___________________________________________ City: ____________ State:
_____ Zip Code: ________________ Telephone Work:_________________________ Home: ______________________________
Contractors Name: _______________________________ License no.:_________________
Address: __________________________________________ City: ___________________
State: _____ Zip Code: ________________ Telephone Work: ______________________ Home: ______________________________
made this date, __________________, between the above mentioned Homeowner
(Owner) and Contractor, is for the rehabilitation of the property located at
______________ ______________________that has been approved for FHA mortgage
insurance under Section 203(k) of the National Housing Act. The Owner(s) shall
pay the Contractor the sum of $__________ for completion of the work, including
all sales tax due by law, together with such increases or decreases in the
contract price as may be approved in writing by the Lender. The work will begin
within 30 days of loan closing with the Lender and will be completed by
______________________, unless delayed beyond the Contractor's control. The
General Provisions listed below are made a part of this Agreement. The contract
documents consist of the architectural exhibits listed in the Rehabilitation
Loan Agreement between the Owner(s) and the Lender, or as described below (or on
an attached sheet):
Owner(s) Signature(s) and Date
Contractor's Signature and Date
1. Contract Documents: This Agreement includes all general provisions, special
provisions and architectural exhibits that were accepted by the lender. Work
not covered by this agreement will not be required unless it is required by
reasonable inference as being necessary to produce the intended result. By
executing this Agreement, the contractor represents that he/she has visited the
site and understands local conditions, including state and local building
regulations and conditions under which the work is to be performed. 2. Owner:
Unless otherwise provided for in the Agreement, the owner will secure and pay
for necessary easements, exceptions from zoning requirements, or other actions
which must precede the approval of a permit for this project. If owner fails to
do so then the contract is void. If the contractor fails to correct defective
work or persistently fails to carry out the work in accordance with the
agreement or general provisions, the owner may order the contractor in writing
to stop such work, or a part of the work, until the cause for the order has been
2. Contractor: The contractor will supervise and direct the work and the work
of all subcontractors. He/she will use the best skill and attention and will be
solely responsible for all construction methods and materials and for
coordinating all portions of the work. Unless otherwise specified in the
Agreement, the contractor will provide for and/or pay for all labor, materials,
equipment, tools, machinery, transportation, and other goods, facilities, and
services necessary for the proper execution and completion of the work. The
contractor will maintain order and discipline among employees and will not
assign anyone unfit for the task. The contractor warrants to the owner that all
materials and equipment incorporated are new and that all work will be of good
quality and free of defects or faults. The contractor will pay all sales, use
and other taxes related to the work and will secure and pay for building permits
and/or other permits, fees, inspections and licenses necessary for the
completion of the work unless otherwise specified in the Agreement. The
contractor will indemnify and hold harmless the owner from and against all
claim, damages, losses, expenses, legal fees or other costs arising or resulting
from the contractors performance of the work or provisions of this section. The
contractor will comply with all rules, regulations, laws, ordinances and orders
of any public authority or HUD inspector bearing on the performance of the work.
The contractor is responsible for, and indemnifies the Owner against, acts and
omissions of employees, subcontractors and their employees, or others performing
the work under this Agreement with the contractor. The contractor will provide
shop drawings, samples, product data or other information provided for in this
Agreement, where necessary.
3. Subcontractor: Selected by the contractor, except that the contractor will
not employ any subcontractor to whom the owner may have a reasonable objection,
nor will the contractor be required by the owner to employ any subcontractor to
whom the contractor has a reasonable objection.
4. Work By Owner or Other Contractor: The owner reserves the right to perform
work related to the project, but which is not a part of this Agreement, and to
award separate contracts in connection with other portions of the project not
detailed in this Agreement. All contractors and subcontractors will be afforded
reasonable opportunity for the storage of materials and equipment by the owner
and by each other. Any costs arising by defective or ill-timed work will be
borne by the responsible party.
5. Binding Arbitration: Claims or disputes relating to the Agreement or
General Provisions will be resolved by the Construction Industry Arbitration
Rules of the American Arbitration Association (AAA) unless both parties mutually
agree to other methods. The notice of the demand for arbitration must be filed
in writing with the other party to this Agreement and with the AAA and must be
made in a reasonable time after the dispute has arisen. The award rendered by
the arbitrator(s) will be considered final and judgment may be entered upon it
in accordance with applicable law in any court having jurisdiction thereof.
6. Cleanup and Trash Removal: The contractor will keep the owner’s residence
free from waste or rubbish resulting from the work. All waste, rubbish, tools,
construction materials, and machinery will be removed promptly after completion
of the work by the contractor.
7. Time: With respect to the scheduled completion of the work, time is of the
essence. If the contractor is delayed at anytime in the progress of the work by
change orders, fire, labor disputes, acts of God or other causes beyond the
contractor's control, the completion schedule for the work or affected parts of
the work may be extended by the same amount of time caused by the delay. The
contractor must begin work no later than 30 days after loan dosing and will not
cease work for more than 30 consecutive days.
8. Payments and Completion: Payments may be withheld because of. (1)
defective work not remedied; (2) failure of contractor to make proper payments
to subcontractors, workers, or suppliers; (3) persistent failure to carry out
work in accordance with this Agreement or these general conditions, or (4) legal
claims. Final payment will be due after complete release of any and all liens
arising out of the contract or submission of receipts or other evidence of
payment covering all subcontractors or suppliers who could file such a lien.
The contractor agrees to indemnify the Owner against such liens and will refund
all monies including costs and reasonable attorney's fees paid by the owner in
discharging the liens. A 10 percent holdback is required by the lender to
assure the work has been properly completed and there are no liens on the
19. Protection of Property and Persons: The contractor is responsible for
initiating. maintaining, and supervising all necessary or required safety
programs. The contractor must comply with all applicable laws, regulations,
ordinances, orders or laws of federal, state, county or local governments. The
contractor will indemnify the owner for all property loss or damage to the owner
caused by his/ her employees or his/her direct or subtier subcontractors.
10. Insurance: The contractor will purchase and maintain such insurance
necessary to protect from claims under workers compensation and from any damage
to the owner(s) property resulting from the conduct of this contract.
11. Changes in the Contract: The owner may order changes, additions or
modifications (using form HUD-92577) without invalidating the contract. Such
changes must be in writing and signed by the owner and accepted by the lender.
Not all change order requests may be accepted by the lender, therefore, the
contractor proceeds at his/her own risk if work is completed without an accepted
12. Correction of Deficiencies: The contractor must correct promptly any work
of his/her own or his/her subcontractors found to be defective or not complying
with the terms of the contract.
13. Warranty: The contractor will provide a one-year warranty on all labor and
materials used in the rehabilitation of the property. This warranty must extend
one year from the date of completion of the contract or longer if prescribed by
law unless otherwise specified by other terms of this contract. Disputes will
be resolved through the Construction Industry Arbitration Rules of the American
14. Termination: If the owner fails to make a payment under the terms of this
Agreement, through no fault of the contractor, the contractor may, upon ten
working days written notice to the owner, and if not satisfied, terminate this
Agreement. The owner will be responsible for paying the contractor for all work
completed. If the contractor fails or neglects to carry out the terms of the
contract, the owner, after ten working days written notice to the contractor,
may terminate this Agreement.
For informational purposes only-Consult Legal
Counsel prior to using any documents
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