Page 15 - Secrets of a Luxury Home Builder
P. 15

is billed separately for such items as builder staff meeting time, accounting preparation,
cell phones, travel ect.

A Cost Plus Fixed Price Contract is principally a cost plus contract with a fixed fee instead of
a percentage of total cost. This agreement has basically the same advantages and
disadvantages of the cost plus contract except the fee is fixed.

A seldom used contract that can be a useful to owners wishing to engage a home general
contractor for specific service agreements, such as acting in advisory capacity or special
inspection services or even construction agreement, would be a Construction Management
Agreement. This is more of a personal service agreement than the construction services
performance standards as with the previous contracts mentioned.

A good general contractor will maintain the proper levels of insurance including general
liability and workman's compensation. This is important because if someone gets hurt or
the property is damaged by a subcontractor vehicle and the builder is uninsured, the owner
becomes responsible by default. The owner should also be made aware that unless the
builder owns the property, the owner is responsible for carrying builders risk during
construction to avoid risk associated to construction risk loss.

It is also best that the builder properly administrate the subcontractors insurance carefully
to avoid the acceptance of additional exposure from the subcontractor being uninsured or
not properly insured. Either the lack of or lapse in insurance of a job site working
subcontractor can lead to unwanted insurance claims or law suits from accidents that take
place on the project site.

In conclusion, the luxury custom home building experience is a complicated process with
many moving parts. It is advisable for a serious new home construction buyer to commit a
generous amount of their time in their preparing and planning for such an endeavor. It will
pay great dividends in organizing and making countless decisions through this entire
experience. Marwood Construction would welcome the opportunity to assist you with your
needs in designing and building your new luxury custom home.  713-818-1720

Copyright © 2016 Marwood Estates LLC, All rights reserved.
            You may forward this article exactly as is
   10   11   12   13   14   15   16