My builder has presented this first draft of a contract to me. I know there will be changes that do need to be made, I have spotted several already (the first that comes to mind is #5 should be tied to % of completion not just a monthly pmt. We may also want to add a guaranteed maximum price and a shared savings). I will be fine-toothing the contract tonight and over the weekend. I will also give it to our attorney to read over. But, I am calling upon the generous and knowledgeable Gardenweb members to put in their 2 cents worth !!

Also, if anyone else has a cost-plus contract that they used and would be willing to share with me, would you please contact me thru My Page above. I would like to compare as many different versions as I can possibly find to include the best parts of all and discover possible problems ahead of time. Thank you so much !!

(just FYI, I have already worked out the details of the bank account stuff with my banker. Builder will not be able to see or access any of my other accounts. He will not have any account holder rights on the account and I can remove his internet access at any time. We will maintain only $1 balance in the account except when we are transferring funds. Likewise, I cannot see or access any of his other accounts)

Cost of the Work Plus a Fixed Fee

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This Agreement entered into this ____ day of _________________, 2010 by Angela12345 : ) hereinafter referred to as OWNER, and My Builder, hereinafter referred to as CONTRACTOR.

For and in consideration of the mutual promises and covenants herein contained, the Owner and Contractor do hereby agree as follows:

1. The Contractor accepts the relationship of trust and confidence established between his company and the Owner by this agreement. He covenants with the Owner to furnish his best skill and judgment in furthering the interest of the Owner. Contractor shall build, construct, and erect for Owner the improvements shown and more fully described on final architectural plans and on proposal dated 10 September 2010, and which are hereby made a part of this Agreement by reference. Please note said proposal was based on preliminary plans provided by Owner. Information is subject to change once the final design and engineering are completed. Said improvements shall be constructed on property owned by the Owner located at My Street, My Town, NC 12345.

2. Builder warrants the improvements shall be built, constructed and erected in a good, workmanlike manner in accordance with the plans and specifications and all building materials shall be of such quality and nature as ordinarily pass in the course of business without objection. He agrees to furnish efficient business administration and supervision and to use his best efforts to furnish at all times an adequate supply of workers and materials.

3. Assuming all conditions precedent are satisfied, weather permitting and materials readily available, the work to be performed under this Agreement shall be substantially completed five months from date of piling installation. Substantially complete shall be defined as sufficient for the Owner to occupy the home. Occupancy will not be allowed until final contract payment has been received.

4. The Owner agrees to reimburse the Contractor for the direct "cost of the work" as defined in paragraph 6 below. Such reimbursement shall include the Contractor's fee stipulated in paragraph 5.

5. In consideration of the performance of the contract, the Owner agrees to pay the Contractor as compensation for his services a contractor's fee as follows: All costs incurred over total project length paid as per paragraph 11, including a fixed fee of $35,000.00. Said fixed fee of $35,000.00 shall be paid as $7,000.00 per month due on the 10th day of each month during the five month construction period. Final contractor fee of $7,000.00 will be paid as $3,500.00 due on the 10th day of the final month of construction with the balance of $3,500.00 due upon Owner sign-off.

6. The scope of work shall consist of the "categories of work" described on proposal dated 10 September 2010 for an estimated amount of $000,000.00 and attached hereto. The estimate amount is attached solely for the purpose of describing the category of work. The pricing estimate shall have no bearing on the cost of the work.

7. The term "cost of work" shall mean costs necessarily and reasonably incurred in the performance of the work and actually paid by the Contractor, including all costs incurred due to changes and extras not listed on the attached proposal.

8. The Contractor shall procure the necessary permits for the work of improvement. Owner shall pay the governmental fees and Contractor's charges for said permits.

9. The Contractor shall keep full and detailed accounts as may be necessary for proper financial management under this agreement. The Owner shall be afforded access to all the Contractor's records, books, correspondence, instructions, drawings, receipts, vouchers, memoranda, and similar data relating to this contract, and the Contractor shall preserve all such records for a period of three years after the final payment.

10.The Owner agrees to create a separate banking account through My Bank with said account linked via internet with Contractor's He uses my bank too : ) banking account for the sole purpose of making payments as described in paragraph 11. Owner agrees to transfer a down-payment of $5,000.00 into Contractor's My Bank account representing a deposit for initial costs upon execution of this contract.

11.The Contractor shall, during the course of work, deliver to the Owner a statement showing in complete detail all costs incurred by his company in the execution of this contract for the preceding period. Accompanying said statement shall be a copy of all back-up documentation including material procurement invoices, payrolls for all the labor and all receipted bills for which payment is due. The Owner shall review the statement and shall remit such amount within two days of the Owner's receipt of the statement to the Contractor via above described internet linked checking account. The final payment, constituting the unpaid balance of the cost of the work and the final contractor's fee, shall be paid by the Owner to the Contractor when the work has been completed and the contract fully performed. It shall be the responsibility of the Contractor to obtain from the subcontractors all waivers of lien and present said waivers of lien to the Owner prior to final payment to the Contractor.

12.The Contractor agrees to maintain worker's compensation, liability insurance, and builder's risk insurance in effect throughout the course of the work. Contractor does not provide flood insurance and such is the responsibility of the Owner.

13.The Contractor hereby agrees to hold the Owner harmless and to indemnify the Owner against any and all claims which may arise during the course of the work as a consequence of the negligent acts of deliberate omissions of the Contractor, its agents, or employees.

14.Upon receipt of certificate of occupancy from the My Town, Contractor shall participate with the Owner in a detailed inspection of the house to prepare a list of items to complete, which will be completed in a timely fashion (no more than 30 days from CO issuance). After completion of said list, final payment will be due. House cannot be occupied until final payment is made on contract.

15.Owner agrees to pay Contractor a penalty of 1 percent per month (APR 12%) on any delinquent monies due to Contractor according to paragraphs 5 and 11 above. In the event of default, Owner agrees to pay all costs of collection, including reasonable attorney fees, and Contractor is under no obligation to continue any work until payments by Owner to Contractor are current. In the event of non-payment and/or default by Owner, Contractor may recover any and all materials used or unused for replacement costs.

16.Owner agrees to furnish to Contractor any and all documents reasonably required by this Agreement and shall furnish a current survey of the premises showing setback lines, easements, right-of-way, and restrictive covenants affecting said premises.

17.If applicable, Owner agrees and understands that he/she shall pay for all lending institution inspection fees, origination fees, interest charges, legal expenses or other charges made by the lending institution in connection with obtaining financing for said improvements and that such fees are not to be charged against the sum to be paid by the lending institution. Said fees are not included in estimated proposal.

18.Owner and Contractor agree that should unknown physical conditions below the surface of the ground, of unusual nature, differing materially from those ordinarily encountered and generally recognized as inherent in the work of the character provided for in this Agreement be encountered, i.e. should Contractor discover rock, sand or any other unusual materials during excavation, the contract sum shall be equitably adjusted.

19.It is further understood and agreed that this Contract Agreement is binding upon the parties, their heirs, successors, administrators and assigns.

20.Workmanship from My Builder carries a one-year warranty from the date of the issuance of the Certificate of Occupancy (CO) on the home. The Contractor shall participate with the Owner in a detailed inspection of the house approximately ten months after the date of substantial completion of the work to prepare a list of items for the Contractor to complete prior to the expiration of the one year warranty.

This agreement is executed the day and year first written above.