Some customers hire a general contractor who is unfamiliar with the correct modular home button-up procedures. Other customers take on the challenge themselves with even less experience, since they’ve never built any kind of home before.
What Can Happen When Your Contractors Don’t Know the Correct Modular Home Button-Up Procedures
One of my customers, who hired an independent GC, called me four years after he moved into his home. He’d found a bulging drywall seam in the vaulted foyer of his two-story modular home. A carpenter friend of his had already fixed the seam three years in a row, but it had reappeared that winter. He wanted to know what was wrong with his home.
When we removed the drywall at our inspection, we found a ¼” gap between the framing of the first-story ceiling and the second-story floor. The GC had failed to put any shims into the gap. This meant there was nothing to stop the modules from moving up and down in the winter when the heat was drying the framing out or in the summer when the humidity was causing the framing to expand. Since my customer completed his previous repairs to the foyer in the summer when the wood had already expanded, it was not surprising that the problem reoccurred in the winter when the materials were shrinking. As the second-story floor pressed down on the first-story ceiling, it buckled the band of drywall. Drywall is too brittle to resist that kind of compression. We explained to the customer what the correct procedure was and even helped him complete some of the work. When I spoke to him the following spring, he was very happy to report that the problem had not reappeared.
If you hire an independent GC without prior modular experience, make sure he is learns the correct modular home button-up procedures. Your dealer should be able to help with his education.
For more information about modular home button-up procedures, see Selecting a General Contractor and The General Contractor’s Responsibilities for Building a Modular Home in my book The Modular Home.
In my last post I said you need to receive four things from your dealer: legalese, modular home drawings, scope of work, and specifications.
Modular Home Drawings
The modular dealer and factory are obligated to build your home to match their drawings. You are obligated to accept what they draw when you “sign-off” on their plans. If your home matches the drawings but is not what you expected, neither the dealer nor the factory will be responsible for correcting the “mistake” at their expense. They also won’t be receptive to your claim, “But I told you . . .!” or “I’m sure you said that!”
The best way to protect yourself is to look very closely at your floor plans and exterior elevations before approving them with your signature. This means that each detail on the plans needs to be correct and that all important details are entered on the plans. A missing detail is a potential mistake. To save time, you will sometimes have to write notes directly on the final draft to ensure they contain every detail. One example of a detail that is easily missed is the location of a ceiling light fixture. Make sure the plans indicate whether you want it centered in the room or centered over an offset table.
Require the general contractor to provide complete plan and elevation drawings for the on-site work. Knowing what your garage, deck, porch, finished basement, etc. will actually look like is clearly important.
Modular Home Scope of Work
Make sure your contract lists all tasks (scope of work) required to complete your home. If you sign a contract that doesn’t include every task, the dealer will come back to you for more money after they begin construction of your home. For example, if you want your porch to be stained, make sure this is written into the contract.
Modular Home Specifications
Look closely at how the contract proposes to complete each task. A dealer can offer a much lower price by selecting a less expensive set of building specifications or by not listing any specifications at all for some tasks. If you sign a contract that doesn’t list the construction specifications for every task, the dealer has the right to select whatever materials he wants when it comes time to build your home. For example, if you want two coats of an oil based stain for your porch, make sure this is in writing.
Modular Home Exclusions
Require the dealer to include a written list of any tasks that are not included in their contract. This is especially important for those tasks that are needed to obtain a certificate of occupancy , especially if you might reasonably expect them to be included. The most complete estimates include these “exclusions” so you aren’t left guessing what you could be responsible for. (If you were an expert in new home construction, you might not need this list because you would know everything you need.) For example, it’s fine if building permit fees and landscaping are not included, but your contract should tell you this, since both will be needed.
Modular Home Allowances
Pay attention to” allowances”. Make sure the dealer only uses them when he can’t know the cost of a particular task. An example is the cost for drilling a well, since a dealer can’t know in advance how deep he’ll need to drill. Builders prefer allowances for two reasons. First, they don’t have to spend as much time preparing their proposal, since they don’t need to know the price. Second, and more importantly, allowances protect builders’ profits, since they make you responsible for all additional costs. If there are too many allowances, you are at risk for significant cost overruns.
