Chapter Fifteen: Put It in Writing

Chapter Fifteen

Put It in Writing

Now we have come to the written agreement. I want to emphasize here the importance of having every agreement in writing, not only in real estate investment but in any situation.

It is not a matter of trust, but rather of understanding and memory, as well as a possible change in situations. There is little likelihood of an argument, if all terms and conditions are agreed to in writing and in advance.

It is especially crucial if one of the parties to the deal should be deceased. The written agreement would remain as a reference.

The agreement should state the time period in which your draftsman agrees to complete the work; the amount of money involved and the method of payment; the extent of the work involved; the assurance that the work will meet all requirements necessary to procure a building permit.

I suppose I should comment on the items listed above to be included in the proposed agreement. I am not a lawyer and I do not give legal advice, but I have come to know that a contract cannot be forever. It must be limited to a certain time period. In your case, I should think that 30 days would be a reasonable amount of time to allow for completion. Of course, extenuating circumstances could alter cases.

As to the payment, there may be a difference of opinion. Some individuals will agree to accept payment when their work is complete. Others will try to collect it all in advance. There is no rhyme or reason why you should pay anyone before he has produced something.

It would probably be fair and reasonable to both parties if you paid one third to one half when the floor plans and details were completed. Of course the balance would be due when the total package of plans and specifications was finished.

At this point, I shall clarify the use of the word "details." It simply signifies separate drawings which show specialized things such as concrete footings with reinforcing steel; roof framing; sidewall and floor framing; kitchen and bath cabinets, etc. They are standard requirements of any Building Department and will be included by any draftsman.

The extent of the work should include fully developed plans, including four elevations and details. It is generally not necessary to spell it all out, since it will be required by the building department when applying for a permit.

However, the specifications are quite important. It is probable that you will take bids on your project, and it is necessary that each bidder has the benefit of identical specifications.

Each item should be identified, such as Standard or Kohler plumbing fixtures and the number of each fixture; plain or anodized aluminum sash and sliding doors along with the trade name; material used for pre-hung interior doors such as Philippine mahogany, birch or other and whether they are pre-finished.

Such things as electrical fixtures are difficult to select in advance. Thus it is usual to state a lump sum which is to be allowed for them. The amount can be adjusted with the contractor upon final settlement. You will choose the fixtures, and the contractor will pay for them, but you must agree that you have the advantage of his discount price.

The last consideration of your agreement is concerned with conformation with the Building Code. Most communities require that all plans carry the stamp of a licensed architect, when they are submitted for a building permit.

Your draftsman is usually not a licensed architect. You may be sure that he is aware of this regulation and has an arrangement with an architect to furnish the required stamp of approval.

The draftsman should furnish you with at least ten sets of everything. The Building Department will require two and the balance will be needed for bidding and for use on the job. You should also ask him for his original drawings, from which you could obtain more copies. They belong to you, since you have paid for them.

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