AGREEMENT FOR THE RENOVATION

OF A RESIDENTIAL DWELLING

Fixed Price Basis With Limited Warranty

This document and the exhibits and attachments are not final or complete instruments, they include several options which may be included or deleted, and should not be executed in their present form. The HBAA and its local chapters do not assume any liability for damages arising from the use of this document and the exhibits and attachments thereto and give no opinion that any of the terms and conditions in this document and the exhibits and attachments should be accepted by the parties in a particular transaction. Terms and conditions should be negotiated between the parties based upon the respective interests, objectives, and bargaining positions of all interested parties. Seek specific legal advice from your lawyer.

This AGREEMENT FOR THE RENOVATION OF A RESIDENTIAL DWELLING (hereinafter “this Agreement”) is hereby bargained for, made, and entered into on the day of , 20 , by and between

(hereinafter referred to as “Contractor”) and ____________________________________________________________________ (hereinafter, whether one or more, referred to as “Owner”).

W I T N E S S E T H :

Owner holds legal title to the following described real property (the “Land”) situated in County, Alabama, and more particularly described as follows:

Address:

Legal description:

(See attached Exhibit I for legal description of the Land if not inserted in the above space.)

together with all improvements thereon, if any (the Land and said improvements hereinafter referred to together as the “Property”). Owner has requested that Contractor renovate a residential dwelling (the “Dwelling”) on the Property in accordance with the provisions of this Agreement. As a part of the negotiation of the terms and provisions of this Agreement, Owner and Contractor have negotiated between themselves the terms and provisions of a Limited Warranty Agreement and [Insert here one, but only one, of either “a Preoccupancy Inspection Agreement as described herein below” or “Acknowledgment of Acceptance as described herein below” and remove as an exhibit the one that was not selected].

NOW, THEREFORE, in consideration of the foregoing recitals, the agreements contained herein and attached hereto, the provisions of the Limited Warranty Agreement, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Owner and Contractor do hereby agree as follows:

Renovation of the Dwelling/Plans and Specifications. Contractor hereby agrees to renovate the Dwelling on the Property in accordance with provisions of this Agreement and the Limited Warranty Agreement and in general conformity with the Plans and Specifications attached hereto as, or identified on, the attached Exhibit A and incorporated herein by reference (hereinafter the “Renovation Work”). The Plans and Specifications have been signed and dated simultaneously with the execution of this Agreement by both the Contractor and Owner. Any changes in the Plans and Specifications which have been agreed upon by both the Contractor and Owner have been clearly shown and initialed by both the Contractor and Owner. The Renovation Work shall not include the repair, replacement, or remedy of any existing condition of the Dwelling which is not specifically included in the Plans and Specifications, and Contractor shall have no responsibility or obligation with respect thereto.

Date of Commencement and Substantial Completion. Contractor shall commence the Renovation Work on or before the day of , 20 (the “Commencement Date”) and shall cause the Renovation Work to be substantially complete on or before the day of , 20 (hereinafter the “Completion Date”), subject to such extensions of the Completion Date as might occur pursuant to the provisions of this Agreement. The Renovation Work shall be deemed completed upon the issuance of a Certificate of Occupancy by the applicable governmental building inspection department, if there is such a department in the jurisdiction in which the Property is located, and, if no such department exists, then upon the reasonable determination by the Contractor that the Renovation Work is substantially complete and ready for occupancy.

Consideration. Owner shall pay to Contractor in current funds for the Renovation Work by Contractor the sum of Dollars ($ ) (the “Consideration”), subject to increase as permitted by the provisions of this Agreement. The consideration shall include the following items:

Wages of renovation workers directly employed by Contractor to perform the Renovation Work, including welfare, unemployment compensation, worker’s compensation, social security, and other benefits.

Costs, including transportation, of materials and equipment incorporated or to be incorporated in the completion of the Renovation Work; all discounts for cash or prompt payment shall accrue to Contractor.

Payments made by Contractor to all subcontractors in accordance with the requirements of the subcontracts.

Cost of all materials, temporary facilities, equipment, and hand tools not customarily owned by the renovation workers, which are provided by Contractor at the site and fully consumed in the performance of the Renovation Work.

Rental costs for necessary temporary facilities, machinery, equipment, and hand tools used at the site of the Dwelling.

That portion directly attributable to this Agreement of premiums for insurance and bonds.

Costs of removal of debris from the site.

Costs of building permits, fees for access to and consumption of water, sewer, electric power, gas, telephone, and other utilities and costs of any other governmental or private licenses or permits necessary to the Renovation Work.

Costs of surveys of the Property and with respect to the location of the Dwelling during renovation.

Other costs:

The Consideration shall not include the following items, which shall be paid by Owner in addition to the Consideration:

Losses and expenses not compensated by insurance or otherwise, sustained by Contractor in connection with the Renovation Work, provided they have resulted from causes other than default or neglect of Contractor.

Costs incurred in taking action to prevent threatened damage, injury, or loss in case of any emergency affecting the safety of persons and property, which is not the result of the default or neglect of Contractor.

Costs incurred by Contractor as the result of changes in the Plans and Specifications, as permitted by the provisions of this Agreement.

Increases in the Consideration or other costs to be paid by Owner as the result of rock or other subsurface conditions or as otherwise provided by the provisions of this Agreement.

Other costs:

Discounts, Rebates, and Refunds. Cash discounts obtained on payments made by Contractor and trade discounts, rebates, refunds, and amounts received from sales of surplus materials and equipment shall accrue to Contractor.

Payment of Consideration. Owner shall pay to Contractor, on or before the day of , 20 , the sum of Dollars ($ ) (the “Advance Payment”) toward the Consideration. The Advance Payment shall be credited against the final payment to be made by Owner to Contractor as described later in this paragraph. Contractor shall send an invoice to Owner on a weekly, bi-monthly, or monthly basis, as determined by Contractor, setting forth the portion of the Consideration that Contractor determines to be payable for the Renovation Work performed and materials ordered or supplied as of the date of the invoice, together with such portion of the Consideration as has been allocated by Contractor for overhead and profit and included in the amount of the invoice. Owner shall make payment to Contractor in the amount of the invoice no later than three (3) days after the delivery of same by Contractor to Owner. Payments not made on or before said due date shall bear interest from the due date at the rate of percent ( %) per annum together with a late penalty equal to percent ( %) of the amount of the delinquent payment. The final payment of the entire unpaid balance of the Consideration shall be paid by Owner to Contractor upon the issuance of a Certificate of Occupancy by the applicable governmental building inspection department, if there is such a department in the jurisdiction in which the Property is located, and, if no such department exists, then upon the reasonable determination by Contractor that the Renovation Work is complete, except for the responsibilities of Contractor pursuant to the provisions of the Limited Warranty Agreement.

Owner’s Representations and Warranties. Owner hereby represents and warrants unto Contractor as follows:

Owner has good, clear, free, unencumbered fee simple title to the Property and the unrestricted right and authority to enter into this Agreement;

There are no parties other than Owner in possession of any portion of the Property and there are no disputes with respect to the boundary line or title to the Property;

There are no pending or threatened condemnation proceedings with respect to the Property or any portion thereof;

The performance of the Renovation Work in accordance with the Plans and Specifications will not violate any applicable governmental laws, rules or regulations or any private restrictions, covenants, or other such agreements affecting the Property and will not encroach outside the boundary lines of the Property or within any applicable building setback lines, easements, or rights-of-way;

The Property is free of any environmental hazards or materials or substances which would cause the Property to be in violation of any federal, state, or local environmental laws, rules, or regulations.

Changes to Plans and Specifications. If Contractor has agreed to renovate the Dwelling or complete the Renovation Work in general conformity with Plans and Specifications, then Contractor shall be under no obligation to make any changes, additions or alterations to the Plans and Specifications. Contractor may elect to make changes, additions or alterations to the Plans and Specifications upon the request of Owner; however, Contractor shall not be obligated to do so. In the event that Contractor and Owner agree upon changes, additions or alterations to the Plans and Specifications, then such agreement shall become effective only upon the execution by both Contractor and Owner of a written change order, in a form which is acceptable to Contractor and which sets forth the changes to be made and the increase in the Consideration to be paid by Owner to Contractor in connection therewith, and the payment by Owner to Contractor of such portion of said increase in the Consideration as shall be required by Contractor. Any such increase in the Consideration shall be non-refundable. Contractor shall not be obligated to agree to any such changes, additions or alterations to the Plans and Specifications and may condition any such agreement upon such matters as Contractor shall, in sole discretion of Contractor, determine, including, but not limited to, an increase in the Consideration, and the approval of such changes by Owner’s lender and the local building inspection officials, if any. In the event that Contractor agrees to such changes and has not received all of the increase in the Consideration to be paid in connection therewith, then the balance of said increase in the Consideration shall be paid as a part of the final payment of the Consideration in accordance with the provisions of paragraph:5. Notwithstanding the foregoing, Contractor shall have the right to make such changes, additions, or alterations to the Plans and Specifications as shall be required by any governmental officials who have jurisdiction or authority over the Renovation Work, or to cause the Renovation Work to be in compliance with any applicable building codes or other applicable governmental laws, rules, or regulations, without notice to or approval by Owner, and to charge to Owner the costs incurred by Contractor in connection therewith, together with percent ( %) of said costs for Contractor’s overhead and profit, which sums shall be paid by Owner to Contractor in addition to the Consideration, immediately upon Contractor’s invoice to Owner for said sums.

Decorating Allowance. Contractor may allow Owner to select some or all of the decorating items to be incorporated into the Renovation Work. Such items may include brick, paint colors, roof colors, light fixtures, wall paper, and floor covering for which Contractor shall establish allowances. Owner shall make such selections within seven (7) working days after the request by Contractor. If selections of Owner exceed the amount of allowances established by Contractor, then Owner shall pay such portion of any such excess as shall be required by Contractor at the time of making the selections, and the balance, if any, shall be paid together with the final payment of the Consideration, and said additional payments shall not be limited in any manner by the Consideration. The allowances established by Contractor and which have been used to determine the Consideration are attached hereto as Exhibit B. In no event shall the Consideration be reduced as the result of the expenditure of less than the allowance for any particular item.

Condition of the Land.

Owner hereby affirms that, before signing this Agreement, Owner has personally walked upon and inspected the Land. Owner represents that Owner or its representatives have conducted such engineering studies, site investigations and analyses (including soil tests) as Owner deems desirable to determine whether the soil or other conditions of the Land are acceptable to Owner. Owner acknowledges and agrees that Owner has received no representation or warranty from Contractor with respect to the condition of the Land and that Contractor shall not in any manner be responsible for the condition thereof.

Owner waives all claims, present and future, against Contractor and Contractor’s agents, employees, successors, assigns, members, owners, managers, partners, officers and contractors based upon or connected with the condition of the Land and hereby releases Contractor and Contractor’s agents, employees, successors, assigns, members, owners, managers, partners, officers and contractors from any liability whatsoever therefor.

Owner acknowledges that Owner has been advised to investigate the purchase of insurance for protection in the event of earthquakes or sinkholes and that Contractor has made no representation or warranty with respect to the availability of such insurance coverage.

