“after the ids ome ack” - wild apricot...2019 spring nahro conference “after the ids ome...
TRANSCRIPT
What are the next steps of managing an owner-
occupied rehab project after the bids come back?
In this session we will give some tips on:
• The Pre-construction meeting/loan closing,
• Construction management,
• Pay requests, and
• Project completion/close-out.
Pre-Construction Conference
• Meeting location is at the home to be rehabbed.
• Attendees of the meeting: – Homeowner
– Homeowner’s family (2nd pair of ears)
– Contractor
– Inspector
– HRA Staff
1. Review the Work Write-up page by page – If there is a question: the group goes
to look at the item and the notes added to original W. W.
– Owner signs each page after discussion and understands the work to be done.
2. Review the Pre-Construction Conference Report and everyone in group signs it.
– Communication from now on needs to be between owner & contractor
– Owner is responsible for monitoring the construction process, and discussing any possible issues with the contractor.
– It is the Contractor’s responsibility to make sure that the owner receives all manufacturer warranty documentation.
– The construction contract is between the owner and the contractor, so any disputes must be resolved first, between the owner and contractor and then, only as a fallback, the Rehab staff maybe contacted.
– Timeline for improvements: Actual start date, order of improvements & Projected end date.
Pre-Construction Conference
PRECONSTRUCTION CONFERENCE REPORT
Project # XXXX Address: 000 XXXX Lane SW, Hutch Date: __/____/2019
READ CAREFULLY BEFORE SIGNING
➢ Owner is responsible for monitoring the construction process, and discussing any
possible issues with the contractor.
➢ It is the Contractor’s responsibility to make sure that the owner receives all manufacture
warranty documentation.
➢ The construction contract is between the owner and the contractor, so any disputes must
be resolved first, between the owner and contractor and then, only as a fall-back, may
the Rehab staff be contacted.
Date Work to begin: ___________________________
Planned Order of Work Items to be completed:
3 - Siding
4 - Grading
2 - French Entry Door
1 - Misc. Heating
1 - Misc. Electrical
Estimated Date Work Completed: _______________________
I (We), the undersigned, have on this date participated in a Pre-construction Conference prior to the
beginning of rehabilitation on my (our) property. I (We) acknowledge the terms of the Contractor/Owner
Contract, the explanation of work to be done, the roles of the Rehabilitation staff, and our responsibilities
during the construction phase. I (We) further understand that the Housing Rehabilitation program
assumes no responsibilities for the work performed and does not warrant any work performed.
_____________________________________________________ ____________
Signature(s) of Property Owner Date
I, the undersigned, hereby certify that the Pre-construction Conference was held on this date between the
property owner(s), the Housing Rehabilitation staff, and myself. I understand the procedures to be
followed for change orders and request for payment and inspections. I understand and agree that the
work performed must meet the standards of performance set by the program and established by the
program specifications and work write-up.
___________________________________ ___________
Signature of Contractor and Title Date
I, the undersigned, hereby certify that I participated in a Pre-construction Conference on this date.
________________________________________ ____________
Signature of HRA Staff Date
Pre-Construction Conference
3. Review project financing
4. Owner-Contractor Contract– Permit Requirements
– Payment Process
(City disbursement times)
– Change Orders
– Workmanship Warranty
– Owner Responsibilities • Access to home
• Move personal items
5. Notice to Proceed signed by owner, HRA staff and possibly the contractor (dated after rescission period)
6. After contractor leaves, have the loan closing with homeowner.
CONTRACTOR - OWNER CONTRACT
CONTRACTOR CONDITIONS:
WHEREAS, the Contractor has submitted bid(s) for work to be performed in connection with the Small
Cities Community Development Rehabilitation Loan Program, on premises located at XXX Nowhere
Street SW, Hutchinson and owned by Xxxxxx Yyyyyyy.
NOW, THEREFORE, in consideration of acceptance of said bid(s) by the Owner, the Contractor agrees
as follows:
1. Hold Harmless
Contractor shall defend, indemnify, and hold harmless the Owner, and employees of the Department
of Housing & Urban Development, Minnesota Department of Employment and Economic
Development (DEED), the City of Hutchinson, and Hutchinson Housing and Redevelopment
Authority (HRA) from all liability and claims for damages arising from bodily injury, death,
property damage, sickness, disease, or loss of expense resulting from or alleged to result from
Contractor's operations under this contract.
2. Independent Contractor
For the purpose of this Agreement, the Contractor shall be deemed to be an independent Contractor,
and not an employee of the City of Hutchinson/Hutchinson HRA. Any and all employees of the
Contractor or other persons, while engaged in the performance of any work or services required to be
performed under this Agreement, shall not be considered employees of City of
Hutchinson/Hutchinson HRA and any and all claims that may or might arise on behalf of said
employees or other persons as a consequence of any act or omission on the part of said employees or
the Contractor shall in no way be the obligation or responsibility of the City of
Hutchinson/Hutchinson HRA.
3. Insurance
Before commencing work, Contractor shall furnish with certificates that the following insurance is in
force. Policies shall be submitted for approval of the City of Hutchinson/Hutchinson HRA and shall
be endorsed to provide that the policies will not be canceled or changed until ten days after written
notice of change or cancellation has been delivered to the City of Hutchinson/Hutchinson HRA.
