Replies

1. 
   Scooter1 | Aug 04, 2004 12:05am | #1

   AIA has problems.

   First, it is slanted to larger jobs with three parties: Owner, Sub and Architect.

   Second, there is no attorney fee provision.

   Three there are prerequisites to to suing, one has to first refer the matter to the architect, then to mediation, then to arbitration. You can only sue for a mechanics' lien

   Fourth, there is no explicit warranty by the owner that the plans are accurate and fit the site, which is the law here in California; so in other words, if I build it to plans and specs, and it is screwed up, the architect or owner should be responsible, not me, unless I provide the plans, of course.

   I dislike the AIA intensely.

   Regards,

   Boris

   "Sir, I may be drunk, but you're crazy, and I'll be sober tomorrow" -- WC Fields, "Its a Gift" 1934

1. 
   gdavis62 | Aug 04, 2004 12:06am | #2

   OK, you don't like the AIA for some very good reasons.  So suggest me an alternate, but keep me from calling a lawyer.

1. 
   Scooter1 | Aug 04, 2004 12:19am | #3

   I have none.

   I had my lawyer draw up about a dozen contracts for fixed fee, cost plus, and a few addendumns to the AIA. This is the cost of doing business in our line of work. Also have him instruct you on mechanics liens and give you some forms. This will be the best $1,000 you'll spend. I'm surprised any contractor would not have these.

   Regards,

   Boris

   "Sir, I may be drunk, but you're crazy, and I'll be sober tomorrow" -- WC Fields, "Its a Gift" 1934

2. 
   davidmeiland | Aug 04, 2004 03:37am | #5

   Bob,

   I don't think you can avoid a lawyer. You can buy the JLC Contractor's Legal Kit, study the forms they use, and then draft your own, but I think that once you familiarize yourself with the details, you will decide that you want a custom document and the smart money is on having a lawyer proof-read it and polish it up. How are you going to feel if you write it yourself and someday end up in court finding out that you screwed yourself?

   The contract I use (3-4 version, actually) is the product of many hours of my own work detailing the things I needed in it, then $1100 worth of lawyering to get it completely airtight. I use it over and over so it's worth it to me to spend that and get something solid. It was not a small project... took lots of time over a few months to get everything ready to print out for a job.

   If I hadn't made so much money working for lawyers over the years, and enjoyed virtually every one of them, I wouldn't have liked spending that money. My opinion is that there's no choice. I shopped around and found one I really like who is accessible, fair, smart, humorous, well-dressed, argues in court a lot, and has a parking space for me by the door.

1. 
   UncleDunc | Aug 04, 2004 08:59am | #7

   >> ... completely airtight.

   Really? How many times has it been tested in court?

2. 
   WayneL5 | Aug 04, 2004 12:28am | #4

   I'd recommend a couple of the contractors' legal advice books like the ones advertised in the Journal of Light Construction all the time.  I think Quenda Belher Story is one of the authors if I spelled her name correctly.

   Then, once you understand what pitfalls you are protecting against, and how things can run much smoother with a proper contract, you can have a lawyer, specializing in construction law, draw one up, with your input about the types of work you do.  A contract is like an air bag -- a waste of $500 until you wish you had one.

   Just because you build specs doesn't mean you can't get benefit from contracts.  You have subs, and you need protection from them and their employees.  For example, if a sub's employee is hurt on your job, he can't sue his employer because worker's comp laws won't allow it.  But, he can sue you.  There are ways, both with contracts and insurance, that you can reduce the money and grief involved when something unexpected comes up.

   The only thing unexpected about the unexpected is when and how.  That the unexpected will happen is not unexpected.

3. 
   Piffin | Aug 04, 2004 04:39am | #6

   Just a suggestion - try the sec of state for NY. My state has a list of about twenty items that must be included in a construction contract. Miss any of them and you are screwed. The contract is likely going to be found null and void. The sec of State publishes a "model contract" online.

    

    

   Welcome to the
   Taunton University of Knowledge FHB Campus at Breaktime.
    where ...
   Excellence is its own reward!