The Consideration does not include any costs or contingencies for rock or other abnormal surface conditions, and Owner shall be responsible for the costs of correcting any such conditions. Should such abnormal conditions be encountered on the building site in connection with foundations and footing excavation or installation of sewer lines, on-site sewage disposal systems, water lines, or other utility services, Contractor shall promptly inform Owner of same and estimated costs of the additional work. Such costs may include, but are not necessarily limited to, blasting expenses, jack hammer and drill operations. The actual costs will be reflected in an increase in the Consideration.

Maintenance and Prevention of Moisture-Related Conditions.

Owner hereby acknowledges and agrees that, upon the completion of the Renovation Work and occupancy of the Property by Owner: (i) it shall be the responsibility and obligation of Owner to maintain the Property, including the Dwelling and all components thereof, in good condition and repair, including all caulking, water seals, exterior surfaces and finishes, mortar, water pipes, drainage systems, HVAC pipes and systems, basement and crawl space areas, gutters, roofs, and landscaping, for the prevention of water penetration, mildew, mold, spores, fungi, damage to wood and other materials, and other moisture-related conditions; (ii) the failure to do so could result in health-related problems and/or damage to the Property; (iii) Contractor shall have no liability or responsibility with respect to same; and (iv) Owner hereby waives and disclaims any claims against Contractor arising out of any such condition and any loss, damage, or injury resulting therefrom.

Owner further acknowledges and agrees that: (i) if Owner becomes aware of water intrusion into the Property, Owner should respond immediately; (ii) in cases of serious water damage, Owner should hire construction and indoor air quality consultants to assess the damage and determine what remediation is needed; (iii) inadequate remediation, even if well-intentioned, will only create more problems; (iv) water damaged materials may need to be removed, and the source of the water intrusion should be addressed; (v) the Property may have to be vacated while remediation work is in progress; and (vi) a certified industrial hygienist experienced with testing for molds in indoor environments should be retained to determine whether the water damage has caused a source of mold growth and amplification.

Owner further acknowledges and agrees that: (i) unusual odors should also be investigated promptly; (ii) unusual odors may be indicative of water intrusion and mold growth; and (iii) chronic complaints of illness (especially respiratory, breathing, or allergy-type problems), headaches or nausea may indicate indoor air quality problems and should be taken seriously and investigated promptly.

Extension of the Completion Date/Delivery of Possession. The Completion Date may be extended by Contractor for such additional time as Contractor shall determine to be reasonably necessary as the result of (a) any delay in the approval of Owner’s renovation or permanent loan, if any; or (b) any delays in the progress of the Renovation Work due to items such as, but not limited to, inclement weather, acts of war or terrorism, changes in the Plans and Specifications, requirements of any building officials or other governing authorities, work stoppages, delays in the delivery of materials, contingencies under this Agreement, if any, the completion of the preoccupancy inspection and any additional work required as the result thereof, and any other matters which might delay the completion of the Renovation Work; or (c) as a result of any delay caused by the failure or interruption of systems used by Contractor or systems used by third parties upon whom Contractor relies or any other system where such failures or interruptions are caused, in whole or in part, directly or indirectly, by the inability of such systems to accurately calculate, compare, extract, sequence, display, accept, process, store, reserve, and provide date data in a manner that is consistently correct and accurate, regardless of the date data input, the functions requested, the date data output requested, or the date upon which the date data is input, processed, or output; or (d) as a result of any damage or destruction to all or any portion of the Property as the result of fire, storm, or other casualty. In the event of the delay of the Completion Date pursuant to the foregoing provisions, then the Completion Date shall be that date which has been established in a written notice from Contractor to Owner provided that such date is no less than ten (10) days after the date of such notice. Pending the substantial completion of the Renovation Work and the payment in full by Owner to Contractor of the Consideration, possession of the Dwelling shall be [Insert here either “maintained by Contractor” or “maintained by Owner subject to the right of Contractor to such possession as is necessary to complete the Renovation Work” or such other agreement as to possession as is negotiated with Owner.] Possession of the Property by Contractor shall be delivered to Owner upon the payment in full of the entire amount of the Consideration and any other sums payable by Owner under this Agreement.

Insurance. A policy of insurance for protection from claims under Workers’ or Workmen’s Compensation Acts and other employee benefit acts which are applicable, claims for damages because of bodily injury, including death, and from claims for damages to property (other than to the Dwelling) which may arise out of or result from Contractor’s operations under this Agreement, whether such operations be by Contractor or by a subcontractor or anyone directly or indirectly employed by either of them, shall be purchased and maintained by Contractor, and the cost thereof shall be included in the Consideration. The limits of liability under said policy of insurance shall be not less than Dollars ($ ). Owner shall be responsible for purchasing and maintaining a policy of insurance with respect to the Dwelling and the Property insuring both Owner and Contractor against general liability in the amount of not less than Dollars ($ ), and against the perils of fire and all other hazards and physical loss or damage including, without limitation, theft, vandalism, and malicious mischief, said policy to be on an all risk policy form and to include extended coverage in the full insurable value of the Dwelling, the Property, and the improvements to be made thereto pursuant to the provisions of this Agreement. Owner and Contractor shall each provide to the other copies of certificates from the insurance companies evidencing the existence of the policies to be purchased pursuant to this paragraph.

Storage of Materials. If Owner provides space within the Dwelling or curtilage for the storage of Contractor’s materials, Owner shall be liable for theft, damage, or loss caused by Owner or Owner’s invitees, licensees, or trespassers, if Owner knows or should know of such trespassers.

Evidence of Title. A report of the status of the title to the Property, in such form as might be acceptable to Contractor, shall be provided by Owner, at the expense of Owner. Said title report shall reflect the status of record title to the Property and shall include legible copies of all easements, restrictions, rights-of-way, exceptions, encumbrances and other matters affecting title to the Property. A copy of said report together with legible copies of said exceptions and other such matters shall be delivered to Contractor on or before the Commencement Date. The obligations of Contractor hereunder are subject to the approval by Contractor of the form and substance of the title report.

Termite Contract/Termite Bond. Owner shall be responsible for purchasing such termite or wood infestation reports, termite treatment contracts, or termite bonds as Owner deems appropriate, if any, at the expense of Owner. Any such report, contract, or bond, if any, which is provided by Contractor shall be accepted by Owner without representation, obligation, or warranty from Contractor, and Owner hereby acknowledges and agrees that Owner shall determine whether any such report, contract, or bond provides sufficient protection of Owner’s interests, and Owner shall look solely to the issuer of any such report, contract, or bond with respect to any representations, agreements, or obligations therein contained.

Time Is Of The Essence. TIME IS OF THE ESSENCE with respect to the obligation of Owner to make payments to Contractor toward the Consideration within the time required pursuant to this Agreement.

Disclaimer. Owner further acknowledges that Owner has not relied upon any advice or representations of Contractor or any person associated therewith relative to (i) the legal or tax consequences of this Agreement; (ii) the structural or other condition of the Property; (iii) the investment or resale value of the Property as the result of the renovations to be made pursuant to this Agreement; (iv) subsurface conditions, including radon and other potentially hazardous materials and/or gases; or (v) any other matters affecting Owner’s willingness to enter into this Agreement on the terms and conditions herein set forth. Owner acknowledges that if such matters are of concern to Owner in the decision to enter into this Agreement, Owner has sought and obtained independent advice relative thereto.

Insulation. Any living area ceilings to be constructed under the Plans and Specifications will be installed with type insulation to a thickness of inches, which thickness, according to its manufacturer, will (in either case) result in an R-Value of . Any living area exterior walls to be constructed under the Plans and Specifications will be insulated with type insulation to a thickness of inches, which thickness, according to the manufacturer, will result in an R-Value of . Owner acknowledges and agrees that, in accordance with Federal Trade Commission Regulations, this information has been supplied by the installer of the insulation and has not been determined by Contractor. Owner acknowledges and agrees that Contractor shall have no liability or obligation with respect to the accuracy of the information included in this paragraph.

Existing Improvements. Contractor has made no assessment of the condition of the existing improvements that comprise the Dwelling. Contractor shall have no responsibility to correct any defects in the existing improvements comprising the Dwelling or make any repairs or alterations thereto, except as specifically set forth in the Plans and Specifications. In the event of any condition of the existing improvements comprising the Dwelling which is defective or requires alteration or repair in order to accomplish the renovations or additions to be accomplished pursuant to the Plans and Specifications, Owner shall be responsible, at the expense of Owner, to cause such defect or condition to be repaired or otherwise remedied in such manner as will facilitate the completion of the work by Contractor pursuant to the Plans and Specifications, comply with all applicable governmental codes and regulations, and as will otherwise be reasonably acceptable to Contractor.

Casualty Loss. In the event of any damage or destruction to all or any portion of the Property as the result of fire, storm, or other casualty, then Contractor shall have the right, at the election of Contractor, to either (a) extend the Completion Date as necessary to permit Contractor to remedy any such damage and complete the Renovation Work, in which event Contractor shall be paid the additional costs and fees (including Contractor’s overhead and profit) as shall be determined by Contractor to be necessary to remedy such damage, or (b) terminate this Agreement, whereupon Owner shall pay to Contractor the balance of the Consideration and other sums owing to Contractor for the portions of the Renovation Work completed as of the occurrence of the damage, including costs incurred by Contractor for materials, supplies, and other items ordered, acquired, or delivered to the Property, including the Contractor’s overhead and profit associated therewith, and Contractor shall be relieved of any obligation to complete the Renovation Work.

Arbitration. Contractor and Owner acknowledge and agree that this transaction substantially affects interstate commerce by virtue of the materials and components contained in the Renovation Work. Any controversy, claim, or dispute arising out of or relating to this Agreement, or the breach thereof, or the transaction contemplated hereby, shall be settled by binding arbitration, pursuant to the Federal Arbitration Act, 9 USC § 1, et seq., and shall be administered in accordance with the applicable rules of [Insert here an arbitration option of your choice, such as “The Construction Industry Rules of the American Arbitration Association” or “the Better Business Bureau of (Insert here the designation of your local Better Business Bureau)” or such other system as you might prefer]. Judgment on the award rendered by the arbitrators may be entered in any court having jurisdiction thereof.

Notices. Any notices to be given pursuant to the provisions of this Agreement shall be in writing and shall be deemed received by the party to whom given when deposited in the United States Mail, by certified mail, with postage pre-paid, and addressed as follows:

When to Contractor:
When to Owner:

The address of a party may be changed by written notice to the other party in the manner described above.

Default.

By Contractor: If this transaction is not concluded because of the material default of Contractor in the performance of the obligations of Contractor pursuant to this Agreement, and if said default is not remedied within thirty (30) days after written notice from Owner to Contractor setting forth the details of the default and demanding that the default be remedied (or within such reasonable period of time as may be necessary to remedy the default in the event that thirty (30) days is not a sufficient time, provided that Contractor is diligently pursuing the remedy of any such default), then Owner shall have the right to terminate this Agreement upon payment by Owner to Contractor the portion of the Consideration for all work performed and all costs incurred by Contractor as of the date of termination, whereupon this Agreement shall be deemed terminated and both Contractor and Owner shall be relieved of any further obligations hereunder. This shall be the sole remedy available to Owner in the event of a default by Contractor.

