Robert Adamo, principal of Elevated Structures, LLC, was a chosen lecturer by the Director of Community Affairs of Monmouth County New Jersey for his expertise in the home building industry. He was asked to speak to the many displaced and devastated residents along with experts from FEMA, the Small Business Administration, and the New Jersey Division of Consumer Affairs. Robert explained the importance of choosing the proper design professionals and how to choose a competent builder. He also discussed and clarified building permit information and the proper items to include in building contracts.
What To Look For In Your Builder
This is a very stressful time for many homeowners and there’s quite a bit at stake given the comfort and security a home provides. The following list is meant to be a review of the building process and a primer to get you started and thinking in a productive manner.
Our main message is to take the time to research your builder.
Think of it this way, when you purchased your last refrigerator, we doubt you simply walked into a showroom and pointed to the first unit you saw. You probably spoke to your neighbors and family, took time to research popular models, looked for consumer ratings and possibly more.
Conduct a proper background investigation and research
The process begins with a conversation.
If they are a reputable builder, they will want you to know their credentials. The Home Builder’s Association (HBA) will be able to tell you if the builder has any complaints against him or if he has been involved in any contractor related legal actions.
Ask for references and then talk to them. Ask questions like:
- Did the builder stay on budget?
- Was the builder helpful with materials, finishes, recommendations?
- Did the builder stay within the projected completion time range?
- Did the builder return calls quickly?
- When problems arose, how quickly was the builder able to respond to them satisfactorily?
- How long have they been working with the same trades?
- Have they won any awards?
- What do they feel they excel at?
Choose the right builder for your job – Conduct a Job Interview
Not every project needs the same kind of a builder. Consider your needs. Are you looking for a one man artisan who pays attention to every detail in your home? Or is it important to you that your home be built on a tight schedule and problems and challenges are addressed quickly and efficiently?
Assess your needs by asking yourself these questions:
- How much time do I have to invest in the renovation process?
- How much research am I you able to do for the products and finishes?
- How much time do I have to select the material finishes?
- How much guidance are you prepared to offer your builder in how you want your home re-built or repaired.
- Are they familiar with the flood insurance process? Are they willing to work side-by-side with the adjuster and address any issues that may arise with the adjusters claim adjustment?
- The contractor will be responsible for executing documents to get permits, deliver the permits, schedule and attend inspections, and be responsible for delivering a certificate of occupancy.
- We believe it’s very important that you and your prospective contractor walk the job together. This should enable a better understanding of the work and perhaps some insight as to how the contractor views the work.
Choose a builder you like and trust
Signing with a builder is a big commitment. If you discover halfway through the construction of your new home that you don’t like your builder, or he is too busy to ever get back to you, it is a difficult mistake to undo. If everything else checks out with the builder, go with your instincts. Do you feel you can trust him? Do you think you will enjoy working with this builder/firm for the next three, six, or more months?
If not, find someone else before it’s too late. Don’t add to your problems by dragging the baggage of a poor working relationship with your builder.
Get it in writing
Get your estimate in writing. Have the builder specify what is included in the price. Ask the builder for his allowance amounts for things like lighting fixtures, flooring, and cabinetry. Then pay a visit with his suppliers or go online and see if those allowances are realistic. Just how much you can get for that price? Some builders will put in lower amounts for their allowances because it makes the bid price look lower. But what you don’t pay for up front, may cost you more down the line.
If you don’t think the allowances will cover what you want to put in the home, how will the excess amount be handled? Will you have to pay for it in cash?
Have your builder specify on the estimate a list of the standard materials used, including model numbers if appropriate. It is difficult to get a good job and durability from inferior quality materials.
If you have reached the point of accepting your builder and the proposal, then it is time to sign a contract. The contract will incorporate all of your discussions and all pricing and terms in writing. Items that were discussed and not included in a contract generally are not part of a contract unless they fall under a generally accepted industry practice. Do not simply assume that a missing term will be honored. While no one wants to “lawyer away” a prospective renovation, a proper document review is essential in getting what you paid for. If you or your builder can’t adequately explain what your contract says, then at least one party doesn’t know what they are signing.
A good working contract will include a detailed scope of work, that work will start on a certain date and be completed on a certain date; a payment schedule for specified work is detailed; and the rights and obligations of both the owner and contractor are spelled out. As to the payment schedule, as a company we have always avoided the 33% down, 33% for “half completion” and 33% at completion. These terms do not protect an owner and can raise real issues and debate as to percentages of completeness and when work is actually done.
Don’t be shy to include other reasonable contingencies or factors that are important to you in the contract. For example naming specific products instead of “equivalent or better” or specific colors that are tied to a product line,
Get a signed contract in writing. Please read your contract or in the alternative have a lawyer review it. A standard fee for a standard contract review will run between $750 to $1,500 and it’s certainly money well spent. You don’t want to be stuck in a contract that only benefits and protects the builder.
Confirm General Liability Insurance
Just because a builder has a license doesn’t mean that he is insured against injuries, job site accidents, storm damage or other unforeseen hazards. Ask your builder to see his certificate showing that he is up to date and fully covered with liability and damage insurance. A standard provision in many contracts is to add you as an “Additional Insured.” This involves very little effort and generally no cost on the builder side, so consider asking for it prior to going to contract.
Understand the Builder’s Warranties
The standard warranty for workmanship and materials is one year. In certain circumstances a warranty may be extended out past a year but this needs to be negotiated up front. If your builder doesn’t offer at least the average warranty, find a different builder.
Ask for help
We have been in the building industry for years, and don’t know it all. Don’t be fooled into thinking that you have to be the expert on everything. Ask for help – we certainly do when necessary. But do be careful where you get your advice from. Many people like giving it, but are they really qualified to give you valuable advice.
As we mentioned above, the use of an attorney to make sure your contract review has a good outcome.
A licensed architect for example can also be of great assistance. If you need or want to make sure that your scope of work is complete and correct, perhaps test the assumptions of your insurance company’s adjuster, or need structural or other plan work, then hiring an architect should be considered early in the process.