Games Contractors Play - Redux

Archive of Older Topics Archive - Specifications Discussions #3
1

Had originally started this in the “Favorite Typos” thread, but decided to initiate this one instead.

I WISH these were typos, but they’re not (but they ARE almost equally entertaining - and sad).

From a regional builder’s organization standard Residential Construction Contract:

A. Any inconsistencies or conflicts within the Construction Documents shall be resolved by the Builder in its reasonable discretion.

B. If a detail of the construction is not specified within the Construction Documents, or should an alternative building practice be available in lieu of a specified procedure, the Builder may select a construction procedure that complies with applicable building codes.

C. Unless otherwise specified in writing, materials used by the Builder in the construction of the Improvements shall be as prescribed in the Construction Documents, subject to substitution at Builders election should an item not be reasonably available or if the procurement of such would cause undue delay in the progress of the Work.

D. Any substitutions shall be of comparable grade and quality and shall be specified in a Change Order (as defined below).

E. The construction of the Improvements is also subject to any changes in the Construction Documents as may be required by federal, state or local governmental authorities. Owner acknowledges that these changes may occur during construction and agrees that so long as the Improvements are substantially in compliance with the Construction Documents, any such deviations will be accepted.

(The above five items were written as one contiguous paragraph, leaving it open for interpretation that the last sentence applies to ALL items listed in A through E.)

You want more?

C. FINAL PAYMENT - The Final Payment (that portion of the Total Contract Price not paid by previous payments as well as any Change Orders and Allowances (as defined below)) will be due and payable upon Substantial Completion (as defined below) of the Improvements.

D. Except as provided in Section 5.A, Owner and Builder agree that there will be no retainage.

(The exception metioned in the above provision pertains to the builder retaining monies as liquidated damages in the event the Owner terminates the contract. Otherwise, there is NO retainage. Builder also gets a 10% down payment before he starts. Cool, huh?)

E. The Improvements will be deemed to be substantially completed (Substantial Completion) when a certificate of occupancy is issued.

(Note that there is no metion that the Work actually has to be complete; all that is needed is a C. of O. and the builder gets paid in full. What a deal!)

Here’s another good one:

B. CHANGE ORDERS OF NECESSITY - Notwithstanding the provisions of Section 9.A, Owner agrees to execute Change Orders (including any necessary increases to the Total Contract Price) that may be necessary to:

  1. Comply with applicable governmental requirements.
  2. Provide structural integrity to the Improvements.
  3. Route electrical, mechanical, or other systems included in the Work.
  4. Avoid or correct any conditions which might result in defects or other warranty claims.

*(Commentary:

  1. Sounds reasonable.
  2. You mean the sale price of the house does not include provisions or the reasonable expectation that it be structurally sound?
  3. So pipe, ductwork, and wire ARE included, but routing them is not?
  4. So Owner pays for builder’s non-confoming work, and pays whatever it costs to keep it from being a warranty item? Whatever happened to doing it right the first time?)*

And last but not least . . .

E. OBJECTIONS TO WORK - Owner agrees to promptly notify Builder of any objections to any Work not in compliance with the Construction Documents. Failure by Owner to promptly notify Builder of objections to any Work performed within any phase of construction shall constitute an acceptance of that portion of the Work.

(A few paragraphs later it says that owner site visits shall be kept to a minimum. How convenient.)

The above paragraph E continues . . .

Owner acknowledges and agrees, however, that it may be inappropriate and/or unreasonably expensive and time-consuming to replace, re-fabricate or repaint a component that exhibits a minor defective condition. In such instances, Builder, in its sole judgment, may (i) employ an alternate remedy to correct the deficiency in conformance with reasonable building practices, or (ii) conclude that the condition is within acceptable tolerances and take no corrective action.

Nothing like the builder being the judge and jury in the event of their own defective work!

To anyone who may be building or remodeling a home, READ YOUR CONTRACT.

2

David,

Are you sure this isn’t a belated April Fools? Be afraid, be very afraid.

3

Wow. I knew that the “average” quality of the residential construction was lower than the “average” quality of Commercial construction, but I did not know that the contracts were so skewed. I wonder how many lawyers the builder employs and how many craftsmen?

Since I am unlikely to have a custom home built (unless someone buys me a winning lottery ticket) I am unlikely to have to deal with such an unfair contract.

Some years ago my brother Daves in-laws were building a new home. Dave (who is an Architect) started reviewing the state of the work every weekend. He would them brief his in-laws who would meet with the contractor on Monday. After a few weeks of this the Contractor said You have an Architect looking at this, dont you? They had very few disputes with the Contractor thereafter.