By Owner: In the event of default by Owner in the performance of the obligations of Owner under this Agreement, and should said default not be remedied within ten (10) days after written notice from Contractor to Owner setting forth the details of the default and demanding that the default be remedied, then, at the election of Contractor, (a) Contractor shall retain all sums paid to Contractor by Owner pursuant to this Agreement including, but not limited to, the Advance Payment, any sums with respect to changes in the Plans and Specifications, any sums with respect to allowance overages, and any other sums, as liquidated damages, whereupon this Agreement shall be deemed terminated and both Contractor and Owner shall be relieved of any further obligations hereunder; or (b) Contractor shall have the right to retain all sums paid to Contractor, as aforesaid, by Owner, which sums shall be applied toward the actual damages of Contractor, and Contractor shall be entitled to recover from Owner such portion of the balance of the Consideration that Contractor determines to be applicable to the work performed by Contractor, and the entire balance of that portion of the Consideration allocated by Contractor toward Contractor’s overhead and profit, together with damages incurred by Contractor; or (c) Contractor shall have the right to retain all sums paid to Contractor, as aforesaid, by Owner, and Contractor shall have the right to pursue, in addition to the retainage of said sums, equitable relief against Owner, including the remedy of specific performance together with the recovery of Contractor’s attorney’s fees and costs; or (d) Contractor shall have the right to pursue any one or more of the foregoing or any other remedies available to Contractor under applicable law together with the recovery of Contractor’s attorney’s fees and costs and the pursuit of any one or more of said remedies shall not be deemed a waiver of the right to pursue any other remedies.

General Provisions.

If any provision of this Agreement is determined by a court of competent jurisdiction to be unenforceable, that determination will not affect the enforceability of the remaining portions.

This Agreement shall be binding upon Contractor and Owner, and their respective heirs, executors, administrators, successors and assigns.

This Agreement shall be governed by and construed in accordance with the laws of the State of Alabama.

The titles or headings to the paragraphs included herein are for convenience only and shall not add to, reduce, limit or modify in any manner the content thereof.

The use of one gender shall include all other genders, the use of singular shall include the plural, and the use of the plural shall include the singular, all as may be appropriate to the context in which they are used.

The rights of Owner hereunder may not be assigned by Owner without the written consent of Contractor, which consent may be withheld in the sole discretion of Contractor.

Limited Warranty/Preoccupancy Inspection. Owner and Contractor agree to the terms and conditions of the Limited Warranty Agreement attached hereto as Exhibit C and made a part of this Agreement. The terms and provisions of the Limited Warranty Agreement have been fully negotiated between Owner and Contractor as a part of the negotiation of the terms and provisions of this Agreement. The Limited Warranty Agreement has been fully executed, as of the date of this Agreement, and the terms and provisions thereof are an integral part of the terms and provisions of this Agreement. Owner and Contractor agree to re-execute the Limited Warranty Agreement and to deliver duplicate originals of same at the time of the payment of the final payment of the balance of the Consideration. Owner and Contractor agree to be fully bound by the terms and provisions of the Limited Warranty Agreement and agree that the Limited Warranty Agreement shall survive the final payment of the Consideration. Pursuant to the Limited Warranty Agreement, Owner and Contractor shall make a preoccupancy inspection of the Renovation Work and shall [Insert here one, but only one, of either “complete and execute the Preoccupancy Inspection Agreement” or “execute the Acknowledgment of Acceptance”] which is attached as an exhibit to the Limited Warranty Agreement.

Duration of Limited Warranty. Contractor and Owner have negotiated and agreed upon the Limited Warranty Period, as defined in paragraph 1 of the Limited Warranty Agreement, and acknowledge that the duration of the Limited Warranty Period, as negotiated between Contractor and Owner, has been material to the amount of the Consideration and the other terms and conditions set forth in this Agreement.

Exclusion from Limited Warranty. The Limited Warranty Agreement shall not include or in any manner extend to the condition of any portion of the Dwelling immediately prior to the commencement by Contractor of the Renovation Work, nor to any defect in the Renovation Work which is caused, in whole or in part, by the pre-existing condition of any portion of the Dwelling.

Owner’s Acknowledgment. Owner hereby acknowledges that Contractor has offered to agree to a Limited Warranty Period of greater duration than that which is set forth in paragraph 1 of the Limited Warranty Agreement and that, rather than accepting the longer duration of the Limited Warranty Period, Owner has preferred to reduce the amount of the Consideration, to the amount thereof which is set forth in this Agreement, and accept the Limited Warranty Period of the duration set forth in paragraph 1 of the Limited Warranty Agreement.

[If you want to offer different durations of the Limited Warranty Period based upon appropriate revisions to the Consideration, then this subparagraph (c) or a provision similar thereto might be included in your contract documents; otherwise, the foregoing subparagraph (c) should be deleted.]

WAIVER OF WARRANTIES AND CLAIMS. OWNER AGREES THAT THE LIMITED WARRANTY AGREEMENT IS GIVEN IN LIEU OF ANY AND ALL OTHER WARRANTIES, EXPRESSED OR IMPLIED, INCLUDING, BUT NOT LIMITED TO, ANY IMPLIED WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, HABITABILITY AND WORKMANSHIP, AND IS ALSO IN LIEU OF ANY CLAIMS FOR CONSEQUENTIAL DAMAGES, MENTAL ANGUISH OR DISTRESS, AND FOR DAMAGES BASED UPON NEGLIGENCE, AND OWNER HEREBY EXPRESSLY WAIVES AND DISCLAIMS ALL SUCH OTHER WARRANTIES AND CLAIMS WITH RESPECT TO THE RENOVATION WORK.

Owner acknowledges that Owner has read, understood, and accepted the foregoing.

Additional Provisions.

Entire Agreement. This Agreement and the Limited Warranty Agreement, together with all of the other exhibits and attachments to this Agreement and the Limited Warranty Agreement, constitute the entire agreement of the parties, and Owner acknowledges that Owner has not relied upon any oral or written statements, undertakings, or representations and that no prior agreement or understanding shall be valid or of any force or effect, unless the same have been fully set forth in this Agreement, the Limited Warranty Agreement, or the attachments and exhibits thereto. The covenants and agreements contained in this Agreement and the Limited Warranty Agreement cannot be altered, changed, modified, or added to, except in a written instrument signed by Owner and Contractor. No representation, inducement, understanding, or anything of any nature whatsoever made, stated, or represented by Contractor or on Contractor’s behalf, either orally or in writing (except as specifically set forth in this Agreement or in the Limited Warranty Agreement), has induced Owner to enter into this Agreement or shall be enforceable in any manner against Contractor.

IN WITNESS WHEREOF, the undersigned parties have set their hands and seals to this Agreement on this the day of , 20

CONTRACTOR:

By:

Witness	Its:

OWNER:

Witness

Witness

The HBAA and its local chapters do not assume any liability for damages arising from the use of this document and give no opinion that any of the terms and conditions in this document should be accepted by the parties in a particular transaction. Terms and conditions should be negotiated between the parties based upon the respective interests, objectives and bargaining positions of all interested parties. Seek specific legal advice from your lawyer. Copyright 2001 by the Home Contractors Association of Alabama.

EXHIBIT A

Plans and Specifications

The Plans have been prepared by

dated the day of , 20 , include pages, and have been signed and dated by Contractor and Owner.

The Specifications have been prepared by

dated the day of , 20 , include pages, and have been signed and dated by Contractor and Owner.

EXHIBIT B

Decorating Allowance

Allowance Item	Allowance Amount

EXHIBIT C

Limited Warranty Agreement

LIMITED WARRANTY AGREEMENT

(Fixed-Price Renovation Agreement)

This Limited Warranty Agreement is hereby entered into on this the day of , 20 , by

hereafter (whether one or more) referred to as Owner, and

hereafter referred to as Contractor.

WHEREAS, Contractor and Owner on this same day entered into an Agreement for the Renovation of a Residential Dwelling [Fixed Price Basis] ( the “Contract”) of which this Limited Warranty Agreement is a part, for the renovation by Contractor of a house (the “Dwelling”) located upon that certain parcel of real property located in County, Alabama, the address of which is	; and

WHEREAS, Contractor has agreed in the Contract to provide to Owner and Owner has agreed to accept this Limited Warranty Agreement with respect to the Renovation Work, as defined in the Contract, in lieu of all other warranties and claims whatsoever, whether implied by law or otherwise, subject to and as limited by the provisions of this Limited Warranty Agreement.

NOW, THEREFORE, in consideration of the premises, the agreements herein, the agreements set forth in the above mentioned Contract, the payment of the Consideration as set out in the Contract, and other good and valuable considerations, the receipt and sufficiency of which are hereby acknowledged, the parties do hereby agree to the terms and conditions of this Limited Warranty Agreement as follows:

Warranty Period. Contractor does hereby provide to Owner this Limited Warranty Agreement with respect to the Renovation Work for a period of

(the “Limited Warranty Period”) beginning on the earlier of (i) the date upon which a Certificate of Occupancy has been issued with respect to the Renovation Work by the applicable governmental building inspection department; (ii) the date upon which Contractor has reasonably determined that the Renovation Work is substantially complete and ready for occupancy (in the event that there is no governmental building inspection department with jurisdiction over the Dwelling; or (iii) the date of initial occupancy by Owner of the portion of the Dwelling upon which the Renovation Work has been performed, whichever occurs first (the “Limited Warranty Commencement Date”), and Owner does hereby agree to the terms of this Limited Warranty Agreement and further agrees to accept this Limited Warranty Agreement as the only warranty given, in lieu of all other warranties of any kind, expressed or implied, with respect to the Renovation Work. The Limited Warranty Period has been negotiated between Contractor and Owner as a part of the negotiation of the terms and provisions of the Contract.

Limited Warranty. Contractor hereby warrants to Owner that, for and during the Limited Warranty Period, the Renovation Work will be free from Latent Defects, as hereinafter defined. If a Latent Defect occurs in an item which is covered by this Limited Warranty Agreement, Contractor will repair, replace, or pay to Owner the reasonable cost of repairing or replacing any such item. Contractor shall in its sole discretion determine whether to repair, replace, or pay the reasonable cost of repairing or replacing any such item. THE LIABILITY OF CONTRACTOR IS STRICTLY LIMITED TO THE OBLIGATION TO REPAIR, REPLACE, OR PAY THE REASONABLE COST OF REPAIRING OR REPLACING ANY SUCH ITEM, AND ANY RIGHT THAT OWNER MIGHT HAVE TO RECOVER ANY OTHER OR ADDITIONAL DAMAGES IS HEREBY WAIVED AND EXCLUDED. OWNER ACKNOWLEDGES THAT THE SOLE REMEDY AVAILABLE TO OWNER HEREUNDER IS THE RIGHT TO REQUIRE CONTRACTOR TO REPAIR, REPLACE, OR PAY THE REASONABLE COST OF REPAIRING OR REPLACING ANY SUCH ITEM. Steps taken by Contractor to correct any Latent Defect under this Limited Warranty Agreement shall not extend the Limited Warranty Period.

