Custom Home Construction
THE IMPORTANCE OF CHECKING REFERENCES
Many custom builders come from non-construction backgrounds and have learned construction on the job as coordinators/supervisors of the construction project. Their areas of expertise often involve some type of financial or accounting experience. Rarely, do they actually perform any work, other than having one or two employees who perform punchlist work or clean up the construction site on a daily basis. Other Contractors were superintendents or project managers for national builders or large custom contractors and have little or no formal education or financial/accounting background. Most custom home Contractors have little or no staff to keep up with the paperwork requirements of the Contract. Few have formal relationships with attorneys. Many Contractors view attorneys as necessary evils.
What these factors underscore is the absolute necessity of the Owner checking the references of the Contractor from the standpoint of communication, integrity, timely payment of subcontractors and suppliers, timely performance of the work and willingness to perform warranty work. The fact that the Contractor is not personally performing the work emphasizes the importance of making sure that the subcontractors who have performed work on the specific projects which the Owner reviewed will be performing work on the Owner’s project. Section 53.256 of the Texas Property Code requiring the Contractor to furnish a written list of Subcontractors and Suppliers to the Owner helps in this regard. The fact that the Contractor may not have regular counsel or tells the Owner that he or she will not accept any revisions to the GHBA Contract or Contractor’s form contract should not deter Owner’s counsel from suggesting reasonable changes. I have found that even when an Addendum to a GHBA Contract is longer than the GHBA Contract itself, it I can persuade the Contractor to carefully review the Contract, 60-70% of my proposed revisions are usually acceptable, regardless of whether the Contractor has an attorney review the Addendum. My Owner clients often offer to pay the Contractor’s attorney’s fees up to $1,000- $1,500 to afford the Contractor the opportunity to have qualified counsel review the Contract. Since the primary purpose of revisions to the Builder’s Contract is to outline a set of working rules and procedures, it is clearly beneficial to both parties that there be a clear and complete understanding of the requirements of the Contract at the inception of the project.
One of the most important factors the client needs to consider in selecting a Contractor is the priority that the Contractor will give to your client’s project, which is dependent upon the size of the Contractor and how many other projects are on-going or currently planned during the time period, as Stephen Paxson’s outline indicates, most Owners expect the Contractor to treat them as their highest priority and understanding the Contractor’s schedule can go a long way to solving problems or determining that this Contractor is simply to busy to satisfy your client’s expectations.
Custom Home Construction…
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