This form is a Construction Contract. The form contains the following subjects: scope of work, work site, and insurance. The contractor's warranty is limited to defects in workmanship within the scope of the work performed by the contractor.
What is a Construction contract agreement?
If you’re planning to build, renovate or reconstruct your house, you will need to enter into a contract for home construction with the building contractor, defining your mutual rights and responsibilities. This agreement contains project specifics, the contractor’s license and insurance details, the requested scope of work, etc. It may also determine the potential lien on the property should the work not be paid in full.
Types of construction contracts
Depending on the payment arrangements determined by parties, there are four basic types of home builders’ contracts:
1. Fixed price (or lump-sum) agreements set the price for the completed job right from the start. Although fixed, the document may also include provisions defining penalties (for example, if the constructor fails to finish the work on schedule).
2. Cost plus construction agreements set the price for the finished work based on building materials and labor with additionally mentioned “plus” (a percentage of the total costs or a fixed fee).
3. Time and material agreements set the price for the work without a “plus,” but the client pays the contractor a daily or hourly rate while they are under contract.
4. Unit-price agreements are standard in bidding, particularly for federal building projects. Both owner and contractor define the price that the contractor charges for a standard unit without any specific extra fees for other units.
The first two types of contract for home construction mentioned are the most popular ones. Let’s take a closer look at them.
Fixed price vs. cost-plus contract benefits
The fixed price agreement benefits owners more than builders, as it determines at the moment the parties seal the deal the exact price the contractor will get after they complete all the work. Builders risk not getting the estimated profits they initially anticipated, as expenses may increase significantly but remain the constructor’s responsibility.
The cost-plus construction deal contains the evaluation of the final project cost; however, it doesn’t determine the final contract price until the contractor completes all the work. Unlike the fixed-price agreement, it separates expenses and sets the profit rate (as a percentage of the final project cost or as a flat amount), so contractors prefer this type of agreement; it is riskier for homeowners.
Information you should provide in the construction contract agreement
The presented Construction Contract for Home is a universal multi-state construction contract template. This sample describes typical terms for a home building contract. Download a printable document version from our website or amend and fill it out online. Make sure to provide the following information:
• Name and contact details of the contractor and their license number;
• Name and contact details of the homeowner;
• Property legal description from county clerk’s records;
• Project description with blueprints and building specifications;
• Scope, description of work, and its estimated final dates;
• Costs of work and responsibilities of parties for any breach of contract.
New Home Construction Contract Template with BCC: A Comprehensive Guide In the realm of new home construction, having a well-drafted contract is crucial to ensure a smooth and successful project. The Queensland Building and Construction Commission (BCC) is an authority that regulates the building industry in Queensland, Australia. They provide standard contract templates that can be used by homeowners and builders to establish clear terms and obligations. Here, we will explore the various types of new home construction contract templates with BCC, their importance, and some key elements to consider. 1. BCC Domestic Building Contract (Cost Plus): This type of contract template is designed for home constructions where the builder is to be paid for the cost of completed work plus an agreed-upon margin or percentage. It clearly outlines the procedures for variations, payment milestones, and dispute resolution methods. BCC recommends this template when the build costs are uncertain or likely to change during construction. 2. BCC Domestic Building Contract (Lump Sum): This template is suitable for projects with a predetermined fixed price. It clearly defines the scope of work, materials to be used, and any additional requirements or special conditions. BCC advises using this contract when the build costs can be determined and predicted accurately. 3. BCC Domestic Building Contract (Small Scale Renovation): This specific contract template is designed for minor home renovations, repairs, or alterations. It covers areas like the scope of work, licensing requirements, insurance obligations, and warranties. It is ideal for projects with a limited scope that can be completed within a shorter timeframe. 4. BCC Domestic Subcontract Agreement: This template is used when a subcontractor is engaged for a specific task or trade within a larger new home construction project. It outlines the rights and obligations of the subcontractor, the homeowner, and the principal contractor. This contract template includes sections on insurances, variations, and payment terms. It is essential to choose the right contract template based on the construction project's nature, scope, and complexity. A QBCC-approved contract provides protective measures and a legal framework for both parties involved, ensuring transparency and fairness throughout the process. Key Elements to Consider in a New Home Construction Contract Template with BCC: 1. Identification of the parties involved, including full names, addresses, and contact details of the homeowner and the builder. 2. Detailed description of the project, specifying plans, drawings, materials, and any specific requirements. 3. Scope of work, clearly outlining what is included, excluded, and any potential variations. 4. Payment terms, milestones, and methods, including allowances for progress payments and retention amounts. 5. Timeframes for completion, including penalties and extensions in case of delays caused by either party. 6. Dispute resolution processes, including mediation, arbitration, or QBCC-approved dispute resolution services. 7. Insurance and warranty provisions for both parties, mentioning any BCC requirements or additional policies. 8. QBCC-specific clauses and statutory requirements that address compliance with building codes, standards, and regulations. 9. Signatures of both parties, indicating their consent and understanding of the terms outlined within the contract. In summary, a new home construction contract template with BCC is a vital tool for establishing clear expectations, rights, and responsibilities between homeowners and builders. By utilizing QBCC-approved templates, one can ensure compliance with industry regulations and create a solid foundation for a successful construction project. Choosing the right contract type based on the project's nature is essential for a fair and transparent agreement.
