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Agreement for Construction of Residence

(Between Builder and Owner)

Agreement dated [date] by and between [name], with offices at [address] (Builder), and [name], residing at [address] (Owner).

1. Builder's Undertaking and Cost of Construction. Builder will construct a [describe house], more fully described in the drawings, blueprints, and specifications attached to this Agreement and made a part thereof (the House). The House shall be constructed on a tract of land which is more specifically described on a survey attached to this Agreement and made a part thereof on which the House location has been placed, which survey has been signed by Owner. Builder will supply all labor and materials and will complete construction of the House in accordance with the attached drawings and specifications for the sum of ---------- dollars ($----------). Said sum shall be paid as follows: [set forth events that trigger payments] [or: in accordance with standard construction mortgage releases]. The price shall include temporary heat and electricity installed by Builder, if the same is necessary. When electricity is drawn into the House through a hookup with the lines of the local power company, Builder may have the use of such electricity, which is to be paid for by Owner.

2. Owner's Warranties Regarding Tract. Owner represents and warrants that:

a. He is the sole owner of the tract of land on which the House is to be erected.

b. He has not executed and, until this Agreement is fully completed, will not execute any deeds, leases, or other documents that will convey to anyone else any interest in the land (other than the construction and permanent mortgages).

c. Title to the land is good and marketable.

d. The premises are free and clear of all liens and encumbrances (with the exception of the construction and permanent mortgages).

e. The tract of land abuts a public street or is accessible by way of a permanent right of way as means of uninterrupted access to and from the subject tract to enable Builder to perform this Agreement.

f. Owner will remove or remedy any situation that is contrary to any of the foregoing representations and warranties.

3. Time of Completion. All work will be completed in a workmanlike manner according to practices that are standard in the community in which the House is to be constructed. The work shall be completed and the House available for occupancy no later than [date]. Anything to the contrary contained in this Agreement notwithstanding, Builder shall not be liable for any delays caused by strikes, accidents, fires, or other casualties; civil insurrection; or other events outside of the Builder's control.

4. Insurance. Owner shall at all times maintain fire and extended coverage insurance on the House in an amount no less than the full insurable value thereof. All such insurance policies shall be payable to Owner, Builder, and mortgagees, as their respective interests should appear. Builder will carry Workers' Compensation and Contractor's Liability Insurance in an amount not less than ---------- dollars ($----------). The parties, upon demand, shall provide each other with certificates evidencing ownership of such insurance.

5. Permits and Liens. Owner is responsible for obtaining all necessary permits and for the cost thereof. By executing this Agreement, Owner designates Builder or Builder's agent as Owner's agent to obtain all necessary permits. Builder will place a stipulation against liens against the tract and Owner shall be responsible for the cost of filing the stipulation.

6. Work to Be Done by Builder. Builder, at its own cost and expense, shall provide all manner of materials, labor, scaffolding, implements, molds, models, and cartage of every description for the due performance of all of the work provided in the attached drawings and specifications. All plumbing shall be properly installed and all connections thoroughly tested in accordance with local ordinances. Hot and cold water connections shall be made to all necessary fixtures. All house supply lines, waste lines, and vent pipes shall conform to local code requirements. Tap-on fees, if any, are to be paid by Owner.

7. Material and Products. All material is guaranteed by Builder to be as specified herein. Builder is authorized to substitute a better grade or quality of material or to substitute products of equal grade or quality instead of those specified, provided they are recognized in the construction industry as equal to or better than those specified. Notwithstanding the foregoing, no material or products that will affect the appearance or utility value of the House or its components will be substituted by Builder without Owner's written consent.

8. Work by Owner. Any work that Owner is to do shall be coordinated with the work that Builder is to do so as not to delay Builder in the performance of its work.

9. Drawings and Specifications. The drawings and specifications attached hereto are intended to coordinate with and explain each other. If there is any ambiguity between them, the specifications shall control over the drawings. The specifications and drawings are incorporated in this Agreement as they exist at the time of the execution of this Agreement or as they may be amended in the future by the mutual agreement of Builder and Owner. No changes in the drawings or specifications, other than those required to carry out the meaning and intent of this Agreement, shall be made unless Builder and Owner agree on the nature and extent of such changes and the price to be paid by Owner to Builder for such changes. All changes in the drawings or specifications shall be binding only if they are set forth in writing on Builder's Change Order or Extra Work Voucher and signed by Owner.

10. Blueprints. All drawings shall be shown on blueprints prepared by Builder. Owner shall be given a set of preliminary blueprints without charge. Owner shall sign and accept all final blueprints, provided they incorporate all changes requested by Owner following Owner's review of the preliminary blueprints. After acceptance of the final blueprints, if any changes are requested by Owner, Owner shall pay an administration charge of $300 for each change ordered. The administration charge shall be paid in full at the time Owner signs the Builder's Change Order or Extra Work Voucher.

11. Builder's Guaranties. Builder guarantees that the House will be free of defects in workmanship for a period of [number] years from the date the occupancy certificate to the House is issued by Builder to Owner as hereinafter provided. All materials will be furnished under standard trade rules or manufacturer's warranty or guaranty, and Builder's liability for defects in material shall be limited to the filing of proper claims with the manufacturer. Builder shall not be liable for the presence of water or dampness in crawl spaces or in the basement of the House.

12. Mortgage Loan. This Agreement is conditioned on the Owner's obtaining a permanent mortgage loan in the sum of ---------- dollars ($----------), and Owner will use his best efforts and cooperate with Builder to obtain such loan. Such mortgage loan shall provide that the lender will make payments to Builder as construction proceeds in accordance with a schedule approved by the lender (Construction Payments). Owner shall obtain a commitment for the mortgage loan from a lending institution within [number] days from the date hereof and close on construction financing within [number] days thereafter.

