This residential building contract (Contract), made [date], between [purchaser’s name], of [purchaser’s address] (Purchaser), and [builder’s name], a Michigan [type of entity], of [builder’s address] (Builder), for labor, material, and supervision in connection with the construction of a single-family home (Home), at the property identified as:
[Insert legal description and tax identification number if available]
more commonly known as [street address] (Property). Purchaser and Builder agree as set forth below:
Article I
Contract Documents
The following documents, construed together and in complimentary manner, form the Contract (Contract Documents):
- This Contract and any addendum, exhibits, and warranties to the Contract that are attached and initialed to this Contract;
- Architectural drawings job number [number], dated [date], prepared by [architect’s name] (Architect), consisting of [number] sheets;
- Specifications dated [date], prepared by [name], as initialed by the parties to this Contract;
- Applicable building codes;
- Written change orders, as defined by this Contract; and
- In the event of conflict between the Contract Documents, including the specifications, drawings, exhibits, addendum, or change orders, the most recent agreed-on revision to the specifications will apply.
Where this Contract is executed by Purchasers who are husband and wife, any subsequent modification approved by either husband or wife solely will be binding on both if accepted by Builder.
Pronouns and relative words used will be read as if written in singular or plural, masculine or feminine as necessary to fit the parties on this Contract.
Article II
Scope of Work
Builder agrees to finish all of the materials and perform all of the work required to construct on the premises of Purchaser described as a new single-family home that will be in accordance with the Contract Documents as defined by this Contract. Builder will pay for all permits necessary for the completion of the work done by Builder.
Article III
Purchase Price and Payments
Purchaser agrees to pay Builder the sum of $[amount] (Purchase Price) (subject to written change orders) to construct the Home in accordance with this Contract. On signing this Contract, Purchaser will pay Builder a deposit in the amount of $[amount] that will be applied to the Contract price. After, progress payments will be paid within 10 days from invoice, pursuant to the following schedule and terms, except for change orders, which will be paid as set forth in this Contract.
- Payment schedule as follows:
a. / Deposit—lot payoff / $[amount]
b. / Temporary drive, insurance, fencing, miscellaneous, etc. / $[amount]
c. / Basement, digging, foundation / $[amount]
d. / Backfill [(steel, lumber, tresses, TSI joist)—ordered] / $[amount]
e. / Balance through bank construction draws / $[amount]
- Each draw request to the bank will be accompanied by a sworn statement. Builder agrees to comply with such other requirements and submittals as may be reasonably required by the lender and the title company.
- Final payment of the entire unpaid balance of the Contract sum, except for that agreed-on amount for work required to obtain a final certificate of occupancy, incomplete items (including “punch list” items), and nonconforming work, will be made on receipt of a temporary certificate of occupancy, the final sworn statement, and receipt of all warranties and approval of all governmental authorities having jurisdiction.
- Any amount held in accordance with paragraph (3) for incomplete or nonconforming work will be deposited, by Purchaser, in escrow with [escrow agent] and will be released by [escrow agent] on written authorization from Builder and Purchaser. Builder acknowledges that final payment and the escrow requirements may be subject to modification in accordance with the requirements of the lending institution and title company.
- Purchaser will pay all costs for power and fuel needed from the commencement of the job through the completion of the Home.
Article IV
Change Orders
On agreement between Builder and Purchaser, change orders to the Home may be necessary. It is agreed that the amount to be paid by Purchaser for any changes or extras will be paid in advance. Purchaser understands that change orders may cause delays in the time for completion and that those delays will not be considered a breach of this Contract by Builder.
Article V
Time for Completion
The project will be commenced by Builder within [number] days from the date of this Contract and be completed as soon as reasonably possible given delays caused by weather conditions, strikes, fire, material shortages, energy shortages, acts of God, or other causes beyond the control of Builder. The Home will be deemed completed as of the date of issuance of a temporary or final certificate of occupancy or Purchaser taking possession of the premises, its equivalent by the governmental entity having jurisdiction to issue the same. Estimated completion date is [number] months, subject to delays and exceptions as specified in this Contract. If the project is not completed by [date], Builder will incur a penalty of $[amount] per day, which will be deducted from the final payment (or payments) due to Builder under this Contract.
