HINTS FOR OWNERS

Get all agreements in writing. Sign and date everything.

Agree on payment terms. Don't pay for work in advance.

Ask for a written warranty at the time you sign the construction contract. Carefully review the definition of a "defect" under the warranty. If it is not acceptable, change it before signing the contract.

Set a "guaranteed maximum price" on cost-plus contracts.

Require all change orders to be in writing with a set price.

Set a budget for the project. Allow a 10% contingency for cost overruns and changes.

Visit the construction site at least weekly. Take notes about what is happening. Date the notes.

Take lots of pictures at all stages of construction.

As owner, you are responsible for seeing to it that the contractor pays all bills for labor and material on the job. If these bills are not paid, a mechanics' lien can be filed against your property, even though you have paid the general contractor in full. Verify that all subs and suppliers have been paid before making final payment to the contractor.

Clarify how claims and disputes are to be handled. Does the contract require arbitration of all disputes? Arbitration may be quicker and cheaper way to settle disputes with the builder. On the other hand, some lawyers believe that juries tend to favor homeowners over builders.

In Georgia, disputes under $15,000 can be handled in Magistrate Court ("Small Claims Court").