If Owner is unable to obtain a commitment within the time herein specified, Builder, within a period of [number] days following the last day on which Owner was to obtain the commitment, may submit at least [number] applications for a permanent mortgage loan on behalf of Owner. If Owner is unable to secure a commitment for a permanent mortgage following the submission of these additional applications, Builder shall return to Owner all monies paid by Owner to Builder in accordance with the provisions of this Agreement, except for any fees, costs, and out-of-pocket expenses borne by Builder to process this Agreement and to prepare drawings, blueprints, and specifications. A statement of all such fees, costs, and expenses shall accompany the payment. Upon receipt of any monies due to Owner in accordance with this Paragraph 12 together with the statement of fees, costs, and expenses, this Agreement shall terminate and be without force or effect. All drawings, blueprints, and specifications prepared by Builder shall be Builder's property, and Owner shall return all copies thereof in his possession.

13. Release of Construction Payments. Owner shall inspect the House prior to every release of a Construction Payment. Any failure of the Owner to inspect the House, or to inform the Builder of any deviation from this Agreement or the drawings or specifications, shall be deemed a waiver of any right Owner may have to object to or reject such deviations on work performed by Builder during the particular stage of construction for the release of a Construction Payment and shall be deemed to be an acceptance thereof by Owner. Notwithstanding the foregoing, structural defects that reduce the fitness of the House for occupancy shall not be deemed accepted by Owner, who shall retain all rights that he may have to demand that they be corrected.

14. Occupancy of House. Owner shall not occupy the House, either physically or by moving in personal possessions, until (a) the House has been completed in accordance with the drawings and specifications attached hereto; (b) all the terms of this Agreement have been complied with; and (c) an occupancy permit is issued by Builder to Owner. Until final settlement of all monies owed to Builder, the house shall remain Builder's property. Owner's occupancy of the House shall constitute acceptance of the work performed by Builder as being in compliance with the provisions of this Agreement, the drawings and specifications that are part of this Agreement, and any Change Order or Extra Work Voucher signed by Owner. At the time Owner authorizes release of the final Construction Payment, Builder will give Owner a printed form on which Owner shall prepare his list of necessary punch work. Owner shall return such list no later than [number] weeks after it has been provided by Builder, or Owner shall be deemed to have waived his right to any such work. Punch work is not part of this Agreement or the drawings and specifications attached to the Agreement, and Owner will not hold up final release of construction funds because of punch work.

15. Unexpected Conditions. The price set out in Paragraph 1 hereof is based on a natural formation of the ground on the tract and on the assumption that only soft digging will be required for the construction of a foundation, the installation of a septic system, and any other excavation required by this Agreement. Should blasting of rock be necessary or should hard shale, rock, or water be encountered, there will be an additional charge to Owner for blasting of rock and/or removing the hard shale, rock, or water to the extent of any cost in excess of the cost of soft digging, together with any extra cinder block or concrete that is required. Any back filling or rough grading will be performed with the soil removed from the excavations. However, if additional fill is required, the cost of such fill shall be billed to Owner. Builder will not be responsible for the settlement of back fill or for broken pipes or plumbing fixtures caused by frozen pipes if such damage occurs after release of the final Construction Payment.

16. Delay of Construction by Owner. If Owner delays construction by indecision, by failure to authorize release of Construction Payments, or for any other reason not due to the fault of Builder, Owner shall be responsible for all additional costs incurred by Builder as a result of such delay. Such costs shall include, but are not limited to, (a) extra labor and materials and (b) the down time of workers and equipment or, in the alternative, the cost of moving equipment to other job sites. If payment is not received within [number] days after billing, Builder may stop all work until payment is made in full.

17. Breach by Owner. If Owner makes any material breach of this Agreement, Builder may terminate this Agreement upon sending notice to Owner at the address provided in this Agreement or otherwise provided by Owner, by registered or certified mail, return receipt requested. Upon sending such notice, Builder shall have no further obligations under this Agreement and may terminate construction. Builder may retain any monies it has received, and, if the percentage of construction completed at the time such notice is given has not been paid for in full, Builder shall be entitled to receive such unpaid amount from the Owner together with the agreed-on price of all unpaid extra work performed by Builder. In addition to the foregoing, Builder shall be entitled to ---------- percent (----------%) of the amount paid by Owner to Builder to date (including any unpaid amounts described in this Paragraph 17) together with Builder's collection costs and attorney fees, if any, as liquidated damages and not as a penalty.

18. Arbitration. Any and all disputes between the parties arising under this Agreement shall be determined by arbitration by three arbitrators in the City of [name] before the American Arbitration Association in accordance with its rules then obtaining, and judgment may be entered upon the award in any court having competent jurisdiction of the subject matter thereof.

19. Captions. The captions in this Agreement are for reference purposes only and shall not in any way affect the meaning or interpretation of this Agreement.

20. Entire Understanding. This Agreement contains the entire understanding between the parties and supersedes all previous agreements between them regarding the House, whether oral or in writing. This Agreement cannot be modified or terminated except in accordance with its terms or by a writing signed by the parties.

21. Place of Execution. Regardless of where this Agreement is executed, it is deemed executed in ---------- on the day and year first above written. This Agreement shall be interpreted in accordance with the laws of [state].






This Section for Notary:


STATE OF -------)

) ss: [Date]

COUNTY OF ------)

On [Date] before me, [Name of Notary], notary, personally appeared [Name of Person(s) Involved], personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.

Witness my hand and official seal.


[Name of Notary Public]

My commission expires: [date]