4. 
   rjw | Aug 04, 2004 09:29am | #8

   Laws vary from state to state. what works in one might not work in another.

   If you think the cost of a contracts lawyer putting a form contract together is expensive, just wait to you see what defense counsel costs and the # of hours he'll have to spend on your case.

   Litigation lawyers love it when people "save money" with "off the shelf" contracts.

   ---

   "It is as hard for the good to suspect evil, as it is for the bad to suspect good."

   -- Marcus Tullius Cicero, statesman, orator, writer (106-43 BCE)

5. 
   RichColumbus | Aug 04, 2004 03:53pm | #9

   To reiterate what has already been said... pay the lawyer and at least ask for a kiss on the way out the door.

   I'm not a fan of paying lawyers any more than you are.  However, would you trust a lawyer to build your house?  If not... then don't expect that you will be able to match the quality of work that a good construction/contract lawyer will do.

6. 
   boiler7904 | Aug 04, 2004 08:33pm | #10

   There are a few other industry organizations, besides the AIA, that have contracts available.  The Associated General Contractors of America (http://www.agc.org) and the Design-Build Institute of America (http://www.dbia.org) are the first two that come to mind.  The way it sounds, you'd probably want to look at the AGC 200 Series General Contracts first (link below). 

   http://www2.agc.org/ECRM/source/orders/index.cfm?task=1&CATEGORY=505&DESCRIPTION=General%20Contracts%20%28200%20Series%29&CFTOKEN=337ee61%2D642e29ab%2D7fbd%2D49a3%2D862c%2Dc98e4f3fd5da&continue=1&SEARCH_TYPE=find

   From what I remember, the AGC only offers printed versions of their contracts, while the DBIA offers contracts in print, cd, and downloadable .pdf versions.  Another idea is to contact your local builder's association to see what they have to say.

1. 
   xMikeSmith | Sep 09, 2004 03:51pm | #11

   just bumping this thread back up..

   discussion of ARCHYS & AIA contracts  is timelyMike Smith   Rhode Island : Design / Build / Repair / Restore

1. 
   gdavis62 | Sep 09, 2004 06:58pm | #12

   I have the AIA 101 language in MS Word, and have been going through it tailoring it to my one and only need.  Got it from my brother, who is a commercial GC in Pittsburgh.  He uses it all the time.

   I need this fixed-price agreement because I was awarded, just a couple days ago, my first client contract, to build the house I have posted some questions about here on Breaktime.  The job will be done for a fixed lump sum.  We'll have an escalation clause in it that I have inserted, that identifies the unit prices at bid time of the various key materials that have potential for volatility. 

   In addition, all the items that are "to be selected by owner" are identified with their allowances, with language that will trigger change orders if price allowances are exceeded.  It is a short list: plumbingware, tile, front door, cab door and drawer pulls, and granite color.

   We have a lot of attorneys in this little vacation village I live in, mostly all of them doing real estate business.  A friend of mine has given me a copy of a lump sum agreement he used, done by the one lawyer in town recommended for this, and it is pretty crude.  Another lawyer I know in town (I know a bunch of them) told me he used the AIA 101, doctored up as I am doing, a few years ago when he had a house built.

   I am retired now, but when working, did a lot in the commercial contracting field.  For years, it was my job to review all contracts awarded us, negotiate with the owner or GC to agree on how to change language unacceptable to us, and settle business.  I did bid bonds, performance bonds, bonds to stave off liens, lien waivers, partial lien waivers, claims preparations for our attorneys, wrote and administered all subcontracts, etc., etc.

   For my agreement with my client, since we have no archy involved and are building from a 28-page planset which was purchased, I am removing all references to the architect.

   There is financing involved, and the bank is approving my proposed five-draw payout.  The events are:  foundation complete and capped, house roofed, windowed, and weathered in, drywall complete, delivery complete of all millwork and cabinetry, and final completion.  There will be a provision for certain items that require large down payments to be paid when due out of the owner's equity part of the package.