Definition of Latent Defect. For the purposes of this Limited Warranty Agreement, a Latent Defect is defined as and limited to a defect in a necessary component in the Renovation Work which has been constructed by Contractor pursuant to the Contract and which (i) is not apparent at the Limited Warranty Commencement Date but which becomes apparent during the Limited Warranty Period; (ii) is not otherwise excluded in this Limited Warranty Agreement; (iii) results in actual physical damage to the portion of the Dwelling which has been constructed by Contractor as part of the Renovation Work; (iv) is the direct result of the failure by Contractor to perform the Renovation Work in accordance with the applicable Building Standard portion of the Building Quality Standards Section attached hereto as Exhibit I; and (v) has been set forth in detail by Owner in a written notice to Contractor prior to the expiration of the Limited Warranty Period. A Latent Defect shall not include the condition of any portion of the Dwelling immediately prior to the commencement by Contractor of the Renovation Work, nor to any defect in the Renovation Work which is caused, in whole or in part, by the pre-existing condition of any portion of the Dwelling. The responsibility of Contractor to repair or replace certain items with respect to which there might be a Latent Defect shall be as set forth in the Responsibility portion of the Building Quality Standards Section. If a specific Latent Defect is not addressed in the Building Quality Standards Section, then the applicable codes adopted by the local governing body with respect to residential renovation standards (or if no such codes have been adopted, then the standards of renovation prevailing in the geographical area of the Dwelling) will be used in lieu of the provisions of the Building Quality Standards Section. The Building Quality Standards Section lists specific defects that might occur within specified categories of the renovation and the responsibilities of Contractor and Owner with respect thereto, pursuant to the following format:

Possible Defect -	a brief statement of problems that may be encountered.

Building Standard -	a building standard relating to a specific defect.

Responsibility -	a Statement of the corrective action required of Seller to repair the defect or a statement of Buyer’s maintenance responsibilities.

[The following paragraph 3 may be used in lieu of the preceding paragraph 3 in the event that the parties desire to omit the Building Quality Standards section attached as Exhibit I and to replace that particular Building Standard with the Residential Construction Performance Guidelines for Professional Contractors and Remodelers. If the following paragraph is used instead of the preceding paragraph, then the Building Quality Standards Section will not be attached as an exhibit and Exhibit I will be either the Preoccupancy Inspection Agreement or the Acknowledgment of Acceptance.]

3.	Definition of Latent Defect. For the purposes of this Limited Warranty Agreement, a Latent Defect is defined as and limited to a defect in a necessary component in the Renovation Work which has been constructed by Contractor pursuant to the Contract and which (i) is not apparent at the Limited Warranty Commencement Date but which becomes apparent during the Limited Warranty Period; (ii) is not otherwise excluded in this Limited Warranty Agreement; (iii) results in actual physical damage to the portion of the Dwelling constructed by Contractor as part of the Renovation Work; (iv) is the direct result of the failure by Contractor to perform the Renovation Work in accordance with Residential Construction Performance Guidelines for Professional Contractors and Remodelers, latest edition, published by National Association of HomeContractors (the “Guidelines”); and (v) has been set forth in detail by Owner in a written notice to Contractor prior to the expiration of the Limited Warranty Period. A Latent Defect shall not include the condition of any portion of the Dwelling immediately prior to the commencement by Contractor of the Renovation Work, nor to any defect in the Renovation Work which is caused, in whole or in part, by the pre-existing condition of any portion of the Dwelling. The responsibility of Contractor to repair or replace certain items with respect to which there might be a Latent Defect shall be as set forth in the Guidelines. If a specific Latent Defect is not addressed in the Guidelines, then the applicable codes adopted by the local governing body with respect to residential construction standards (or if no such codes have been adopted, then the standards of construction prevailing in the geographical area of the Dwelling) will be used in lieu of the provisions of the Guidelines. The Guidelines lists specific defects that might occur within specified categories of the construction and the responsibilities of Contractor and Owner with respect thereto.

LIMITATION UPON LIABILITY. THE SOLE REMEDY AVAILABLE TO OWNER UNDER THIS LIMITED WARRANTY AGREEMENT IS THE RIGHT TO REQUIRE CONTRACTOR TO REPAIR, REPLACE, OR PAY THE REASONABLE COST OF REPAIRING OR REPLACING LATENT DEFECTS, AS HEREIN DEFINED, IN THE PORTION OF THE DWELLING CONSTRUCTED BY CONTRACTOR AS PART OF THE RENOVATION WORK. CONTRACTOR’S TOTAL LIABILITY UNDER THIS LIMITED WARRANTY AGREEMENT SHALL NOT EXCEED THE ORIGINAL CONSIDERATION PAID TO Contractor UNDER THE CONTRACT, LESS THE INCREASE IN VALUE OF THE REAL PROPERTY UPON WHICH THE DWELLING IS LOCATED AS THE RESULT OF THE PERFORMANCE OF THE RENOVATION WORK. THIS LIMITED WARRANTY AGREEMENT DOES NOT EXTEND TO OR INCLUDE LIABILITY FOR INDIRECT OR CONSEQUENTIAL DAMAGES.

Pre-Occupancy Inspection. Prior to taking possession of the portion of the Dwelling constructed or improved as part of the Renovation Work, Owner agrees to cooperate with Contractor in the completion and execution by owner of a preoccupancy inspection of the Renovation Work, and Owner will [Insert here one, but only one, of either “complete and execute the Preoccupancy Inspection Agreement” or “execute the Acknowledgment of Acceptance”] in accordance with the form attached hereto as [Insert Exhibit II if the Building Quality Standards Section is attached as Exhibit I; otherwise; insert Exhibit I], and any exceptions, omissions, or malfunctions agreed upon and noted thereon will be corrected promptly by Contractor. Contractor may elect, at the discretion of Contractor, to correct all exceptions, omissions, or malfunctions and document, with Owner, such corrections of exceptions, omissions, or malfunctions, and Contractor shall be allowed such time and access to the Dwelling as necessary to complete said corrections.

Assignment of Insurance and Warranties to Contractor. In the event Contractor repairs, replaces, or pays to Owner the reasonable cost of repairing or replacing any Latent Defect covered by this Limited Warranty Agreement which is covered by insurance or other warranties, Owner will, upon the request by Contractor, assign the products or proceeds of such insurance or warranties to Contractor to the extent of the cost to Contractor of such repair, replacement, or payment.

Exclusions and Disclaimers.

This Limited Warranty Agreement shall not extend to, include, or be applicable to (a) defects in garages, storage buildings or other outbuildings not attached to the Dwelling; swimming pools; other recreational facilities; driveways; walkways; retaining walls; fences; landscaping (including sodding, seeding, shrubs, trees, and plantings); or items furnished or installed by Owner or by parties who have dealt directly with Owner; or (b) defects which are the result of characteristics common to the materials used, such as (but not limited to) warping and deflection of wood; the presence of mildew, mold, spores, fungi, or other moisture-related conditions; fading, chalking, and checking of paint due to sunlight; cracks due to drying and curing of concrete, stucco, plaster, bricks, and masonry; shrinking and cracking of caulking and weatherstripping; or non-uniformity of appearance of brick and mortar; or (c) defects resulting from failure to perform general maintenance, including but not limited to the presence or growth of mildew, mold, spores, fungi, or other moisture-related conditions; negligence; normal wear and tear; improper maintenance; or improper operation of the Dwelling or any part of the systems in the Dwelling; and Owner hereby waives and disclaims any claim arising out of any such defects.

Owner acknowledges that Owner has read, understood, and accepted the foregoing paragraph.

This Limited Warranty Agreement shall not extend to, include or be applicable to any loss, damage, or injury caused by or resulting from any events, conditions or circumstances not within the complete control of Contractor; riots; civil commotion; fire; explosion; smoke; accidents; water escape; mildew, mold, spores, fungi, or other moisture-related conditions; falling objects; aircraft; vehicles; acts of God; lightning; windstorm; hail; flood; mud slides; damage to personal property; earthquakes; volcanic eruptions; wind driven water; radon gas; the condition of any portion of the Dwelling prior to the commencement by Contractor of the Renovation Work; the presence of fiberglass (also known as rock wool) as a component in the Renovation Work; infestation from termites or other insects; sink holes; subsurface conditions; or changes in the underground water table; including, but not limited to, any mental anguish or bodily injury and any incidental, consequential, or secondary damages caused or claimed to be caused thereby; and Owner hereby waives and disclaims any claim arising out of any such loss, damage or injury.

Owner acknowledges that Owner has read, understood, and accepted the foregoing paragraph.

This Limited Warranty Agreement does not limit or enhance any manufacturer’s warranty that is given on any appliance, fixture, equipment, or material included within the Renovation Work (“Manufacturer’s Warranted Items”), if any. The warranties supplied by the manufacturers, either directly or indirectly, to Owner, on some Manufacturer’s Warranted Items, may be greater in both scope and time than warranties provided in this Limited Warranty Agreement. These warranties are the property of Owner, and Contractor shall deliver all such warranties at the pre-occupancy inspection and transfer the rights that Contractor has in such warranties, if any, to Owner. Owner will file with the manufacturer any forms contained in these manufacturer’s warranties that are necessary to activate such warranties. These Manufacturer’s Warranted Items are specifically not covered by this Limited Warranty Agreement, and Owner shall rely on the manufacturers to correct any deficiencies with respect to these Manufacturer’s Warranted Items.

Owner acknowledges that Owner has read, understood, and accepted the foregoing paragraph.

Access to the Dwelling. Owner must provide Contractor with reasonable workday access to the Dwelling in order to perform any warranty service required under this Limited Warranty Agreement. Failure or refusal of Owner to provide such access to Contractor will relieve Contractor of its obligations under this Limited Warranty Agreement.

Opportunity to Perform. Prior to filing any action under this Limited Warranty Agreement, Owner must give to Contractor reasonable notice of and a reasonable opportunity to repair, replace, or pay the reasonable cost of repairing or replacing any Latent Defect covered hereunder. SUCH NOTICE MUST, IN ANY EVENT, BE GIVEN IN THE MANNER DESCRIBED IN PARAGRAPH 13 OF THIS LIMITED WARRANTY AGREEMENT AND MUST BE GIVEN PRIOR TO THE EXPIRATION OF THE LIMITED WARRANTY PERIOD. Owner acknowledges that the right of Owner to require Contractor to repair, replace, or pay the reasonable cost of repairing or replacing any Latent Defect covered hereunder is the sole and exclusive remedy available to Owner.

