The Basics of Green Building Contracts

Green building opportunities are engaging a lot of attention. This is a result of many factors, such as tax credits, greater regulatory assistance, and increased consumer awareness about environmental conservation. However, green building contracts aren’t as easy-to-understand as conventional building contracts.

What Makes Green Building Contracts Challenging?

For a long time, there was an absence of standard green-construction contracts. As a result, green-building contracts have often been vague, creating a lot of problems for contractors and other involved parties. Being relatively new and still coming to terms with different state-level and national regulations, maintaining uniformity in green-building contracts can be difficult. Recently, this issue has been addressed.

Green-building contracts addressing different types of green risks are now available. The construction industry is still familiarizing itself with this contractual format. Typically, green contracts try to address unique liabilities, responsibilities, and risks associated with green buildings.

We will talk about different aspects of comprehensive risk-management strategy in such contracts. Ideally, the contract should include anticipated/possible risks followed by different clauses and sub-clauses that clarify every aspect of the risks involved. According to the recently-introduced standards, a green-building, risk-management contract should address the following:

Designate responsibilities—establishing accountability is an essential component of building contracts as specific people/departments are designated different job responsibilities. The contract should clearly mention people or parties responsible for failure to achieve green certifications or tax credits. The contract must explain the extent of responsibilities (or risks) of the contractor. Standard and additional risks should be explained. The contract should mention parties responsible for collating and preparing documents for getting green ratings.

Clearly defining green terminology—this includes often-used terms like “green certification” and “sustainability”. These terms don’t have an established, universal definition. Therefore, the contract should define these terms, making them clear for all the concerned parties.

Disclaimer—usually, contractors like to include a disclaimer. This provides more assurance to all the concerned parties. Here, the contractor provides a guarantee for achieving the desired outcomes. The desired outcome can be a green-building certification or the intended energy-efficiency figures. Failure to achieve these outcomes can lead to substantial damages. The disclaimer should state whether the consequential damages will be waived or executed and under what circumstances.

Terms related to project delivery—the contractor should present clear estimates or defined dates by which the green building project will be completed. In the conventional building documentation, contractors often warrant their workmanship. Green contracts are slightly more challenging. Here, contractors can be held responsible for designing flaws that can ruin green-performance ratings.

Liabilities—the contract should clearly address liability in case of a green technology or product failure. The green building niche often uses experimental materials. The success rate of such entities is often not known. Green building systems might even require the collaboration of conventional and new building techniques. The contract should address these challenging issues and assign liability across all the involved parties.

Payment Provisions—the contract should include payment provisions to avoid delays or confusion over payments. Sometimes, the payment schedule is tied to completion of different stages of construction/building. For instance, some contractors might be ready to accept payments when the green certification is received. However, some contractors might not feel comfortable with this clause. It is better to have clear terms about advances, making partial payments, releasing retainage, and final payments.

It has been observed that green building projects that use visual construction often perform better. Key elements of green building modeling are weaved together and then compared with expected outcomes. This makes it easier to gauge the most probable conflicts and create possible resolutions.

Get your share of the $1.5 trillion in Adjustable Rate Mortgages scheduled to reset this year! Imagine having up to a 20% funding rate at a low, cost effective price per lead! With our ARM plus leads, you can. Get in touch with ARM Source today!

How to Save Money on Building Costs

Who doesn't like to live in a house that has not been occupied by another family? However, the cost of building a new house can be unaffordable. That is the main reason people turn to the resale market. But there are ways to cut costs and save money.

Use thin bricks

Bricks are known for their strength and endurance. They also add a touch of elegance to the building. But bricks are expensive. If you are trying to cut costs, you should consider cheaper alternatives.

Bricks don't play much role in ensuring the structural integrity of the house, so it is possible to get away with something less costly. For example, thin bricks, a popular alternative, are not as thick as regular bricks. They are also much less expensive. By substituting regular bricks with thin bricks, you can give your home the classic beauty and elegance of brick housing. And these affordable housing materials won’t burn a hole in your pocket.

Use stock house plans

Getting a custom plan drawn up can be expensive. There is one way out - use a stock plan available with builders. There will be plenty so finding a beautiful plan is not all that difficult. Be sure to choose a plan that is more or less similar to the one in your dreams. When you use a stock plan, you can save several thousands of dollars. There is yet another advantage to choosing a stock plan. These are designed by experienced engineers and may be structurally and conceptually more sound than your plan.

Be your own contractor

If you know a thing or two about construction, you could perhaps be your own contractor. This is perhaps the most effective way to cut building costs. There are some downsides as well. You will have to be present at the construction site most of the time. You will need to choose and buy building materials on your own. You will also need to supervise the works done by your subcontractors. As you may have already imagined, this is not easy and requires a lot of skill. But the monetary benefits make it worth your time and efforts.

Go vertical

Land cost is perhaps the biggest cost involved in building a new house. If you already own the land, this is not a problem. But if you have to purchase a lot, you will have to shell out tens of thousands of dollars.

The only viable solution, in this case, is to buy a small lot and build up. A two-story building of 3000 square feet will cost much less than a single story house of the same size because you need much less land when you go vertical. However, be sure to use simple and clean construction lines. If you use complex geometry, building a multi-story house can be much more costly.

