The Contractor Nightmare
You might be one of the fortunate people who had a flawless experience adding a room, building a second story or remodeling your kitchen. Thank goodness for your flawless experience, but there are lots of people, including myself, who have made some blundering errors with contractors and builds or just didn't do their homework in advance.
There are many types of construction contracts offered by general contractors. My advice is to read every word, and if you are not a lawyer, hire a lawyer to read the contract carefully.
A few areas to be most alert about are:
1. Is the contract a fixed, out-the-door contract, or is the amount your contractor is being paid a percentage of the building cost?
2. Is every cost specified and tied to your architectural drawings and your designer's selections? Alternatively, you may have only specified allowance amounts, but how do you know they are realistic? Allowances can be dangerous.
3. Is the builder fee also a percentage of your allowance amounts and your change order upgrade amounts?
4. Is there an absolute cap on the total project cost? Who pays any overages?
5. Is there a realistic contingency amount for unforeseen issues? What happens if costs come up beyond the contingency amount?
6. What happens, and who pays, if the city and building departments suddenly ask for a haul route, more engineering, more soil reinforcement, more grading, more structural enforcement, additional safety, erosion control, handicap considerations, inspection and re-inspection?
7. Are there penalties for delays? Are there escape clauses that allow the contractor to blame the city, weather conditions, acts of God, material delays, material defects or back orders?