The Details Matter for Your Modular Home Drawings, Scope of Work, and Specifications
Finally, make sure you understand the details. It won’t help much if you get what you signed for, but didn’t understand what you were getting. And when the dealer uses unfamiliar construction jargon, ask him to explain what he means.
Before buying a modular home you should insist on receiving four things from your dealer: modular home legalese, drawings, scope of work, and specifications. The details in these documents will protect everyone – you, the dealer, and the factory. It will take a lot of work for your dealer to create the documents for your specific project, and it will take you a lot of time to review the details. But you don’t have a choice if you want to protect yourself.
When the details are unwritten, it is your word against theirs. The only people who win are the lawyers. Let me give you some recommendations that will better protect everyone.
Modular Home Legalese: Cancellation
You definitely want the contract to state when you are allowed to cancel. The way to do this is with a “contingency” clause that specifies grounds for cancellation. For example, you will certainly want to retain the right to cancel if you don’t obtain financing, a building lot, or a building permit. You may also want that option if you can’t sell your home, your health fails, you lose your job, or you or your partner dies. Make sure the modular home legalese details when you can no longer cancel, as well as how much money the dealer can retain should you exercise your option.
Cancellation clauses are not just advantageous to you. In fact, I included one in my contract within the first month of becoming a modular dealer. What I discovered was that most customers had tasks to complete, obstacles to overcome, or concerns to address about things beyond their control. This made them delay signing a contract and providing a deposit until all their issues were resolved. Adding the contingency clause allowed both of us to move forward more quickly, which reduced the overall construction time by months.
Modular Home Legalese: Payments
Make sure your contract specifies the following payment issues: (a) the amount and timing of deposits; (b) when price increases are allowed, if at all; (c) whether the modular units will be paid COD or with an assignment of funds by a lender; (d) a disbursement schedule for the contracting work; and (e) a policy for allowable “holdbacks” should some of the work be incomplete or require correction. The modular home legalese should spell out when change orders are allowed, who can authorize them, if additional fees will be incurred, when payment is due, and the effect on the schedule.
Modular Home Legalese: Verbal Discussions
Your contract should exclude any verbal discussions unless they are also incorporated into the written contract. You might think this only benefits the dealer, but in fact neither of you wants to hear, “But I told you!” or “I’m sure you said that!”
Modular Home Legalese: Product Changes
Since product manufacturers often replace their products with new ones that have slightly different specifications, the modular factory and dealer will want to reserve the right to make product changes with reasonable terms. This might happen, for example, with windows, cabinets, shingles, or appliances. From time to time, these product changes will take place after you and the dealer have signed off on the specifications. The fact that you will have to accept a substitute, however, does not mean that you forfeit your right to be notified of these changes. When time allows, you should also be allowed to select a different product than the replacement. Be prepared to pay any increase in cost for selecting an upgrade.
Modular Home Legalese: Insurance
Both you and your dealer need to have insurance. The dealer should be responsible for insuring against any loss until they complete the modular set. To ensure the coverage is sufficient, insist on receiving a “certificate of insurance” directly from the insurance company. In turn, you should have either a “builder’s risk” policy or its equivalent. This will provide better coverage against theft and vandalism than an ordinary homeowner’s policy.
Modular Home Legalese: Warranty
The warranty section of your modular home legalese should include four components: (a) the items covered and not covered, (b) the construction standards that apply to each item, (c) the length of coverage, and (d) the method of dispute resolution. If you have an extended warranty for the modular units, it will cover all four components for the modular home. However, it might not cover the on-site contracting work.
Another source that details warranty coverage and standards is the National Association of Home Builders Guidelines for Professional Builders and Remodelers. I recommend either binding arbitration or mediation for dispute resolution instead of the courts.