Arbitration. Any controversy, claim, or dispute arising out of or relating to any obligation of Contractor to repair, replace, or pay to Owner the reasonable cost of repairing or replacing any Latent Defect covered under this Limited Warranty Agreement shall be settled by binding arbitration pursuant to the Federal Arbitration Act, 9 USC § 1, et seq., and shall be administered in accordance with the applicable rules of [Insert here an arbitration option of your choice, such as “the Construction Industry Rules of the American Arbitration Association” or “the Better Business Bureau of (Insert here the designation of your local Better Business Bureau)” or such other system as you might prefer]. Contractor and Owner acknowledge and agree that this Limited Warranty Agreement substantially affects interstate commerce by virtue of the materials and components contained in the Renovation Work. Judgment on the award rendered by the arbitrators may be entered in any court having jurisdiction thereof.

No Assignment. This Limited Warranty Agreement is provided to Owner only and is not transferable or assignable by Contractor or Owner nor enforceable by any subsequent owner or occupant of the Dwelling.

General Provisions.

If any provision of this Limited Warranty Agreement is determined by a court of competent jurisdiction to be unenforceable, that determination will not affect the enforceability of the remaining portions.

This Limited Warranty Agreement shall be binding upon Contractor and Owner and their respective heirs, executors, administrators, successors and assigns.

This Limited Warranty Agreement shall be governed by and construed in accordance with the laws of the State of Alabama.

The titles or headings to the paragraphs included herein are for convenience only and shall not add to, reduce, limit, or modify in any manner the content thereof.

The use of one gender shall include all other genders, the use of singular shall include the plural, and the use of the plural shall include the singular, all as may be appropriate to the context in which they are used.

Notice to Contractor. Owner shall notify Contractor in writing before the expiration of the Limited Warranty Period of any alleged defect covered by this warranty. Such notice and any other notices to be given to Contractor hereunder must be sent by certified mail to Contractor at the following address:

Attention:

FAILURE OF OWNER TO GIVE SUCH WRITTEN NOTICE TO CONTRACTOR BEFORE THE EXPIRATION OF THE LIMITED WARRANTY PERIOD SHALL BAR ANY RIGHT TO RECOVERY BY OWNER PURSUANT TO THIS LIMITED WARRANTY AGREEMENT.

Consumer Products. This Limited Warranty Agreement does not extend to or cover any appliance, piece of equipment, or any item defined as a consumer product for purposes of the Magnusson-Moss Warranty Act (15 USC 2301-2312, as amended).

WAIVER OF WARRANTIES AND CLAIMS. THIS LIMITED WARRANTY AGREEMENT IS GIVEN IN LIEU OF ANY AND ALL OTHER WARRANTIES, EXPRESSED OR IMPLIED, INCLUDING, BUT NOT LIMITED TO, ANY IMPLIED WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, HABITABILITY AND WORKMANSHIP AND IS ALSO IN LIEU OF ANY CLAIMS FOR CONSEQUENTIAL DAMAGES, MENTAL ANGUISH OR DISTRESS, AND FOR DAMAGES BASED UPON NEGLIGENCE, AND OWNER HEREBY EXPRESSLY WAIVES AND DISCLAIMS ANY SUCH WARRANTIES AND CLAIMS WITH RESPECT TO THE RENOVATION WORK.

Owner acknowledges that Owner has read, understood, and accepted the foregoing paragraph.

SOLE WARRANTY/ENTIRE AGREEMENT. IT IS SPECIFICALLY AGREED BY THE PARTIES HERETO THAT THIS LIMITED WARRANTY AGREEMENT IS ACCEPTED BY OWNER AS THE SOLE WARRANTY GIVEN BY CONTRACTOR. OWNER ACKNOWLEDGES THAT THIS LIMITED WARRANTY AGREEMENT IS THE ENTIRE AGREEMENT OF THE PARTIES RELATED TO WARRANTIES. OWNER FURTHER AGREES THAT OWNER HAS NOT RELIED UPON ANY ORAL OR WRITTEN STATEMENTS, UNDERTAKINGS, OR REPRESENTATIONS EXCEPT AS SPECIFICALLY SET FORTH IN THIS LIMITED WARRANTY AGREEMENT AND THAT NO PRIOR AGREEMENT OR UNDERSTANDING PERTAINING TO WARRANTIES SHALL BE VALID OR OF ANY FORCE OR EFFECT. THE COVENANTS AND AGREEMENTS OF THIS LIMITED WARRANTY AGREEMENT CANNOT BE ALTERED, CHANGED, MODIFIED, OR ADDED TO, EXCEPT IN A WRITTEN INSTRUMENT SIGNED BY OWNER AND CONTRACTOR. NO REPRESENTATION, INDUCEMENT, UNDERSTANDING, OR ANYTHING OF ANY NATURE WHATSOEVER MADE, STATED, OR REPRESENTED BY CONTRACTOR OR ON CONTRACTOR’S BEHALF, EITHER ORALLY OR IN WRITING, (EXCEPT AS SPECIFICALLY SET FORTH IN THIS LIMITED WARRANTY AGREEMENT) HAS INDUCED OWNER TO ENTER INTO THIS LIMITED WARRANTY AGREEMENT OR SHALL BE ENFORCEABLE IN ANY MANNER AGAINST CONTRACTOR.

Owner acknowledges that Owner has read, understood, and accepted the foregoing paragraph.

Bargained-For Exchange / Survival. The terms and provisions of this Limited Warranty Agreement have been fully negotiated between Owner and Contractor as a part of the negotiation of the terms and provisions of the Contract, and the terms and provisions hereof are an integral part of the terms and provisions of such Contract. Owner and Contractor agree to be fully bound by the terms and provisions of this Limited Warranty Agreement and agree that this Limited Warranty Agreement shall survive the Renovation Work, as described in the Contract.

IN WITNESS WHEREOF the parties hereto have set their hands and seals on this the day of , 20 .

CONTRACTOR:

By:

Witness	Its:

OWNER:

Witness

Witness

The HBAA and its local chapters do not assume any liability for damages arising from the use of this document and give no opinion that any of the terms and conditions in this document should be accepted by the parties in a particular transaction. Terms and conditions should be negotiated between the parties based upon the respective interests, objectives and bargaining positions of all interested parties. Seek specific legal advice from your lawyer. Copyright 2001 by the Home Contractors Association of Alabama.

[This Exhibit should be used only if the parties elect to reference

these standards in paragraph 3 of the Limited Warranty Agreement.]

Exhibit I to Limited Warranty Agreement

Building Quality Standards Section

Site Work

A.	Site Grading

(1)	Possible Defect	Settling of ground around foundation, utility trenches or other areas.

Building Standard	Settling of ground around foundation walls, utility trenches or other filled areas shall not interfere with water drainage away from the Home.

Responsibility	If Contractor has provided final grading: upon request by Owner, Contractor shall fill settled areas affecting proper drainage, one time only, during the Limited Warranty Period. Owner shall be responsible for removal and replacement of shrubs or other landscaping affected by placement of such fill.

B.	Site Drainage

(1)	Possible Defect	Improper drainage of the site.

Building Standard	The necessary grades and swales shall have been established by Contractor to insure proper drainage away from the Home. Standing or ponding water shall not remain for extended periods in the immediate area after a rain (generally no more than 24 hours), except that in swales which drain other areas, or in areas where sump pumps discharge, a longer period can be anticipated (generally no more than 48 hours). The possibility of standing water after an unusually heavy rainfall should be anticipated. No grading determination shall be made while there is frost or snow on the ground, or while the ground is saturated.

Responsibility	Contractor is responsible only for initially establishing the proper grades and swales. Owner is responsible for maintaining such grades and swales once they have been properly established.

Concrete

A.	Expansion and Contraction Joints

(1)	Possible Defect	Separation or movement of concrete slabs within the structure at expansion joints.

Building Standard	Concrete slabs within the structure are designed to move at expansion and contraction joints.

Responsibility	None.

B.	Cast-In-Place Concrete

(1)	Possible Defect	Basement or foundation wall cracks.

Building Standard	Shrinkage cracks are not unusual in concrete foundation walls. Such cracks greater than 1/8 inch in width shall be repaired.

Responsibility	Contractor will repair cracks in excess of 1/8 inch in width.

(2)	Possible Defect	Cracking of basement floor.

Building Standard	Minor cracks in concrete basement floors are normal. Cracks exceeding 3/16 inch in width or 1/8 inch in vertical displacement shall be repaired.

Responsibility	Contractor will repair cracks exceeding maximum tolerances by surface patching or other methods as required.

(3)	Possible Defect	Cracking in slab attached garage.

Building Standard	Cracks in garage slabs in excess of 1/4 inch in width or 1/4 inch in vertical displacement shall be repaired.

Responsibility	Contractor will repair cracks exceeding maximum tolerances by surface patching or other methods as required.

(4)	Possible Defect	Uneven concrete floors/slabs

Building Standard	Except for basement floors or where a floor or portion of floor has been designed for specific drainage purposes, concrete floors in rooms designed for habitability shall not have pits, depressions or areas of unevenness exceeding 1/4 inch in 32 inches.

Responsibility	Contractor will correct or repair to meet the Building Standard.

(5)	Possible Defect	Cracks in concrete slab-on-grade floors with finish flooring.

Building Standard	Cracks which rupture the finish flooring material shall be repaired.

Responsibility	Contractor will repair cracks, as necessary, so as not to be readily apparent when the finish flooring material is in place. (See also Building Standard 7., “Finishes.”)

(6)	Possible Defect	Pitting, scaling or spalling of concrete work covered by this Limited Warranty.

Building Standard	Concrete surfaces shall not disintegrate to the extent that the aggregate is exposed and loosened under normal conditions of weathering and use.

Responsibility	Contractor will take whatever corrective action necessary to repair or replace defective concrete surfaces. Contractor is not responsible for deterioration caused by salt, chemicals, mechanical implements and other factors beyond its control.

(7)	Possible Defect	Settling, heaving, or separating of stoops, steps, or garage floors.

Building Standard	Stoops, steps, or garage floors shall not settle, heave or separate in excess of 1 inch from the house structures.

Responsibility	Contractor will take whatever corrective action is required to meet the Building Standard.

(8)	Possible Defect	Standing water on stoops.

Building Standard	Water should drain from outdoor stoops and steps. The possibility of minor water standing on stoops for a short period after rain can be anticipated.

Responsibility	Contractor shall take corrective action to assure drainage of steps and stoops.

Masonry

A.	Unit Masonry

(1)	Possible Defect	Basement or foundation wall cracks.

Building Standard	Small cracks not affecting structural stability are not unusual in mortar joints of masonry foundation walls. Cracks greater then 1/8 inch in width shall be repaired.

Responsibility	Contractor will repair cracks in excess of 1/8 inch by pointing or patching. These deficiencies shall be reported and repairs made during the Limited Warranty Period.

(2)	Possible Defect	Cracks in masonry walls or veneer.

Building Standard	Small hairline cracks due to shrinkage are common in mortar joints in masonry renovation. Cracks greater then 3/8 inch in width are considered excessive.

Responsibility	Contractor will repair cracks in excess of Building Standard by pointing or patching. These repairs shall be made during the Limited Warranty Period. Contractor will not be responsible for color variation between old and new mortar.

Wood and Plastic

A.	Rough Carpentry

(1)	Possible Defect	Floors squeak or subfloor appears loose.

Building Standard	Floor squeaks and loose subfloor are often temporary conditions common to new renovation, and a squeak-proof floor cannot be guaranteed.

