Dennis Dixon, a builder and consultant based in Flagstaff, Ariz., has spent 30 years developing, with his attorney, a model contract that’s clear and comprehensive. Each item on the sheet below should have its own paragraph in the contract. There also should be separate addenda for allowances, options, warranties, and especially specifications. Take time to list specs by category, so that the client knows what products are included in the deal.
“Once you have a contract and the addenda in place, any new paperwork for a project can be edited and completed quickly,” Dixon says. “My advice: If you can’t execute an ‘A Grade’ contract and specs, don’t do the project. Without it, all the liability and risk is placed on you.
A. Who’s in Charge?
Name your contact personnel; usually it’s the owner and the job superintendent. This eliminates problems later when the owner says “I told your brick mason about the fireplace deletion last week. Didn’t he tell you?”
B. Change Orders
“Never, ever, ever proceed without a signature,” consultant Dennis Dixon declares, though he does agree that the signed document can be as simple as a few words on the back of an envelope. But the key here is: No paperwork, no payment.
C. Payment Schedule
Schedule weekly payments and the work percentages (e.g., framing 50% complete, rough plumbing 100% complete) for that week. Do not ask for 1/3 down, 1/3 during progress, and 1/3 at completion. The maximum you should be owed at completion is 10%.