Legal and Contracts Building a custom home is a large investment and a handshake is not enough to finalize the deal. While verbal agreements may seem convenient, they can lead to misunderstandings and disputes. You’ll need to put your agreement in writing.
A contract is a legal agreement that sets out the roles and responsibilities for the owner and the builder. It protects both parties and makes sure everyone agrees on expectations. This clarity is crucial, as it helps prevent misunderstandings that could lead to disputes. Without a contract, homeowners may find themselves vulnerable to unexpected costs or incomplete work. When reviewing a construction contract, it’s important for consumers to recognize several key topics that are typically included. Understanding these elements can help ensure a smoother construction process and protect your interests. Here are some common components to look for: 1. Parties All relevant parties must be included in the contract. That includes those on title for the property where the home is being built, the builder, and anyone approved to provide instructions to the builder. For example, if there are two spouses who will be providing
instructions to the builder this should be explicitly mentioned in the contract. If both or either spouse must approve change orders, this should also be explicitly mentioned. You should verify that the builder is licensed appropriately by checking the Public Registry of Licensed Residential Builders . You should also make sure the person signing the contract for the builder is authorized by the builder to do so. 2. Subject Matter This section should clearly define the scope of the work to be provided by the builder. It should include details about the design, materials and finishings so there is a mutual understanding of the expectations. Design plans should be incorporated into the contract to be used as a reference point throughout the project as this will make it easier to address any changes or issues that arise.
Hiring a Builder in BC: A Consumer Protection Guide
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