In addition to floor plans and elevation drawings, you will also receive modular home plumbing and electrical plans. May general contractors and subcontractors have begun their work without first reviewing these plans, much to their regret and their customer’s dismay.
What Can Happen If Your GC and His Subcontractors Do Not Review Your Modular Home Plumbing and Electrical Plans Before Beginning Their Work
Soon after I started offering GC services, I had a serious problem with a plumbing leak in a two-story colonial I built for a young couple. The leak was more like a deluge. The plumber I hired had no previous modular experience, and my supervisor on the job was also quite inexperienced with modular homes.
A month after my customers moved in, the wife invited her parents to stay with them. While my customer bathed her young children in the master bathroom, her father took a shower in the hall bathroom. Both bathrooms were on the second story. A few hours later, my customer found a puddle of water on the kitchen floor. While trying to figure out what caused the leak, the drywall ceiling suddenly let go and water poured down. It turned out that my plumber had not made all the connections for the hall bathroom. The critical one was the waste line in the second floor access area. The water had no place to go but in the bays between floors.
Make Sure Your Mechanical Contractors Look Closely at the Modular Home Plumbing and Electrical Plans
The plumber missed the connection because my manufacturer had carpeted over the access panel. Neither my supervisor nor my plumber had looked at the plans to identify all of the access points. They also hadn’t completed a pressure test, which would have told them that a connection had been missed. If you hire your own GC, don’t make the mistake I made. Make sure your mechanical contractors (plumber, heating contractor, and electrician) look closely at the modular home plumbing and electrical plans to find every access panel. And make sure your plumber pressure tests his work!
For more information about how to use modular home plumbing and electrical plans, see The General Contractor’s Responsibilities for Building a Modular Home in my book The Modular Home.
Planning a realistic schedule and then maintaining it is one of the most challenging aspects of building a new home. There are just too many steps involving too many people with too little control over what they need to do. Every builder has scores of stories about construction delays. Because I’m no exception, I will post several stories about the causes of delays. But in my first post I want to talk about everyone’s tendency to believe in the “accordion solution” to modular home scheduling delays.
The Appeal of the “Accordion Solution” to Modular Home Scheduling Delays
One of my very first sales was to customers who were in a huge rush. This was one reason they wanted a modular home, since modulars are faster to build. We verbally agreed to a time line that included reasonable milestones for each of us. The most critical milestones for my customers involved making final decisions on their house plans and building specifications. This proved quite difficult for them.
Every time my customers requested another revision to their plans or needed another quotation for a different special order product, I informed them that we were falling behind schedule. They nodded in understanding. What I didn’t do was specify how much we were falling behind. I assumed they would recognize that since each revision of the plans always added ten days (sending it to the factory, waiting for the factory to draw it, getting it back to my customers, and waiting for them to review the changes) and each special material quote consistently added another four days, that they could do the math as easily as we did. I was sadly mistaken.
This is when I first recognized the allure of the accordion solution to modular home scheduling delays. Over time I’ve come to appreciate that this “solution” is shared by most of our customers. The accordion solution assumes that a delay to a schedule milestone doesn’t add time to the end of the schedule. Instead the entire schedule gets compressed just like an accordion. The miraculous, expected outcome is that the milestones that follow will happen as previously scheduled – without any delays.
If you think about this, it really doesn’t make sense. But who am I to criticize, since I’ve found myself using the same accordion logic with my subcontractors and material suppliers. “What do you mean you can’t make up the week we lost due to the snow storm?” “I know it took me an extra week to make a selection, but I still need those cabinets on the date we first discussed.” It’s just human nature for us to want what we want when we want it.
Modular Home Scheduling Delays Are Inevitable Because Stuff Happens
Do yourself, your modular dealer, and your general contractor a favor and work with them to set a realistic schedule. More importantly – given that “stuff happens” – be honest to yourself about the effect of delays on the initial schedule. Even more importantly, try to take the inevitable changes with patience and acceptance. Getting upset at your dealer, general contractor, family, or yourself won’t undo the delays any more than playing the accordion.