Page 329 - TCDB combined Book

308 The Complete DESIGN BUILDER

Terms of Payment:

Terms of Payment that are stated in your prime contract should be based on your proposal
presentation and the client’s subsequent acceptance. Prior to the signing and finalization of any
contract documents all financial and credit approvals should be completed.

The basic requirement for proceeding with a formal contract and authorizing irreversible
expenditures should include one of the following.

Confirmation of adequate and approved mortgage financing from the lender.

Confirmation from the financial source of committed, adequate funds on deposit,
dedicated for the specific project covering your progress payments.

Signed agreement directly with the lender with their guarantee of payment and your
guarantee of the project completion.

Before preparation of contract documents it is imperative that a Property Title Search
determining property ownership be conducted. The signed contract must include the name and
agreement of the land owner, acknowledging his acceptance of the Contract Terms and
Conditions and ultimate responsibility for payment of any improvements resulting from your
signed contract.

Contract matters outlined herein regarding financing arrangements, credit approvals and title
search should all have been completed during the earlier proposal preparation and selling process.
The inclusion of these items under this Chapter is to emphasize the importance of dealing with
these issues in a detail thorough manner.

On projects with progress billing arrangements the first payment will normally be due by
the 15th of the month, following the first 30 days of on-site work. Should there be any delay in
receiving this first payment other than a legitimate, mutual agreement we suggest an immediate
stop-work order be issued. Beware of any unexplained reason for suggesting your first progress
billing be added to your second or subsequent progress payment. Remember that all subcontracts
and purchase agreements will usually be your responsibility, regardless of whether you are paid or
not. Any problems with receiving payments on schedule must be dealt with immediately and not
when it becomes a major financial problem