Coverage shall be at least as follows:
Class of Coverage Bodily Injury Property Damage
(1) Manufacturer's & Contractor's $300,000 $100,000
(2) Product Incl. Compl Operations $300,000 $100,000
(3) Auto Owned, Hired or Leased $300,000 $100,000
(4) Workers' Compensation As Required
If any such insurance is due to expire during the construction period, the Contractor shall not permit
the coverage to lapse and new certificates shall be furnished to the City of Hutchinson/Hutchinson
HRA.
Loan ClosingHave the owner sign the program loan documents. Different closing process/forms are required for the different programs.
Example of possible forms needed:
• Truth in Lending
• Promissory Note
• Notice of Rescission
• Repayment Agreement / Mortgage
• Note and Manufactured Home Security Agreement
• Assignment of Mortgage (homeowner doesn’t sign)
• Escrow Agreement
• Closing Disclosure, HUD-1 or HUD-1A
• Invoices for Closing Costs, Owner Match, and Recording Fee(s)
Construction Management
• Change Orders – Please NO!!
But if one is needed, All have to agree to it before the work is started! May even require funding source approval. Make sure to amend/modify the Note and/or Mortgage too!
• Before pay request inspection, contractor must have the homeowner sign the payment request form.
• Contractor calls to set up the inspection directly with inspector. (Have the inspector sign off on the pay request too.)
Construction Issues
Deterioration that is hidden behind the surface – roof & siding.
Homeowner Complaints:
• Color Selection – If meets work write-up spec’s - color doesn’t matter.
• Window type – i.e. sliders vs. crank out
Contractor Complaints:
• Cleanliness (pet issues) & stuff in the way, hard to do work.
Making Side Deals are Not Good for either side!
Pay Requests
• Payments only released after:
–Homeowner’s approval:
• Sign Contractor Payment/Inspection Request form of Completion Certificate
–Rehab inspector’s approval
• Sign Completion Certificate (not required for all programs)
–Post rehab radon test below 2 pCi/L (if applicable)
– Lead clearance (if applicable)
– Lien waivers & sworn construction statements received (Mark will go into more details on this.)
CONTRACTOR PAYMENT/INSPECTION REQUEST Owner: Property Owner: ______________ Project#: ________________
Address: __________________________ Progress Payment
Hutchinson, MN 55350 Final Payment
________________________________________________________________________________________________________________________
To be completed by Contractor:
I hereby request an inspection to receive payment #_ for the amount of $ .
I certify that I have satisfactorily completed the necessary work to justify this request
and the all bills incurred for labor used and materials furnished in making said repairs
and improvements have been paid in full to this date. See attached cost breakdown.
Contractor's Signature: _______________________________ Date:__________
____________________________________________________________________
Owner:
I/We hereby agree that the work stated by the contractor has been completed and
approve payment to the contractor in accordance with the Warranty and conditional
upon inspection and approval by the Rehabilitation Program. It is understood that the
actual amount disbursed will be based on the findings of that inspection.
Owner's Signature: _________________________________ Date: _________
____________________________________________________________________
BID SPECIFICATIONS TO BE INSPECTED:
Page: Spec Number(s)
________________________________ __________________
Rehabilitation Housing Inspector Date
HRA Staff:
I hereby certify that all work is completed as indicated on the contractor's payment
request. I hereby request approval of the payment to the contractor in the amount of $
.
HRA Staff Signature: ______________________________ Date: _________
Project Completion/Close-outAfter all the contractor payments are paid:
• Close-out letter to the homeowner:
– Loan amount
– Payback or forgiveness date
– Contractor’s contract information for the warranty
• Attached:
– Copy of signed Completion Notice
– Copy of Mortgage &/or Promissory Note
– Subordination Guidelines (if applicable)
– Customer Satisfaction Survey (Asking for a Testimonial for Marketing)
MHFA REHAB LOAN PROGRAM
CLOSEOUT LETTER
Date: Xxxx X, 20XX
Dear Ms. Smith:
This letter serves as the official closing statement for your rehabilitation
program loan.
The final inspection has been made. The work has been done according to
specifications and final payment has been made. Copies of the Completion
Certificate, Rehab Loan Program Note, the Rehab Loan Program Mortgage
and Modification of Note and Mortgage Agreement are enclosed with this
letter. A lien waiver has been received for all disbursements and is on file at
the Hutchinson HRA office. Your MHFA RLP loan is in the amount of
$XX,XXX.00.
Please remember that you are required to notify the MHFA if the improved
property changes owners. Repayment of the loan is required after the
property ceases to be owned by the original borrower. If you reside at the
improved property for the required fifteen years, the MHFA RLP Loan will
be forgiven Xxxx X, 20XX.
Satisfaction for the work is guaranteed for one year after completion. Please
contact XXXX Construction LLC (XX-XX-XXXX) if any problems arise.
Thank you for your participation in the MHFA Rehabilitation Loan Program.
Sincerely,
Judy Flemming
HRA Program Coordinator
Questions?
Judy Flemming
Program Coordinator
320-234-4451