Builder will not be responsible for delays in completion of work resulting from acts or neglect of Purchaser or persons employed by Purchaser; delays resulting from damage by fire, windstorm, or casualty; delays from shortage of any building material; delays caused by process of courts or arbitration; change orders; or other circumstances beyond Builder’s control.
Article VI
Possession of Premises
Until completion, as provided by this Contract, Builder will have exclusive possession, and Purchaser will not occupy, sell, transfer, convey, or otherwise encumber the land without first obtaining written consent of Builder.
Purchaser will not occupy the premises until the completion of inspections and approvals by the appropriate governmental authorities. If Purchaser desires to occupy the Home when it has been substantially completed, a temporary certificate of occupancy must be issued by the appropriate governmental authority, and Builder must consent to the occupancy. Purchaser will pay the balance of the Contract price and extras to Builder before occupying the Home. The cost of any unfinished work will be placed in escrow until that work is complete.
Article VII
Cleanup and Storage
Builder will keep the job site in a clean condition consistent with normal construction practices and will leave the Home in a broom-clean condition, full ready for occupancy by Purchaser at the time of substantial completion. Builder will be permitted to store materials, tools, and equipment on site during construction.
Article VIII
Purchaser Requirements
Purchaser, in addition to other duties and obligations as provided by the Contract Documents, will do the following:
- Within 10 days, respond to questions and issues raised by Builder regarding the construction or Contract Documents, including, but not limited to, selection of allowance items, materials, and colors, required during the construction process.
- Provide verification of financing from Purchaser’s bank or financial institution in a form reasonably satisfactory to Builder.
- Complete all necessary applications required to obtain any and all permits and bonds and pay any fees relating to any hearings conducted by architectural review boards, planning commissions, or zoning boards.
- Complete necessary materials selection and indicate, in writing, to Builder all necessary selections for completion of the Home. If Purchaser fails to make selections, Builder may, on written notice to Purchaser, continue construction and make the necessary selection, in which case Purchaser agrees to accept same. Builder will have the right of substitution on construction materials, provided that the materials are at least comparable with and equivalent to those originally specified.
- Timely provide or select any work or materials as set forth by the specifications necessary for the completion of the Home. Any loss or delay for failure of Purchaser to comply will be the responsibility of Purchaser.
- Provide, at Purchaser’s expense, Builder’s risk insurance an “all risk” form in an amount equal to the Contract price to include the interests of Builder. Purchaser may request Builder to provide Builder’s risk insurance, in which case, Purchaser will reimburse Builder for the cost.
- Provide accessible means of ingress and egress to the building site from a public road.
Article IX
Inspections
Builder will facilitate all inspections by the local municipalities and progress payments under Article III above will be conditioned on all inspections passing local government approval as well as the reasonable approval of Purchaser and Purchaser’s lender. Inspection and testing not required by the local municipalities will be paid by Purchaser.
Article X
Builder’s License
Builder is a residential builder, licensed in the state of Michigan, under builder’s license number [number], and is licensed under MCL 339.2401 et seq.
Article XI
Builder’s Insurance
On request, Builder will provide Purchaser with liability insurance information and will deliver to Purchaser certificates of insurance and endorsements issued by Builder’s insurance company.
Article XII
Liability
Builder will indemnify, defend, and hold harmless Purchaser from and against any and all expenses, damages, liabilities, and damages resulting from any breach or default by Builder under this Contract. Builder’s liability, as a result of any claims, delays, liability, loss, or expense asserted or incurred as a result of default, negligence, or wrongdoing of Builder, its agents, employees, subcontractors, supplies, or persons acting under any of them is limited to the extent of Builder’s insurance coverage that it may have insuring against such default, loss, damage, or liability.
Builder and Purchaser waive rights against each other to recover for damages of loss caused by fire or other perils that are covered by that insurance or any other insurance to the extent that the insurance or other insurance is valid and collectible.
