.   Be complete, a contract should answer all questions about any transaction and stand by itself (meaning there needs to be no clarification). If there is an unresolvable dispute, a court will only consider what a contract says, not what each party verbally understood or agreed to outside of a written contract. 

4.   Be easily understood. A contract should be drafted so laypeople can clearly            understand expectations and will not lead to confusion. Remember, if there is a dispute, a court or arbitrator with no technical background and no knowledge of this transaction is deciding your fate. 

5.   Like any relationship, contracts open each party up to risk. But also, like any          relationship, a party can gain nothing if they are too afraid of taking a risk of getting hurt. Contracts can attempt to reduce this risk, but a party contracting only to reduce their own risk is not one inspiring confidence. Instead, contracts should foster a trusting relationship. Be open about intentions, clear on requests or needs, and do not make assumptions. By fostering trust, a contract is nothing to fear.

Investing in a building without a contract (or with a minimal one) puts both parties at risk. In following articles I will endeavor to reduce risks for both new building owners as well as their providers/contractors.

Borrowing for a D-I-Y Barndominium

Hansen Pole Buildings GuesthouseBarndominiums, shouses and post frame homes all fit into a similar category to me. This category heading would be titled, “Living in a Post Frame Building”, although other construction types may be used, post frame is going to give most bang for your investment.

What if you want to D-I-Y construct your own post frame barndominium, but need to borrow in order to build?

Only once have I ever gotten a construction loan for myself and then I happened to be an experienced General Contractor with a successful track record. It was also through a bank we did most of our commercial banking with and we had far more money in our account then what our construction loan was for.

Most new D-I-Y barndominium folks are not experienced General Contractors. Things could be somewhat more challenging if you fall into this category. Even with a high credit score and significant down payment, most lenders doing construction to permanent loans require a full plan, timelines, etc., and only pay out when certain milestones are met.

I am all for people doing it themselves. I see far too many horror stories from people who have hired contractors. Thankfully lots of happy stories from clients who did it themselves. If you are going to be your own General Contractor here are some things to keep in mind:

If hiring a sub-contractor to do any work get it not only in writing, but also with a contract covering all possible bases. Great contracts make great friends. Do not expect any contractor to perform more than exactly what is spelled out in writing.

Have good insurance. We live in a litigious society and there are too many people who avoid taking responsibility for their own actions. Don’t have your dream home train derailed due to an uninsured or under-insured construction project.

Pay people. Whether out of pocket or from construction loans – pay vendors and subcontractors promptly, provided they perform as anticipated. Take advantage of prompt or early pay discounts from vendors with a track record of reliability.