   I just ordered the Contractor's Legal Kit II from the JLC website, and am considering getting the paper form of the AGC 200 from the AGC.  The language I think is pertinent, from these other documents, may be used to temper my heavily-doctored AIA 101.  Once I have everything I need, I think I will be able to hammer out my agreement package and forward it to the client for review.

   I went to the Attorney General's office in the state capital, and asked if there is language or clauses required by them to be in construction contracts in this state.  They said there is none.

1. 
   Scooter1 | Sep 09, 2004 08:33pm | #13

   If you think the AIA is going to protect you from being sued and will force the issue to arbitration, think again.

   In a multi-party construction case, builder-customer; customer-building owner; architect-customer; and builder-subs, only the prime GC and the customer sign arbitration clauses, the AIA exempts subs, the owner, and of course, the architect, from arbitration.

   So if the deal goes in the s h i t t e r , you are likely to have 4 or 5 lawsuits and no arbitration.

   The AIA is a piece of work created by architects, designed to protect architects, and to quote Bill O'Reilly, the architect is not "looking out for you."

   Regards,

   Boris

   "Sir, I may be drunk, but you're crazy, and I'll be sober tomorrow" -- WC Fields, "Its a Gift" 1934

2. 
   xMikeSmith | Sep 10, 2004 02:32am | #14

   pretty good , micro... when i have a bank involved.. i always tell the customer i want 10 payments and to work it out with their banker..

   tract houses and modulars can move along on 3 to 5 payments... but for custom homes you need better cash control... go for more payments....Mike Smith   Rhode Island : Design / Build / Repair / Restore

1. 
   gdavis62 | Sep 10, 2004 05:39am | #15

   Howzis sound as a proposal.  I believe the lender's inspector wants verifiable milestones.  This one's my fallback . . . I will first start off with a schedule of values and percentage completion type of billing, twice monthly, and see how that flies.

   But here is the "milestone" approach, in twelve increments, not ten:

   1. Soft costs.  Permits, survey, deposits to hold stuff, advances.

   2. Foundation in and capped with main floor deck

   3. All slab work complete.

   4. Framing complete up to second floor deck

   5. Roof fully framed and sheathed

   6. Structure fully weatherproof with roofing, doors, and windows

   7. Mechanical and electrical rough-ins complete and inspected

   8. Drywall complete

   9. Masonry completed

   10. Wood flooring all down, millwork and cabinetry all on site

   11. Trim and cabinetry all installed

   12. Final completion

2. 
   xMikeSmith | Sep 10, 2004 06:18am | #16

   stick in siding complete ....

   and

   interior doors hung..

   that will get you to 14..

    add substantial completion for 15

   and keep your last one but call it punch out

   also.. try thinking along the lines of when phases START..

    not when they "finish".. too many things go to 95% complete and you get into arguements on a sign-off

   but it's hard to argue about starts..

    also..

   starts are more in line with your cash flow requirementsMike Smith   Rhode Island : Design / Build / Repair / Restore

3. 
   JeffBuck | Sep 10, 2004 05:02pm | #17

   "Upon substantial completion of framing and prior to start of drywall, a progress check in the amount of $5,000.00 will be required."

   or words to that effect ......

    the $5K covered the drywall ....

   Jeff

   Buck Construction, llc   Pittsburgh,PA

        Artistry in Carpentry                

4. 
   EricPaulson | Sep 11, 2004 08:55pm | #18

   Bob Dylan,

    

   FWIW this was the last whole house I built, almost ten years ago.

    

   I kept the payments small, and I seem to remember formatting the schedule to fit the banks schedule that was provided to me by the owner. I wish I could find that for you.

    

   Personally, I like to keep the payments small and up to date with the progress as much as possible. What Mike and others have said about payment due at start rather than finish is a great idea.

    

   EricEvery once in a while, something goes right!

2. 
   gdavis62 | Sep 15, 2004 11:45pm | #19

   Got my contractor's legal kit from Hanley Wood through JLC yesterday, and am throwing away all thoughts about using the AIA 101 format.

   What I got yesterday satisfies everything.