Paint the home yourself

If you have got a few spare hours, you could perhaps paint your own home and save up to $10,000. If you can get the help of a few friends or family members, you will need only a couple of days to finish painting a full house. In addition, you can save money on materials and paint.

Building a new home is possible, even if you are on a tight budget. You just need to be really handy and a little more involved in the work.

Smart Green Retrofits for Managing Energy Bills

When it comes to energy savings and green home improvements, instead of expecting huge returns, understand the latest bottom line – you can hold against skyrocketing energy costs by going in for some smart retrofits.

In general, energy prices have increased substantially in the last 10 years, especially in certain parts of the country. Even though there was a slight fall in natural gas prices since 2008 and there was stability in electricity prices for a while, there have been upward trends in prices of both since 2011.

According to the estimates of the Energy Information Administration of the US, there will be an average yearly increase of 2.3 per cent of the costs of residential energy right through 2035. If these projections are accurate and your average annual energy bill is $2,200 today, an increase of 2.3% works out to $50 more in the first year if your consumption pattern stays constant. In such a scenario, you’ll have a bill close to $4,000 by the time you get to 2035. Ouch, that’s going to pinch.

Dependable energy saving retrofits

When the sole reason for making retrofits is managing energy bills, look out for projects that offer the maximum returns for your investment.

As a rule of the thumb, try to fight the 2.3% yearly average by going in for green home improvements which reduce your energy usage by 5% or above and require a reasonable initial investment. Remember to find out whether your state government or utility offers tax credits and rebates for such improvements.

Some suggestions:

1. Insulate and seal ductwork running through spaces without heating. Though it may not appear glamorous, doing this in places like the attic and garage can improve heating system efficiency by 20% and you might manage a 5% overall bill reduction. A few hundred dollars of investment will be required for hiring an HVAC pro for the job and labor and material costs.

2. Get a programmable thermostat. If you don’t have one already, getting it and programming it correctly can help you save about 8% on your energy bills on an average.

3. Seal air leaks and add attic insulation. This is one of the soundest energy-saving improvements. By sealing and insulating your home, you can bring down energy bills by almost 10%. Regard upgrading attic insulation and sealing air leaks as a combination job for maximum benefits.

 

The bottom line

Don’t expect huge savings in your energy bills when you opt for green home improvements. It makes better sense to go in for green retrofits that are likely to offset increasing energy prices.

 

How to Save Money by Building a Low Cost Home

Even if you are not an expert, there are still ways to save money on home construction. Here are some cool tips to keep your home building budget within reason.

Split the costs

If you feel that you can’t afford the property because it is too large, you should consider buying it with a family member or friend. After purchasing the lot, you can split it into smaller lots. This saves money. Better still, you will be able to get a great lot for an attractive price.

Choose a problem lot

Some lots are less desirable than other lots. For example, a narrow lot or a hillside lot will have fewer takers. As a result, these lots are usually sold for much lower prices. If you can find such a 'problem lot' for a great price, don't hesitate to buy it. With the right floor plan and a great contractor, you can build the house of your dreams on any lot.

Waterfront lots

If you are looking for a waterfront property, you should opt for a lot facing a bay or a canal. These lots are much less expensive than lakefront or oceanfront properties. You will still have easy access to a water body.

Use low cost materials

Choose building materials that require less maintenance. Examples are: metal roofing and vinyl siding. Of course, these materials are more expensive, but they will easily recover their costs because you will not have to spend money on repairs or replacement.

Visit demolition sites

You will be able to collect used bricks, wooden doors and old barn wood from demolition sites. These materials are perfectly usable and usually don't cost anything. Of course, you will have to haul them away on your own.

Don't splurge

Avoid the temptation to splurge except for those truly important items. You can't, for example, skimp on doors or windows because they are important for the safety of your home.

Bigger isn’t necessarily better

Don't build a house that is bigger and better than any other house in the neighborhood. These monster homes are unlikely to command a good price when you decide to sell them.

Monitor all the materials used for construction

Don't let the contractor use low quality materials unless they are ready to make a cost adjustment.

Hire a certified contractor

An experienced will have established good relationships with subcontractors and suppliers.

Avoid site preparation

Site preparation can be expensive. Avoid lots that require extensive preparation work. Blasting rocks and clearing trees can be expensive.

Don’t alter blueprints

Don't change materials or blueprints during the building process. These changes can cost a lot of money.

Add width not depth

If the depth of the home is more than 32 feet, you will have to use specially designed roof trusses. This can be expensive. If you want a large house, add width or extra stories.

Consider vinyl flooring

If you feel that you can't afford to have hardwood flooring or ceramic tile at the moment, use vinyl flooring. You can add tile or wood directly on top of vinyl at any time.

Use a stock plan

Getting a plan custom-drawn can be expensive. Instead, choose one of the readily available stock plans. You will be able to customize it to get what you want.

Don’t build huge garages

If you have just two cars, you probably don't have to build a garage that can accommodate three or more vehicles. If you are looking for storage space, you should consider putting up a shed in the garden.