Tips for Drafting Construction Contracts in Areas with an HOA

Dealing with a Homeowners association can create extra hurdles in your construction project. Whenever building in an HOA area, certain clauses need to be added to construction contracts. These terms will offer you protection, as well as protection to the HOA.

Here are tips for Drafting Construction Contracts in Areas with an HOA

Insurance Protection

All contractors are responsible to have workman’s compensation insurance along with general liability insurance. The HOA should be added to the insurance policy under additional insured parties. This should allow coverage throughout the work period. The insurance must also cover all the work that is planned for the construction project.

Contractor License

Of course, all contractors should be licensed as well. In the contract, make sure the true legal name of the licensed contractor is listed. The license should be in good standing with the state. All of the details will matter, so list all contractors and their licenses in the contract.

Warranty Details

Speaking of details, a contract can never be too detailed. Details surrounding warranties should be included in the contract as well. This includes a warranty on all labor and materials. The warranty details should include the duration and scope of the warranty, along with what it protects against.

Include Deadlines

Completion deadlines should always be included in construction contracts, especially when dealing with areas with an HOA. A clause should also be added to include any penalties for late completion.

Termination Clause

If at any time a party breaches the contract, there should be a clause in the contract that states that a party can terminate the contract. This means that anytime a party fails to meet the contract standards, the entire contract can be voided.

Are you working on a construction project? Speak with a construction lawyer in Phoenix to receive guidance and advice on contracts, disputes, and more. Construction projects contain many pieces and a lawyer can help you keep the pieces together!

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