Washington Cost Plus Residential Design-Build Contract
Overview of this form
The Cost Plus Residential Design-Build Contract is a legal document that outlines the agreement between an owner and a design-builder where the owner pays for all project expenses plus a fee for the construction and design services. Unlike fixed-price contracts, this form allows for flexibility in project costs based on actual expenses incurred, ensuring that the design-builder is compensated for all actual expenditures while providing a profit margin. This form is specifically designed for residential projects, accommodating both construction and design parameters set by the owner.
Key parts of this document
- Relationship Between the Parties: Defines the obligations of the owner and design-builder, including the provision of design criteria.
- Cost-Plus Structure: Details how actual project costs will be calculated and the fees charged by the design-builder.
- Payment Terms: Includes down payment, progress payments, final payment, and retainage provisions to protect both parties.
- Permitting and Approvals: Identifies who is responsible for obtaining necessary permits for the project.
- Change Orders: Outlines how any changes to the work will be documented and agreed upon by both parties.
- Warranty: Specifies the warranty provided by the design-builder for construction work and design services.
Situations where this form applies
This form should be used when an owner hires a design-builder for a residential construction project and prefers a cost-plus arrangement. Scenarios that may warrant use of this contract include renovating or building a new single-family home, adapting designs based on specific owner criteria, and projects where the total costs may vary due to fluctuating material or labor expenses.
Who this form is for
- Homeowners seeking to build or renovate their residences with professional design and construction services.
- Design-builders who provide comprehensive services including design and construction, and prefer a cost-plus payment structure.
- Property developers who seek flexibility in budget management while ensuring quality work.
How to complete this form
- Identify the parties: Clearly state the names and contact information of the owner and design-builder.
- Specify the property: Include the address and tax parcel number where construction will take place.
- Enter costs: Fill out the estimated project costs and the percentage fee for the design-builder's services.
- Detail payment terms: Outline down payment, progress payment schedules, retainage amounts, and final payment conditions.
- Sign and date: Ensure both parties sign the contract and provide the necessary contact details as indicated.
Notarization guidance
This form does not typically require notarization unless specified by local law. It is advisable to consult with a legal professional if you are unclear about specific requirements.
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Make edits, fill in missing information, and update formatting in US Legal Forms—just like you would in MS Word.
Download a copy, print it, send it by email, or mail it via USPS—whatever works best for your next step.
Sign and collect signatures with our SignNow integration. Send to multiple recipients, set reminders, and more. Go Premium to unlock E-Sign.
If this form requires notarization, complete it online through a secure video call—no need to meet a notary in person or wait for an appointment.
We protect your documents and personal data by following strict security and privacy standards.
Mistakes to watch out for
- Failing to provide complete and accurate design criteria, which may lead to misunderstandings.
- Not clearly defining reimbursable costs, resulting in disputes over payments.
- Neglecting to document change orders properly, which can complicate project scope and costs.
- Ignoring permit requirements, which can lead to legal complications or fines.
Why complete this form online
- Convenience: Download the contract forms instantly and fill them out at your convenience.
- Editability: Customize sections to meet specific project needs and requirements.
- Reliability: Ensure the form is drafted by licensed attorneys to meet legal standards and protect both parties.
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FAQ
What Is Included in a Cost-Plus Contract? A cost-plus contract includes payment for all expenses incurred during a construction project plus a pre-specified amount that the contractor is paid at the end of the project.
Who pays for those mistakes? The owner doesn't want to because it's not the owner's fault. But mistakes and rework are just part of the costs. In a cost-plus contract the owner agrees to pay the costs.
Budget: A fixed-price contract is just that: fixed. The agreed-on price at the beginning of the project is the price at the end. Conversely, a cost-plus contract estimates a project's costs but doesn't set the final price until the project is completed.
plusfixedfee contract is a costreimbursement contract that provides for payment to the contractor of a negotiated fee that is fixed at the inception of the contract. The fixed fee does not vary with actual cost, but may be adjusted as a result of changes in the work to be performed under the contract.
Expenses may also include overhead, like research and development costs necessary to meet contractual goals. However, estimating errors, mistakes and costs incurred due to negligence are not covered in most cost-plus contracts.
The contractor submits an invoice to the client that reflects the actual costs incurred during the project plus the agreed-upon profit margin. For example, the construction company submits an invoice to the client for $270,000, reflecting the actual costs of $225,000 plus a 20% profit margin of $45,000.
There are three major components of a Cost-plus contract: Direct Cost:- Direct Cost. Such costs can be determined by identifying the expenditure on cost objects.Overhead Cost:- Overhead Cost.Profit:- Usually, this is a fixed percentage amount calculated on the project's cost.
plus contract is a construction agreement that requires reimbursement for project costs as well as a markup that covers the contractor's overhead and profit.