Responsibility	Contractor will correct or repair to meet Building Standard.

(2)	Possible Defect	Uneven wood floors.

Building Standard	Floors shall not have more then 1/4 inch ridge or depression within any 32 inch measurement when measured parallel to the joists. Allowable floor and ceiling joist deflections are governed by the applicable building code.

Responsibility	Contractor will correct or repair to meet Building Standard.

(3)	Possible Defect	Bowed walls.

Building Standard	All interior and exterior walls have slight variances on their finished surfaces. Bowing of walls should not detract from or blemish the wall’s finished surface. Walls should not bow more than 1/4 inch out of line within any 32 inch horizontal or vertical measurement.

Responsibility	Contractor will repair to meet Building Standard.

(4)	Possible Defect	Out-of-plumb walls.

Building Standard	Walls should not be more than 1/4 inch out of plumb for any 32 inch vertical measurement.

Responsibility	Contractor will repair to meet the Building Standard.

B.	Finish Carpentry (Interior)

(1)	Possible Defect	Poor quality of interior trim workmanship.

Building Standard	Joints in moldings or joint between moldings and adjacent surface shall not result in open joints exceeding 1/8 inch in width.

Responsibility	Contractor will repair defective joints, as defined. Caulking is acceptable.

C.	Finish Carpentry (Exterior)

(1)	Possible Defect	Poor quality of exterior trim workmanship.

Building Standard	Joints between exterior trim elements, including siding and masonry, shall not result in open joints in excess of 3/8 inch. In all cases the exterior trim, masonry and siding shall be capable of performing its function to exclude the elements.

Responsibility	Contractor will repair open joints, as defined. Caulking is acceptable.

Thermal and Moisture Protection

A.	Waterproofing

(1)	Possible Defect	Leaks in basement.

Building Standard	Leaks resulting in actual trickling of water shall be repaired. Leaks caused by improper landscaping or failure to maintain proper grades are not covered by this Limited Warranty. Dampness of the walls or floors may occur in new renovation and is not considered a deficiency.

Responsibility	Contractor will take such action as necessary to correct basement leaks except where the cause is determined to result from Owner action or negligence.

B.	Insulation

(1)	Possible Defect	Insufficient insulation.

Building Standard	Insulation shall be installed in accordance with applicable energy and building code requirements.

Responsibility	Contractor will install insulation in sufficient amounts to meet Building Standard.

C.	Louvers and Vents

(1)	Possible Defect	Leaks due to snow or rain driven into the attic through louvers or vents.

Building Standard	Attic vents and/or louvers must be provided for proper ventilation of the attic space of the structure.

Responsibility	None.

D.	Roofing and Siding

(1)	Possible Defect	Ice build-up on roof.

Building Standard	During prolonged cold spells, ice build-up is likely to occur at the eaves of a roof. This condition occurs when snow and ice accumulate and gutters and down spouts freeze up.

Responsibility	Prevention of ice build-up on the roof is an Owner maintenance item.

(2)	Possible Defect	Roof or flashing leaks.

Building Standard	Roofs or flashing shall not leak under normally anticipated conditions, except where cause is determined to result from ice build-up or Owner action or negligence.

Responsibility	Contractor will repair any verified roof or flashing leaks not caused by ice build-up or Owner action or negligence.

(3)	Possible Defect	Standing water on flat roof.

Building Standard	Water shall drain from flat roof except for minor ponding immediately following rainfall or when the roof is specifically designed for water retention.

Responsibility	Contractor will take corrective action to assure proper drainage of roof.

(4)	Possible Defect	Delamination of veneer siding or joint separation.

Building Standard	All siding shall be installed according to the manufacturer’s and industry’s accepted standards. Separations and delaminations shall be repaired or replaced.

Responsibility	Contractor will repair or replace siding as needed unless caused by Owner neglect to maintain siding properly. Repaired area may not match in color and/or texture. For surfaces requiring paint, Contractor will paint only the new materials. Owner can expect that the newly painted surface may not match original surface in color.

E.	Sheet Metal

(1)	Possible Defect	Gutter and/or down spouts leak.

Building Standard	Gutters and down spouts shall not leak but gutters may overflow during heavy rain.

Responsibility	Contractor will repair leaks. It is an Owner responsibility to keep gutters and down spouts free of leaves and debris which could cause overflow.

(2)	Possible Defect	Water standing in gutters.

Building Standard	When gutter is unobstructed by debris, the water level shall not exceed one (1) inch in depth. Industry practice is to install gutters approximately level. Consequently, it is entirely possible that small amounts of water will stand in certain sections of gutter immediately after a rain.

Responsibility	Contractor will correct to meet Building Standard.

F.	Sealants

(1)	Possible Defect	Leaks in exterior walls due to inadequate caulking.

Building Standard	Joints and cracks in exterior wall surfaces and around openings shall be properly caulked to exclude the entry of water.

Responsibility	Contractor will repair and/or caulk joints or cracks in exterior wall surfaces as requires to correct deficiencies once, during the Limited Warranty Period. Even properly installed caulking will shrink and must be maintained during the life of the Home.

Doors and Windows

A.	Wood and Plastic Doors

(1)	Possible Defect	Warpage of exterior doors.

Building Standard	Exterior doors will warp to some degree due to the temperature differential on inside and outside surfaces. However, they shall not warp to the extent that they become inoperable or cease to be weather resistant or exceed National Woodwork Manufacturers Association Standards (1/4 inch, measured diagonally from corner to corner)

Responsibility	Contractor will correct or replace and refinish defective doors, during the Limited Warranty Period.

(2)	Possible Defect	Warpage of interior passage and closet doors.

Building Standard	Interior doors (full opening) shall not warp in excess of National Woodwork Manufacturers Association Standards (1/4 inch, measured diagonally from corner to corner).

Responsibility	Contractor will correct or replace and refinish defective doors to match existing doors as nearly as possible, during the Limited Warranty Period.

(3)	Possible Defect	Shrinkage of insert panels show raw wood edges.

Building Standard	Panels will shrink and expand and may expose unpainted surface.

Responsibility	None.

(4)	Possible Defect	Split in door panel.

Building Standard	Split panels shall not allow light to be visible through the door.

Responsibility	Contractor will, if light is visible, fill split and match paint or stain as closely as possible, one time during the Limited Warranty Period.

B.	Glass

(1)	Possible Defect	Broken glass.

Building Standard	None.

Responsibility	Broken glass not reported to Contractor prior to completion of work is Owner responsibility.

C.	Garage Doors on Attached Garages

(1)	Possible Defect	Garage doors fail to operate properly, under normal use.

Building Standard	Garage doors shall operate properly.

Responsibility	Contractor will correct or adjust garage doors as required, except where the cause is determined to result from Owner action or negligence.

(2)	Possible Defect	Garage doors allow entrance of snow or water.

Building Standard	Garage doors shall be installed as recommended by the manufacturer. Some entrance of the elements can be expected under abnormal conditions.

Responsibility	Contractor will adjust or correct garage doors to meet manufacturer’s recommendations.

D.	Wood, Plastic and Metal Windows

(1)	Possible Defect	Malfunction of windows.

Building Standard	Windows shall operate with reasonable ease, as designed.

Responsibility	Contractor will correct or repair as required.

(2)	Possible Defect	Condensation and/or frost on windows.

Building Standard	Windows will collect condensation on interior surfaces when extreme temperature differences and high humidity levels are present. Condensation is usually the result of climatic/humidity conditions, created by Owner.

Responsibility	Unless directly attributed to faulty installation, window condensation is a result of conditions beyond Contractor’s control. No corrective action required.

E.	Weather-stripping and Seals

(1)	Possible Defect	Air infiltration around doors and windows.

Building Standard	Some infiltration is normally noticeable around doors and windows, especially during high winds. Poorly fitted weather-stripping shall be adjusted or replaced. It may be necessary for Owner to have storm doors and windows installed to provide satisfactory solutions in high wind areas.

Responsibility	Contractor will adjust or correct poorly fitted doors, windows and poorly fitted weather stripping.

Finishes

A.	Lath and Plaster

(1)	Possible Defect	Cracks in interior wall and ceiling surfaces.

Building Standard	Hairline cracks are not unusual in interior wall and ceiling surfaces. Cracks greater than 1/8 inch in width shall be repaired.

Responsibility	Contractor will repair cracks exceeding 1/8 inch in width as required one time only, during the Limited Warranty Period. (See also Building Standard 7.F., “Painting.”)

B.	Gypsum Wallboard

(1)	Possible Defect	Defects which appear during the Limited Warranty such as nail pops, blisters in tape, or other blemishes.

Building Standard	Slight “imperfections” such as nail pops, seam lines and cracks not exceeding 1/8 inch in width are common in gypsum wallboard installations and are considered acceptable.

Responsibility	Contractor will repair only cracks exceeding 1/8 inch in width, one time only, during the Limited Warranty Period. (See also Building Standard 7.F., “Painting.”)

C.	Ceramic Tile

(1)	Possible Defect	Ceramic tile cracks or becomes loose.

Building Standard	Ceramic tile shall not crack or become loose.

Responsibility	Contractor will replace cracked tiles and re-secure loose tiles unless the defects were caused by Owner action or negligence. Contractor will not be responsible for discontinued patterns or color variations in ceramic tile.

(2)	Possible Defect	Cracks appear in grouting of ceramic tile joints or at junctions with other materials such as a bathtub.

Building Standard	Cracks in grouting of ceramic tile joints are commonly due to normal shrinkage conditions.

Responsibility	Contractor will repair grouting if necessary one time only, during the Limited Warranty Period. Contractor will not be responsible for color variations or discontinued colored grout. Regrouting of these cracks is a maintenance responsibility of Owner within the life of the Home.

D.	Finished Wood Flooring

(1)	Possible Defect	Cracks developing between floor boards.

Building Standard	Cracks in excess of 1/8 inch in width shall be corrected.

Responsibility	Contractor will repair cracks in excess of 1/8 inch during the Limited Warranty Period, by filling or replacing, at Contractor’s option.

E.	Resilient Flooring

(1)	Possible Defect	Nail pops appear on the surface of resilient flooring.

Building Standard	Readily apparent nail pops shall be repaired.

Responsibility	Contractor will correct nail pops which have broken the surface. Contractor will repair or replace, at Contractor’s sole option, resilient floor covering in the affected area with similar material. Contractor will not be responsible for discontinued patterns or color variations in the floor covering.

(2)	Possible Defect	Depression or ridges appear in the resilient flooring due to subtle irregularities.

Building Standard	Readily apparent depressions or ridges exceeding 1/8 inch shall be repaired. The ridge or depression measurement is taken as the gap created at one end of a six- inch straightedge placed over the depression or ridge with three inches of the straightedge on one side of the defect, held tightly to the floor.,

Responsibility	Contractor will take corrective action as necessary, to bring the defect within acceptable tolerance so that the affected area is not readily visible. Contractor will not be responsible for discontinued patterns or color variations in floor covering.

(3)	Possible Defect	Resilient flooring loses adhesion.

