Massachusetts Builders Blog

I have posted on this issue before, but when I was at a BAGB (Builders Association of Greater Boston) meeting the other day, contractors where talking about how difficult it is to present homeowners with a contract, and how they worry about scaring them off with something too long or complicated. I am sympathetic to that issue, and understand that contracts make people uncomfortable. What I try to emphasize with both homeowners and contractors is that 1) the law requires a written contract for renovation work over $1000; and 2) a contract reflects a "meeting of the minds." The contract is the most important part of preparing for a renovation or new construction project because it helps the contractor manage expectations with the homeowner. Discussing the contract terms requires the homeowner and contractor further define the scope of the project and set a realistic payment schedule. It lets the homeowner know what is included and which additions would require a change ord...

Over the past couple of weeks I have started learning about the new lead paint law that is going into effect on April 22, 2010. Contractors who do renovation work on pre-1978 houses will have to obtain certification in lead containment procedures. If they do not comply with the law, the penalties are stiff: I have heard that they range from $32,000 to $37,000. So, I am doing everything I can to get up to speed on the law as quickly as possible, and organizations like BAGB (Builders Association of Greater Boston), HBAM (Home Builders Association of Massachusetts) and NARI (National Association of the Remodeling Industry) are running meetings and trainings to prepare for this change in the law. As a lawyer, it is my job to anticipate where the legal issues will arise when this law is implemented. So far, I see the following: 1. Contracts with homeowners will have to spell out the requirements and protect the contractors from liability as much as possible. 2. Contracts with subcontrac...

Statistics keep supporting the fact that green construction is up, even though the construction industry has been hit hard by the economy. If you aren't learning about green construction, you should be. http://content.usatoday.com/communities/greenhouse/post/2009/12/green-home-sector-booms-despite-housing-slump/1

Send me your residential renovation or new construction contracts (residential or commercial). After signing an engagement letter, I will review your contracts for free! If I don't find five things that might hurt your business, I will donate $50.00 to charity. If I do, you agree to donate $50.00 to charity. That's it. No strings attached. You do have to let me explain my recommendations to you; preferably in person.

Conclusion More risk in green construction Maintain excellent communication with your clients Allocate risk and responsibility in your contract. Keep apprised of developments in state and local law. Maintain familiarity with available rebates.

Suppliers Only choose reputable suppliers Include disclaimers if consumers or designer insists on an unfamiliar product. Make sure you acquire all necessary documentation for installation, warranties and rebates. Make sure proper installation procedures are followed.

Designers: Allocate liability between builder and designer as clearly as possible Reserve right to trump designer if not feasible or in violation of local laws or building codes. Consider whether designer will remain involved throughout the project. Request indemnity clause. They will pay the builder back if they are held liable.

Subcontractors: Include indemnity clauses for their role in the installation Require lien waivers when work is complete and subs have been paid. Make sure your subs are well versed in the installation of the “green” product. Provide them with manufacturer’s documentation in order to ensure warranty.

1. Contract with Consumer Include type of certification sought and appendix with all requirements. Have consumer initial all pages and sign off. Do not promise what you can’t deliver. Installation is on builder but can have indemnity agreement with subcontractor. Failure to install properly can invalidate manufacturer’s warranties. Designate who is responsible for rebates Can always provide a warranty for your workmanship. Include suggested guidelines for performance, but do not guarantee performance. Spell out homeowner’s responsibilities to ensure performance. Include change orders for a greater than ten percent increase in the cost of materials. Include the right to substitute like materials if a given item is no longer available.

The Contract is your most important protection against risk. Cover all potential areas of risk in your contract. Types of contracts i. Builder/Owner ii. Builder/Designer iii. Builder/Subcontractor iv. Builder/Supplier

1. Performance Avoid guarantees if possible. Allocate risk amongst builders, subcontractors, suppliers and owners. Account for regional variations Only pass on manufacturer’s warranties Discuss maintenance responsibilities