Major Types of Construction Contracts

Whether you are a homeowner hiring a contractor or a construction worker looking to begin working on a project, it is always essential to sign a construction contract. The contract is a legal agreement that both parties will adhere to the stated terms and provisions for the project. Nevertheless, there are various kinds of construction contracts used in the construction industry. The following are the main types of construction contracts. 

Lump-Sum Construction Contract 

This is a type of contract whereby the contractor issues a single fixed price for all the works described by the property owner. The contractor estimates the costs of the project then, includes miscellaneous expenditure and his profits to set the project pricing. Here, the contractor bears all the risks. It is usually ideal for projects with pre-determined designs that will not require major modifications during construction. 

Unit Price Construction Contract 

The total unit price of a project depends on the prices of every item-unit included in the work description. The payments to the contractor are determined by the pricing of the items covered in the scope of the work. In this kind of construction contract, both parties share the risks. Besides, it offers more flexibility for changing the designs during construction works. 

Target Cost Construction Contract 

Here, the contractor is paid depending on the actual costs of the project with a certain additional amount or a specified percentage of the total costs if the overall project costs do not exceed the targets set by the property owner. In case the expected costs of construction increase, the contractor carries the risks. On the other hand, the contractor is entitled to a reward of any savings from the set targets and actual costs. 

Cost Plus Construction Contract 

With this contract, the contractor is paid based on the actual project costs, including both direct and indirect costs, and a specified fee. The fee could be a fixed amount or a percentage of the actual costs. The contract gives the homeowner and contractor shared responsibilities in the management of the project. But, the owner bears all the risks involved. 

Although all the above types of construction contracts are recommended for undertaking construction projects, each has unique benefits and disadvantages that both property owners and contractors should know beforehand.

What You Should Know About Custom Home Floor Plans and Layouts

When it comes to designing a commercial home, there are many considerations to make. These can make your custom home building project seem overwhelming. However, you can have the process simplified by working with experienced custom home designer and builder. But, before you start planning the floor plans and layout of your home, here are things that you need to know. 

Allowances and Restrictions of Custom Home Layouts 

It’s important to know your property’s conditions that can dictate the function and shape of your home. 

Some of the restrictions to consider include: 

  • The current size and footprint allowances
  • Current zoning and bylaw regulations 
  • Tree requirements and restrictions 
  • Easements, right of ways, and encroachments 

To ensure that you understand your lot’s construction potential, your custom home builder should start by formulating your property report. This should outline allowances and restrictions. 

Architectural Style 

Share your vision with the builder and designer. Do you need a craftsman style home with modern accents or a modern farmhouse that creates an industrial feel? Regardless of your design, share your vision with the designer and builder. This will enable them to help you achieve your goals. 

The Budget 

Having a budget before construction starts enables the designer to operate within your financial capabilities. The designer will work with the builder and share obstacles and opportunities with you. They will also come up with custom floor plan and layout with your desired function and budget in mind. Their goal will be to maximize on what you can accomplish with your budget. 

Priorities 

It’s important to have a list of priorities or a wish list. This should highlight what you want your floor plan and layout to have. It can include a backyard swimming pool and other important features. The designer and builder should work with you to ensure that the floor plan and layout of your custom home will take advantage of the natural sunlight. This will make the home more energy efficient by ensuring that it utilizes light from the sun during the day. 

These are the most important things to know about custom home floor plans and layouts. Work with a designer and builder that understand the importance of custom home floor plans and layouts to achieve the goals of your custom home project with ease. 

The Major Preliminaries of a Construction Project

Arturo of GT Roofing & Construction mentions in a recent blog post explains that in any construction project, preliminaries are the general project details and specifics that the involved stakeholders should know upfront. They include what is required for successful project execution and all relevant conditions. The important aspects of the project such as planning and subsequent execution can be described in the preliminaries.

Examples of Preliminaries in Construction

Construction preliminaries vary from one project to another. However, they may include the financials of the project, necessary details outlay regarding subcontracting and seeking approvals for building permits, equipment leases and other items. Preliminaries can be used to provide crucial details regarding testing measures as well as achievement of construction project’s goals.

Why Construction Preliminaries are Important

Construction preliminaries outline different aspects of the project. Planners and contractors get all important details of a construction project before they start working on it. Additionally, preliminaries serve the preliminary purpose in the order of the work to be done.

In general, preliminaries outline different details of the construction project when it nears the end of the planning stages. They lay out the information required by the contractors to analyze the project, finalize it and record its details. Preliminaries provide essential details for the smooth execution of the project. They also provide the goal that should be achieved at the completion of the project such as the completion date and budget.

Why Work on Preliminaries with Experts

In most cases, the contractor uses the preliminaries to get a description of the construction project. However, preliminaries are not part of the required works’ package as indicated in the contract. Nevertheless, they play a role in indicating the circumstances and methods of completing the construction works.

As such, it is important to work with experts to ensure proper description of the required works. Experts will also enable you to specify general requirements and conditions for effective execution, including things like approvals, subcontracting, and testing.

Importance of Good Construction Cost Management

When it comes to designing and planning a construction project, cost is very important. Cost considerations are present in all aspects of a construction project include budgeting and building. Without good cost management, it’s easy to run out of money before completing a construction project.

Construction Cost Management is about Establishing Realistic Capital

Construction cost management entails detailed planning and control of the costs. It’s about making sure that the construction project is documented, bid, and completed with the budgeted amount. It’s also about ensuring that the project is completed in an economical manner with careful consideration of aesthetic and program requirements.

Every construction project requires an unbiased, independent, and professional cost manager. This manager should be involved from the start to the end of the construction project. Involving a cost manager in your construction project ensures that your financial interests are protected.

A cost manager uses engineering judgment as well as experience while applying scientific techniques and principles in analyzing and developing the right actions in relation to cost estimation. They also analyze the profitability of the construction project and engage in cost control. By using the principles of cost management, a cost manager ensures that a construction project is designed within the set budget objectives. They also ensure that the project meets quality and performance goals.

Why Good Construction Cost Management Matters

Good construction cost management enables a property owner to understand the cost of construction and budget implications. This enables them to avoid costly and time-consuming processes of redesigning and reviewing the project. As such, a project owner should hire an unbiased, professional cost manager without conflict of interest. This will overview their project cost from inception till completion. They will also make professional recommendations in relation to the cost of the project.

If you have an upcoming construction project, hire a reputable construction cost manager to protect your interests.

Eco-Friendly Construction Methods

Construction refers to a process of creating a structure or building using artificial or natural resources and manual labor. An eco-friendly construction method is the one that protects the natural surrounding without causing harm to the environment in ways like releasing toxic gasses. Global warming is increasing by the day. As such, it’s necessary to take strict measures that will address challenges like pollution, peak oil production, climate change and depletion of resources.

When some contractors take the seriousness of pollution and global warming into consideration, they employ environmental friendly construction techniques or methods.

Lowering Energy Consumption

One of the most common eco-friendly construction methods is building houses with low energy consumption. Decrease in fossil fuels and climate change are predictable. It’s therefore important to build houses with low energy consumption. Eco-friendly construction involves construction methods and materials that are eco-friendly.

Buildings constructed many years back need demolishing because they can’t withstand climatic change and natural calamities. Before they are demolished, parts that can be recycled are considered. These may include furniture, windows, floor tiles, sinks, and doors that can be used in modern buildings. Green construction methods take advantage of recycling to use these materials in new buildings. This lowers construction costs while saving natural resources.

Construction of Healthier Houses

Eco-friendly construction creates better outdoor spaces. Conventional construction is associated with numerous health problems. That’s because it uses materials that release chemical toxins from paints, solvents, plastics, and composite timbers. It also leads to production of biological pollutants like dust mites and molds that can lead to health problems. These may include asthma, fatigue syndrome, and palpitations.

Eco-friendly construction methods eliminate such problems with better ventilation and use of non-toxic materials and natural products. For instance, breathable walls keep indoor environments comfortable and hygienic. Eco-friendly construction helps by supporting the local businesses and economy.

Eco-friendly construction is a wise choice. If you have an upcoming construction project, choose a contractor that uses eco-friendly construction methods and materials. This way, you will reduce the negative effects of your project and building on the environment.

Things Your Contractor Won’t Let You Know

You’ve done your homework and hired a contractor. As such, you are convinced that you have a top-notch expert for your construction project. However, it’s important to remember that the contractor won’t mention anything that can prevent you from giving them the job. Before committing yourself, here are some of the things to know that your contractor does not want you to know.

There Are Better Contractors Around

You may think that you have the best contractor for your project but it’s possible that there is a better professional out there. And, your contractor does not want you to know this because you might not give them the job. Therefore, before you hire a contractor, take time to compare them not just on the basis of their bids. Consider their completed projects, materials used, and timeliness.

They Won’t Be at Your Jobsite All the Time

The contractor that you hire will not always be at your jobsite. That’s because most contractors have multiple projects running at the same time. As such, they have to keep an eye on all projects. Therefore, your contractor can spend a few minutes at your jobsite and leave subcontractors to do the job while they go to foresee another project.

They Will Outsource

A contractor may be a mansion, plumber, or carpenter. However, they can’t do all the job of your construction project. For this reason, they outsource skills required by different projects. In fact, subcontractors do most of the work at construction sites. Actually, the roles of most contractors is signing new clients, managing budgets, and scheduling subcontractors cast.

A Huge Deposit is Not Necessary

In fact, asking a huge deposit can be illegal. In signing a contract, the contractor expects you to pay a certain amount upfront. However, this is not for covering the set up costs or initial materials. A contractor with a financially sound business and good standing has the amount necessary to cater for this. In most cases, 10% deposit is enough to prove your commitment.

These are some of the things that your contractor won’t let you know. Nevertheless, knowing them enables you to negotiate with the contractor properly before you hire them.

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Construction at your home or office. Essential info

Considering to build at your home or office can be scary. There are so many things that you should do and remember, that it is easy to make a huge mistake. This is why you should make sure that you are getting all the right information. This is to ensure that you are making the right decision to build at your home. These are all the essential information that you should consider before construction starts.

Your plans should be doable

The last thing that you want, is to have problems with your construction plan half-way through the project. You should make sure that your plans are in order and that it is doable.

This is why you should make sure that you are hiring an experienced person that will ensure that your plans are on the scale and that it will fit into the space available. If it doesn’t fit correctly, you might need to start over. And, this is just a waste of time, money and construction material. And, this is going to be frustrating as well.

Making sure that you hire the right construction contractor

Yes, if you are building at home, you can do all the work yourself, and not hire a construction contractor. But, one thing that you should know is that this isn’t recommended. The only way that you can do the construction yourself, is if you are experienced as a builder.

You should take the time and make sure that you are hiring the best contractor you can find. It should be a local contractor with lots of good references. Then, you will know that you are on the right path to your new home or office extension.

Construction is going to be a mess. Deal with it

If you are one of those people that want everything to be neat and tidy, then you should not consider construction. Especially not at your home. This is something that people don’t consider. Construction is messy and it is going to last for quite some time. So, you should deal with it, or not consider construction at all.

With all this essential information, you will know more about construction. And, you will know if this is something that you can consider doing. But, you should make sure that this is the best option for you. This can be a frustrating and scary time, waiting for the construction to be completed.