Building Standard	Resilient flooring shall not lift, bubble or become unglued.

Responsibility	Contractor will repair or replace, at Contractor’s sole option, the affected resilient flooring as required. Contractor will not be responsible for discontinued patterns or color variation of floor covering, or for problems caused by Owner neglect or abuse.

(4)	Possible Defect	Seams or shrinkage gaps at resilient flooring joints.

Building Standard	Gaps shall not exceed 1/16 inch in width in resilient floor covering joints. Where dissimilar materials abut, a gap not to exceed 1/8 inch is permissible.

Responsibility	Contractor will repair or replace, at Contractor’s sole option, the affected resilient flooring as required. Contractor will not be responsible for discontinued patterns or color variation of floor covering, or for problems caused by Owner neglect or abuse.

F.	Painting

(1)	Possible Defect	Exterior paint or stain peels, deteriorates or fades.

Building Standard	Exterior paint or stains should not fail during the Limited Warranty Period. However, fading is normal and the degree is dependent on climatic conditions.

Responsibility	If paint or stain is defective, Contractor will properly prepare and refinish affected areas, matching color as close as possible. Where finish deterioration affects the majority of the wall area, the whole area will be refinished.

(2)	Possible Defect	Painting required as corollary repair because of other work.

Building Standard	Repairs required under this Limited Warranty shall be finished to match surrounding areas as closely as practicable.

Responsibility	Contractor will finish repair area as indicated.

(3)	Possible Defect	Deterioration of varnish or lacquer finishes.

Building Standard	Natural finishes on interior woodwork shall not deteriorate during the Limited Warranty Period. However, varnish type finishes used on the exterior will deteriorate rapidly and are not covered by the Limited Warranty.

Responsibility	Contractor will retouch affected areas of natural finish interior woodwork, matching the color as clearly as possible.

(4)	Possible Defect	Mildew or fungus on painted surfaces.

Building Standard	Mildew or fungus will form on a painted surface if the structure is subject to abnormal exposures (i.e., rainfall, ocean, lake, or river front).

Responsibility	Mildew or fungus formation is a condition Contractor cannot control and is an Owner maintenance item unless it is a result of noncompliance with other sections of the Building Standard.

G.	Wall Covering

(1)	Possible Defect	Peeling of wall covering.

Building Standard	Peeling of wall covering shall not occur.

Responsibility	Contractor will repair or replace defective wall covering applications.

(2)	Possible Defect	Edge mismatching in pattern of wall covering.

Building Standard	None.

Responsibility	None.

H.	Carpeting

(1)	Possible Defect	Open carpet seams.

Building Standard	Carpet seams will show. However, no visible gap is acceptable.

Responsibility	Contractor will correct.

(2)	Possible Defect	Carpeting becomes loose, seams separate or stretching occurs.

Building Standard	Wall to wall carpeting, installed as the primary floor covering, when stretched and secured properly shall not come up, become loose, or separate from its point of attachment.

Responsibility	Contractor will re-stretch or re-secure carpeting as needed, if original installation was performed by Contractor.

(3)	Possible Defect	Spots on carpet, minor fading.

Building Standard	Exposure to light may cause spots on carpet and/or minor fading.

Responsibility	None.

I.	Special Coatings

(1)	Possible Defect	Cracks in exterior stucco wall surfaces.

Building Standard	Cracks are not unusual in exterior stucco wall surfaces. Cracks greater than 1/8 inch in width shall be repaired.

Responsibility	Contractor will repair cracks exceeding 1/8 inch in width, one time only, during the Limited Warranty Period.

Specialties

A.	Louvers and Vents

(1)	Possible Defect	Inadequate ventilation of attics and crawl spaces.

Building Standard	Attic and crawl spaces shall be ventilated as required by the approved building code.

Responsibility	Contractor shall provide for adequate ventilation. Contractor will not be responsible for alterations to the original system.

B.	Fireplaces

(1)	Possible Defect	Fireplace or chimney does not draw properly.

Building Standard	A properly designed and constructed fireplace and chimney shall function properly. It is normal to expect that high winds can cause temporary negative draft situations. Similar negative draft situations can also be caused by obstructions such as large branches of trees too close to the chimney. Some homes may need to have a window opened slightly to create an effective draft, if they have been insulated and weatherproofed to meet high energy conservation criteria.

Responsibility	Contractor will determine the cause of malfunction and correct, if the problem is one of design or renovation of the fireplace.

(2)	Possible Defect	Chimney separates from structure to which it is attached.

Building Standard	Newly built fireplaces will often incur slight amounts of separation. Separation shall not exceed 1/2 inch from the main structure in any 10 foot vertical measurement.

Responsibility	Contractor will determine the cause of separation and correct if standard is not met. Caulking is acceptable.

(3)	Possible Defect	Firebox paint changed by fire.

Building Standard	None.

Responsibility	None. Heat from fires will alter finish.

(4)	Possible Defect	Cracked firebrick and mortar joints.

Building Standard	None.

Responsibility	None. Heat and flames from “roaring” fires will cause cracking.

Equipment

A.	Residential Equipment

(1)	Possible Defect	Surface cracks, joint delaminations and chips in high pressure laminates on vanity and kitchen cabinet countertops.

Building Standard	Countertops fabricated with high pressure laminate coverings shall not delaminate.

Responsibility	Contractor will replace delaminated coverings to meet specified criteria. Contractor will not be responsible for chips and cracks noted following first occupancy.

(2)	Possible Defect	Kitchen cabinet malfunctions.

Building Standard	Warpage not to exceed 1/4 inch as measured from face from to point of furthermost warpage with door or drawer front in closed position.

Responsibility	Contractor will correct or replace doors or drawer fronts.

Plumbing

A.	Water Supply System

(1)	Possible Defect	Plumbing pipes freeze and burst.

Building Standard	Drain, waste and vent, and water pipes shall be adequately protected as required by applicable code, during normally anticipated cold weather, and as defined in accordance with American Society of Heating, Refrigerating and Air Conditioning Engineers (“ASHRAE”) design temperatures, to prevent freezing.

Responsibility	Contractor will correct situations not meeting the code. It is Owner’s responsibility to drain or otherwise protect lines and exterior faucets exposed to freezing temperatures.

B.	Plumbing System

(1)	Possible Defect	Faucet or valve leak.

Building Standard	No valve or faucet shall leak due to defects in workmanship and materials.

Responsibility	Contractor will repair or replace the leaking faucet or valve.

(2)	Possible Defect	Defective plumbing fixtures, appliances or trim fittings.

Building Standard	Fixtures, appliances or fittings shall comply with their manufacturer’s standards.

Responsibility	Contractor will replace any defective fixture or fitting which does not meet acceptable standards, as defined by the manufacturer.

(3)	Possible Defect	Noisy water pipes.

Building Standard	There will be some noise emitting from the water pipe system, due to the flow of water. However, water hammer shall be eliminated.

Responsibility	Contractor cannot remove all noises due to water flow and pipe expansion. Contractor will correct to eliminate “water hammer.”

(4)	Possible Defect	Cracking or chipping of porcelain or fiberglass surfaces.

Building Standard	Chips and cracks on surfaces of bathtubs and kitchen sinks can occur when surface is hit with a sharp or heavy object.

Responsibility	Contractor will not be responsible for repairs unless damage has been reported to Contractor prior to first occupancy.

Heating and Cooling

A.	Heating

(1)	Possible Defect	Inadequate heating.

Building Standard	Heating system shall be capable of producing an inside temperature of 70 degrees F, as measured in the center of each room at a height of 5 feet above the floor, under local outdoor winter design conditions as specified in ASHRAE handbook. Federal, state or local energy codes shall supersede this standard where such codes have been locally adopted.

Responsibility	Contractor will correct heating system to provide the required temperatures. However, Owner shall be responsible for balancing dampers, registers and other minor adjustments.

B.	Refrigeration

(1)	Possible Defect	Inadequate cooling.

Building Standard	Where air-conditioning is provided, the cooling system shall be capable of maintaining a temperature of 78 degrees F, as measured in the center of each room at a height of 5 feet above the floor, under local outdoor summer design conditions as specified in ASHRAE handbook. In the case of outside temperatures exceeding 95 degrees F, a differential of 15 degrees F from the outside temperature will be maintained. Federal, state, or local energy codes shall supersede this standard where such codes have been locally adopted.

Responsibility	Contractor will correct cooling system to meet temperature conditions, in accordance with specifications.

C.	Condensation Lines

(1)	Possible Defect	Condensation lines clog up.

Building Standard	None.

Responsibility	Condensation lines will clog eventually under normal use. This is an Owner maintenance item. Contractor shall provide unobstructed condensation lines at time of first occupancy.

D.	Evaporative Cooling

(1)	Possible Defect	Improper mechanical operation.

Building Standard	Equipment shall function properly at temperature standard set.

Responsibility	Contractor will correct and adjust so that blower and water system operate as designed.

Ventilation

A.	Air Distribution

(1)	Possible Defect	Noisy ductwork.

Building Standard	When metal is heated it expands and when cooled it contracts. The result is “ticking” or “crackling” which is generally to be expected.

Responsibility	None.

(2)	Possible Defect	Oil canning.

Building Standard	The stiffening of the ductwork and the gauge of the metal used shall be such that ducts do not “oilcan.” The booming noise caused by “oil canning” is not acceptable.

Responsibility	Contractor will correct to eliminate this sound.

Electrical

A.	Electrical Conductors, Fuses and Circuit Breakers

(1)	Possible Defect	Fuses blow or circuit breakers (excluding ground fault interrupters) “kick out.”

Building Standard	Fuses and circuit breakers shall not activate under normal usage.

Responsibility	Contractor will check wiring circuits for conformity with local, state, or approved national electrical code requirements. Contractor will correct circuitry not conforming to code specifications.

B.	Outlets, Switches and Fixtures

(1)	Possible Defect	Drafts from electrical outlets.

Building Standard	Electrical junction boxes on exterior walls may produce air flow whereby the cold air can be drawn through the outlet into a room. The problem is normal in new home renovation.

Responsibility	None.

(2)	Possible Defect	Malfunction of electrical outlets, switched or fixtures.

Building Standard	All switches, fixtures and outlets shall operate as intended.

Responsibility	Contractor will repair or replace defective switches, fixtures and outlets.

C.	Service and Distribution

(1)	Possible Defect	Ground fault interrupter trips frequently.

Building Standard	Ground fault interrupters are sensitive safety devices installed into the electrical system to provide protection against electrical shock. These sensitive devices can be tripped very easily.

Responsibility	Contractor shall install ground fault interrupter in accordance with approved electrical code. Tripping is to be expected and is not covered, unless due to a renovation defect.

Plumbing

A.	Water Supply

(1)	Possible Defect	Water supply system fails to deliver water.

Building Standard	All on-site service connections to municipal water main and private water supply shall be Contractor’s responsibility. Private systems shall be designed and installed in accordance with approved building, plumbing and health codes.

Responsibility	Contractor will repair if failure is result of defective workmanship or materials. If conditions beyond Contractor’s control disrupt or eliminate the source of the supply, Contractor has no responsibility.