4

In my earlier life, I did some document review for an attorney involved in a lawsuit on a – (you guessed it) multifamily project. the drawings and specs were minimal, but the owner had cleverly decided that paying the architect for construction administration was a waste of money, because the contractor could do his own CA.

well, of course, there were a zillion problems with the building, and the attorney hired me to review the documents to point out all the architectural “flaws”. I think there were something like 280 points that he wanted addressed. My final commentary: the specs and drawings, while thin, are adequate for this work; however, since there is absolutely no documentation of what actually got built, I’m going to say that it was all construction errors. " the attorney said that “wasn’t the outcome he wanted” and I reminded him he asked me to review the documents as they existed, not as they should have been.

5

As a commercial construction super, I normaly see most ‘remedies’ documented in the division 1 specs, and rarely do I allow gray areas to evolve into litigation or arbitration. The contract language above would be hilarious were it not true. So happy I don’t do residential.

However, on the flip side, on my set of plans for a structure on a State college campus which involved “Owner supplied” equipment AND a million or so in feed mill equipment, was the following note on sheet A-1:

“General Contractor shall be responsible for all construction required for the installation of new materials, whether or not it is specifically shown or noted in these documents”

I guess he thought it would cover any pesky change orders that might come up later with additions to the work…

Excuse me, I am off to polish my crystal ball…

6

In partial defense of the contractor’s “minor defect” clause, I offer some observations. My brother has done residential renovations for years. You would not believe the level of pickiness that a few homeowners have that exceed any reasonable measure. If you think any of us would be picky, you haven’t encountered the “non-professional” observer. They have no knowledge of the tolerances of actual materials and systems. A real-life example: the outside corner of drywall being “rejected” because it was not exactly 90 degrees. Of course, finished corner bead will have that result with a normal level 4 finish–maybe it’s 85 degrees. (They’d never pay the cost of veneer plaster to avoid this.) Plus, the pickiness is not tempered by the cost, difficulty or unintended consequences of “fixing” it the way the homeowner thinks it ought to be. It can be never ending.

7

John has a good point. I have heard about a wealthy client that repeatedly called back the plumber because she perceived the hot and cold tap handles for her tub were not parallel when looked down on from directly above.

Mr. Purdue also has a good point. I have regular battles about such exculpatory language in drawings. It is a practice that has got out of hand.

8

I agree about the residential customer – especially the high-end residential customer. I’m sure we all have stories about high end residential remodels that were started

  1. because the working spouse wanted to give the non-working spouse a “project”
  2. because someone saw something in some magazine
  3. because someone read that Brad Pitt likes design and wants to be just like him
  4. because they have nothing better to do.
    I had a client who spent 8 months (yes!) picking out hand-pressed quarry tiles for her kitchen and then another month looking at various sealers to keep the tile looking new (when of course, that is exactly not the point of quarry tiles). I always think those clients should get “real” jobs.
9

A Contractor friend told me about the picky residential Loft client from hell. This stylish individual had a high gloss red paint coating applied to gypsum board ceilings. Fire Engine Red, Ferrari Red, whatever, it was really, really red. Each night, the client would lay down on the bed and watch lights from outside reflect off his red ceiling - until he found the every so slight wave, dull spot, or whatever. My friend made a half dozen return visits to try to “fix” the problem that involved a complete re-coat because there was no way to feather the finish.

As an Architect, I was once instructed by a client in the stock and bond world: “I want a shower just like the one at Chuck Schwab’s house, only bigger”.

For another client we were adding matching patios to each side of a symmetrical “Palladian” house front. The first was completed with very fine Kentucky Bluestone on a mortar bed. The client then decided they preferred brick patios, and out went patio one and the concrete substructure (too high because the brick they wanted was full size).

10

ohhh… I had a client who wanted a “staircase just like the one I saw on Dynasty last night”.
of course, no one in any respectable architectural office actually watched “Dynasty” so we had to find someone who had recorded the program…

11

The Crazy Client on TV:

In the '90’s, PBS Public Broadcasting carried a british comedy import called “Absolutely Fabulous”, about a odd, very, very wealthy London family and friends.

I remember the kitchen remodel episode, where the main characters, Patsy and Edwina (the mother in the central family), decide to go to New York on the Concorde to shop for kitchen cabinet knobs. After a day of doing everything but looking for the knobs, they head off to the 4 Seasons restaurant for happy hour (they are usually well on the way to drunk), where they find the knobs they like in the women’s restroom. With this they pat themselves on the back for a complete success and head home again to London.