Builder is not liable for any defects, claims, liability, loss, or expense asserted or incurred as a result of default, negligence, or wrongdoing of Purchaser, Purchaser’s agent, or Purchaser’s Architect. If Purchaser supplies construction plans and specifications, Purchaser will indemnify and hold Builder harmless from any and all defects, claims, liability, loss, or expense asserted or incurred as resulting from any defect in those plans.
Article XIII
Soil Conditions
Purchaser acknowledges and agrees that the Purchase Price is based on standard excavation with subsurface soil conditions adequate for the standard footing dimensions specified in the drawings. If Builder determines the existence of any subterraneous ground conditions that require de-watering, additional excavation, or additional footing work rendering the excavation and footing work nonstandard, Purchaser agrees to incur the cost for and treat the same as a change order.
Article XIV
Termination of Contract
If Purchaser fails to make payment as required by this Contract, if the project is stopped for a period of 30 days or more and the stoppage was caused by Purchaser, or if Purchaser is otherwise in breach or default of this Contract and that breach has not been cured within 30 days after notice of default, Builder, on written notice, may terminate this Contract, and Builder will have all rights and remedies as set forth in this Contract.
If Builder fails to comply with the terms of this Contract, Purchaser will notify Builder of the same as set forth in this Contract, and Builder will have 30 days to cure any such defect. After, Purchaser will have all rights and remedies as set forth in this Contract.
Article XV
Successors and Assigns
This Contract may not be assigned by either party without written consent of the other party. The provisions of this Contract are binding on Builder and on Purchaser, assigns, successors, executors, and administrators of Purchaser.
Article XVI
Disputes
Any dispute between Builder and Purchaser about this Contract, including the interpretation of this Contract and adequacy of performance of this Contract, will be resolved by arbitration before a single arbitrator who is mutually acceptable to Builder and Purchaser. If Builder and Purchaser are unable to agree on an arbitrator, either party may request that the president of the Home Builders Association of Southeastern Michigan appoint an arbitrator who is a licensed builder actively engaged in residential building. The decision of the arbitrator on any dispute will be final and binding on the parties and enforceable in any court of appropriate jurisdiction. Any expense of the arbitrator will be shared equally by the parties.
Article XVII
Notices
All notices, deliveries, or tenders given or made in connection with this Contract will be deemed complete and legally sufficient if mailed by ordinary first-class mail or delivered to the party for whom the same is intended at the following addresses:
Builder: / Purchaser:[builder’s address] / [purchaser’s address]
Article XVIII
Headings
The section headings in this Contract are for reference purposes only and will not affect, in any way, the meaning or interpretation of this Contract.
This Contract is made and entered into as of [date].
Witnesses / Builder[Name of builder]
/s/______/ By: /s/______
[Typed name of authorized signer]
Its: [Title of authorized signer]
/s/______/ Purchaser(s)
/s/______
/s/______
Specifications for
[Address]
Date: [date]Building Permits:
By Builder.
Insurance:
Worker’s compensation, builder’s risk, and contractor liability insurance are all carried by [insurance company] in the amount of $1,000,000.
Utilities:
New electrical service.
New gas hook up.
New sewer and water.
New storm sewer.
Site work and excavation:
Rough and finish grading only with soil on site. Specific work does not include rake grading for seed or sod, landscaping, or soil hauled on or off the lot or any other site improvements unless specified by owner and agreed to by Builder.
Lot clearing COMPLETE.
Dirt hauling COMPLETE.
Footings and foundation:
Footing: 20" x 10" five bag mix 3000 psi w/2 #4 rod.
Wall: 10" x 9" five bag 3000 psi w/2 #4 rod.
Drains: 4" perforated pipe discharged into sump.
Basement: Height: 9 feet. Waterproofing with rubber wall system by Water Tight.
Floor framing:
TJI-engineered floor joists, #2 or better plate stock with 3/4" hem fir plywood decking, glued, nailed, and later screwed to joists.
Exterior walls:
Framing material of SPF #2 or better 2" x 6" studs.