B.	Septic Tank System

(1)	Possible Defect	Septic system fails to operate properly.

Building Standard	Septic system shall function adequately during all seasons, under climatic conditions normal or reasonably anticipated (based on local records) for the location of the home. Septic system shall be designed and installed to comply with applicable governmental codes, if any.

Responsibility	Contractor will repair, or otherwise correct, a malfunctioning or non operating system, if failure is caused by inadequate design, faulty installation, or other cause relating to actions of Contractor or contractors or subcontractors under Contractor’s control. Contractor will not be responsible for system malfunction or damage which is caused by Owner negligence, lack of system maintenance, or other causes attributable to actions of Owner or Owner’s contractors, not under the control of Contractor, including, but not necessarily limited to, the addition of fixtures, items of equipment, appliances or other sources of waste or water to the plumbing system served by the septic system, and damage, or changes to the septic system installation or surrounding soil conditions critical to the system’s functioning.

C.	Piping

(1)	Possible Defect	Leakage from any piping.

Building Standard	No leaks of any kind shall exist in any soil, waste, vent or water pipe. Condensation on piping does not constitute leakage, and is not covered.

Responsibility	Contractor will make repairs to eliminate leakage.

(2)	Possible Defect	Stopped up sewers, fixtures and drains.

Building Standard	Sewers, fixtures and drains shall operate properly.

Responsibility	Contractor will not be responsible for sewers, fixtures and drains which are clogged through Owner negligence. If a problem occurs, Owner should consult Contractor for a proper course of action. Where defective renovation is shown to be the cause, Contractor will assume the cost of the repair; where Owner negligence is shown to be the cause, Owner shall assume all repair costs.

(3)	Possible Defect	Refrigerant lines leak.

Building Standard	Refrigerant lines shall not develop leaks during normal operation.

Responsibility	Contractor will repair leaking refrigerant lines and re-charge unit, unless damage was caused by Owner.

Ventilation System

A.	Air Distribution

(1)	Possible Defect	Ductwork separates or becomes unattached.

Building Standard	Ductwork shall remain intact and securely fastened.

Responsibility	Contractor will re-attach and re-secure all separated or unattached ductwork.

Electrical System

A.	Wiring

(1)	Possible Defect	Failure of wiring to carry its designed load.

Building Standard	Wiring should be capable of carrying the designed load for normal residential use.

Responsibility	Contractor will check wiring for conformity with local, state, or approved national electrical code requirements. Contractor will repair wiring not conforming to code specifications

[Use as Exhibit either the Preoccupancy Inspection Agreement or the Acknowledgment of Acceptance]

Exhibit II to Limited Warranty Agreement

PREOCCUPANCY INSPECTION AGREEMENT

DATE:	TIME:

OWNERS:

ADDRESS:	CITY:

We Owners have inspected the Renovation Work, including those of the items listed below which are applicable, and find it to be in good physical condition, free from damage such as holes, chips, cracks, exceptions, omissions, malfunctions or other defects of materials or workmanship, except as noted in the applicable “comments” sections below. A check mark or other similar notation in the space beside an item indicates acknowledgment by Owners that the item is in good physical condition and free from damage.

If an item is not applicable, please mark through it.

GENERAL

Foyer	Living Room	Hall Bath	Full Bath

Dining Room	Kitchen	Bed Rooms	Utility Room

Breakfast Rm.	Laundry Rm.	Closets	Porch

Patio	Deck	Garage	Other Areas

Drives	Walks	Yard	Exterior of

Home

Comments:

DOORS

Verify that the weather-stripping, locking mechanism, thresholds and stops are correctly installed and function smoothly and properly.

Foyer	Living Room	Hall Bath	Full Bath

Dining Room	Kitchen	Bed Rooms	Utility Room

Breakfast Rm.	Laundry Rm.	Closets	Porch

Patio	Deck	Garage	Other Areas

Comments:

WINDOWS/SCREENS

Verify that the weather-stripping and locking mechanisms are correctly installed and function smoothly and properly.

Foyer	Living Room	Hall Bath	Full Bath

Dining Room	Kitchen	Bed Rooms	Utility Room

Breakfast Rm.	Laundry Rm.	Closets	Porch

Patio	Deck	Garage	Other Areas

Comments:

ELECTRICAL SWITCHES/OUTLETS/SAFETY SWITCHES

Verify that switches and outlets are tested for electric current (hot), proper grounding and proper polarity.

Foyer	Living Room	Hall Bath	Full Bath

Dining Room	Kitchen	Bed Rooms	Utility Room

Breakfast Rm.	Laundry Rm.	Closets	Porch

Patio	Deck	Garage	Other Areas

Comments:

SMOKE DETECTOR

Verify that the smoke detectors are functioning properly.

Comments:

LIGHT FIXTURES

Verify that fixtures are hung straight and level and that bulbs are installed and burn.

Foyer	Living Room	Hall Bath	Full Bath

Dining Room	Kitchen	Bed Rooms	Utility Room

Breakfast Rm.	Laundry Rm.	Closets	Porch

Patio	Deck	Garage	Other Areas

Comments:

HVAC UNIT

Verify that heating and cooling systems, including thermostat, insulation, and filter are correctly installed and operating properly. Verify that unit turns on. Verify that air flow is at each vent and that vent opens and closes.

Comments:

HOT WATER HEATER

Check the pop-off valve and drain to make sure they are functioning properly. Verify that hot water flows out of all faucets.

Comments:

BREAKER BOX

Check to make sure door opens and closes properly, all circuits are labeled properly, and the breakers are functioning properly.

Comments:

BASEBOARDS/TRIM

Inspect baseboards and trim for proper installation and appearance.

Comments:

WALLS/CEILINGS

Check all walls and ceilings to verify that appearance is acceptable.

Comments:

CLOSETS

Inspect shelves and rods for proper installation and appearance.

Hall Bath	Full Bath	Other Areas

Bed Rooms	Utility Room

Laundry Room	Closets

Comments:

FLOOR COVERING

Inspect all carpet for proper installation and appearance. Inspect all vinyl, ceramic tile and wood flooring for proper installation and appearance.

Comments:

COUNTERTOPS

Inspect all countertops for proper caulking, level and anchors, and check for the presence of scratches, nicks, and burns.

Comments:

CABINETS

Inspect doors, drawers, shelves and hardware for proper installation and operation. Check that all drawers and doors open properly.

Comments:

PLUMBING

Inspect for proper fittings, water draining freely, hot and cold water, proper washer/dryer hook ups and the presence of any leaks. Check and record water pressure.

Hall Bath	Full Bath	Kitchen	Utility Room

Laundry Room	Other Areas

Comments:

KITCHEN PLUMBING FIXTURES

Inspect for proper installation and operation of sink, sprayer, stopper and dishwasher. Check for leaks under sink. Check dishwasher door for correct closing. Run dishwasher through cycle and check for leaks around door and under sink.

Comments:

BATHROOM FIXTURES

Inspect for the correct installation and operation of bathroom fixtures. Check for leaks and presence of any damage to fixtures. Place a double hand full of toilet tissue in commode and test flush.

Comments:

TOWEL BARS/PAPER HOLDERS/SOAP DISH/TOOTHBRUSH HOLDERS/TUMBLER

Inspect for proper installation and location.

Comments:

MIRRORS

Verify that mirrors are plumb and square and there are no factory defects in the silvering and no cracks or chips on glass edges.

Comments:

VENT FANS

Check for proper installation and operation.

Comments:

APPLIANCES

Check for proper installation and operation of:

Range	Hood	Refrigerator

turn on	light	gasket

temperature control	fan	ice maker

oven light	light

broiler pan	Garbage Disposal	shelves

oven elements	turn on and run	temperature control

burner eyes	reset button

oven racks	seal	Dishwasher

stopper	arm

Microwave	proper drainage	basket

light	controls

fan	drainage system

door

run full cycle

Comments:

FIREPLACE

Inspect for proper installation, operation and appearance.

Hearth	Surround	Unit	Screens

Glass	Damper

Doors

Comments:

CLEANLINESS

Inspect for thoroughness of cleaning.

Comments:

EXTERIOR OF HOME

Painting	Roof	Trim

full coverage	all shingles in place	matched in place

caulking at joints	valleys appear normal	fitting properly

ridge shingles in place	sofit vent open

Gutters	Brick	Patio/Walk/Drive

Heating & A/C Unit	level (no bird baths)

installed level in	drains

workman like manner	no cracks or

separations

Comments:

YARD

Bushes	Sod	Lawn

alive & healthy	in place	level

rolled	raked

seeded

Comments:

ADDITIONAL COMMENTS

This Preoccupancy Inspection Agreement is part of the Limited Warranty Agreement which is to be resigned upon completion of the Renovation Work and attached hereto. This Preoccupancy Inspection Agreement shall survive the execution of the Limited Warranty Agreement and remain in full force and effect.

We Owners have inspected each item contained in this Preoccupancy Inspection Agreement as well as an inspection of our own and we find the portion of the Dwelling upon which the Renovation Work has been performed to be in good condition except as specifically described above. We Owners do hereby agree that the Renovation Work is complete and do hereby accept all workmanship and material in the Renovation Work as being free from defect except as specifically described above and except any Latent Defect (as defined in the Limited Warranty Agreement) not apparent at this time.

IN WITNESS WHEREOF the parties hereto have set their hands and seals on this the day of , 20 .

Owner

WITNESS

Contractor

WITNESS

Please have utilities changed to your name.

[Use as Exhibit either the Preoccupancy Inspection Agreement or the Acknowledgment of Acceptance]

Exhibit II to Limited Warranty Agreement

STATE OF ALABAMA	)

:

COUNTY OF	)

ACKNOWLEDGMENT OF ACCEPTANCE

We, the undersigned Owners, acknowledge the completion by

(“Contractor”) of the Renovation Work upon the Dwelling located on

(the “Land”).

We hereby acknowledge that we have inspected the Renovation Work, including any driveway and other improvements included therein and that, without any reservations, we accept the Renovation Work as to the condition thereof. Specifically, we accept the Renovation Work as to the condition of the wall finish, paint, and decoration, finished floors, bath tile and fixtures, kitchen tile, sink, and cabinets, woodwork, trim, and paneling, doors and windows, caulking and weatherstripping, lighting fixtures, brick and paneling on exterior walls, concrete, stucco, plaster, bricks, mortar, and masonry, garages, storage buildings, or other outbuildings not attached to the Dwelling, swimming pools and other recreational facilities, concrete work of driveway, walks, porches, and carports, roofing, drainage around the Dwelling and ditches within easements, basement or crawl space under the Dwelling, and driveways, walkways, retaining walls, fences, and landscaping (including sodding, seeding, shrubs, trees, and plantings).

We hereby acknowledge receipt of the Limited Warranty Agreement with respect to the Renovation Work for a period of executed by Contractor and us and understand the responsibilities of Contractor thereunder.

We acknowledge that Contractor has performed its contract with us, and the Renovation Work has been completed according to the plans and specifications agreed upon and according to the decoration plans made part of the contract.

Dated the day of , 20 .

OWNERS: