What you need to know before signing a new construction contract

On Behalf of | Jul 31, 2017 | Residential Real Estate

Buying a home or signing a contract for a new construction home is an exciting time for your New York family, but it is crucial to know how to protect your rights during this process. Forging ahead without knowing how to protect yourself is not prudent; therefore, you should avoid complications and issues by taking certain precautionary measures.

You would be wise to ensure that you have a thorough, well-drafted construction contract before you sign any agreement. Failure to completely read the contract or understand the terms could be a source of financial and legal complications if there are issues with the construction of your new home.

Have the right information before you sign

Constructing a home can be a complicated process, and it can take months to complete. Over the course of the project, things can happen and problems can arise, and your contract should include provisions to address these concerns and clearly outline expectations. Before you sign your construction contract, consider specifically addressing the following elements:

  • State how long the project will take and the length of time the contract will be valid
  • Have clear outline of the prices associated with the construction project
  • List reasonable late payment penalties
  • Outline how disputes will be resolved
  • List how to address reasonably foreseeable problems and delays

If the two parties are unable to agree on the terms of an agreement before signing, it may be possible to have a temporary contract instead. However, it should be very clear that the contract is only temporary and that a permanent one will eventually come into effect.

Construction projects are complex, and signers should carefully consider and review any contract before signing. The effort to review and thoughtfully draft any agreement can be financially and legally beneficial in the future in case of a dispute. When it comes to your new home, vigilance and caution are in your best interests.

Complex contracts may require professional guidance

Any type of residential real estate transaction is complex, and much is at stake. You do not have to allow issues with new construction to impact your dream of owning a new home. You can protect yourself and your investment by reaching out for help as soon as possible in the transaction process.

A strong construction contract and having the right information can safeguard you against the ramifications of construction defects and other issues. Before you sign, you would be wise to make sure of your protection and the security of your interests.