Form 2420 - Homeowner/contractor Agreement - Fha 203(K) Rehabilitation Program (Page 2 of 3) in pdf

3. Contractor: The contractor will supervise and direct the work and the work of all subcontractors. He/she will use

the best skill and attention and will be solely responsible for all construction methods and materials and for

coordinating all portions of the work. Unless otherwise specified in the Agreement, the contractor will provide for

and/or pay for all labor, materials, equipment, tools, machinery, transportation, and other goods, facilities, and

services necessary for the proper execution and completion of the work. The contractor will maintain order and

discipline among employees and will not assign anyone unfit for the task. The contractor warrants to the owner

that all materials and equipment incorporated are new and that all work will be of good quality and free of defects

or faults. The contractor will pay all sales, use and other taxes related to the work and will secure and pay for

building permits and/or other permits, fees, inspections and licenses necessary for the completion of the work

unless otherwise specified in the Agreement. The contractor will indemnify and hold harmless the owner from and

against all claim, damages, losses, expenses, legal fees or other costs arising or resulting from the contractors

performance of the work or provisions of this section. The contractor will comply with all rules, regulations, laws,

ordinances and orders of any public authority or HUD inspector bearing on the performance of the work. The

contractor is responsible for, and indemnifies the Owner against, acts and omissions of employees, subcontractors

and their employees, or others performing the work under this Agreement with the contractor. The contractor will

provide shop drawings, samples, product data or other information provided for in this Agreement, where

necessary.

4. Subcontractor: Selected by the contractor, except that the contractor will not employ any subcontractor to whom

the owner may have a reasonable objection, nor will the contractor be required by the owner to employ any

subcontractor to whom the contractor has a reasonable objection.

5. Work by Owner or Other Contractor: The owner reserves the right to perform work related to the project, but which

is not a part of this Agreement, and to award separate contracts in connection with other portions of the project not

detailed in this Agreement. All contractors and subcontractors will be afforded reasonable opportunity for the

storage of materials and equipment by the owner and by each other. Any costs arising by defective or ill-timed

work will be borne by the responsible party.

6. Binding Arbitration: Claims or disputes relating to the Agreement or General Provisions will be resolved by the

Construction Industry Arbitration Rules of the American Arbitration Association (AAA) unless both parties mutually

agree to other methods. The notice of the demand for arbitration must be filed in writing with the other party to this

Agreement and with the AAA and must be made in a reasonable time after the dispute has arisen. The award

rendered by the arbitrator(s) will be considered final and judgment may be entered upon it in accordance with

applicable law in any court having jurisdiction thereof.

7. Cleanup and Trash Removal: The contractor will keep the owner’s residence free from waste or rubbish resulting

from the work. All waste, rubbish, tools, construction materials, and machinery will be removed promptly after

completion of the work by the contractor.

8. Time: With respect to the scheduled completion of the work, time is of the essence. If the contractor is delayed at

anytime in the progress of the work by change orders, fire, labor disputes, acts of God or other causes beyond the

contractor’s control, the completion schedule for the work or affected parts of the work may be extended by the

same amount of time caused by the delay. The contractor must begin work no later than 30 days after loan

closing and will not cease work for more than 30 consecutive days.

9. Payments and Completion: Payments may be withheld because of (1) defective work not remedied; (2) failure of

contractor to make proper payments to subcontractors, workers, or suppliers; (3) persistent failure to carry out

work in acceptance with this Agreement or these general conditions, or (4) legal claims. Final payment will be due

after complete release of any and all liens arising out of the contract or submission of receipts or other evidence of

payment covering all subcontractors or suppliers who could file such a lien. The contractor agrees to indemnify

the Owner against such liens and will refund all monies including costs and reasonable attorney’s fees paid by the

owner in discharging the liens. A 10 percent holdback is required by the lender to assure the work has been

properly completed and there are no liens against the property.

Owners Initials:

_____ _____

Contractor’s Initials:

_____ _____

-Continued on Page Three-

FHA 203(k) Home Owner - Contractor Agreement

Loan #:

Form 2420 Rev. 1/5/05

Borrower:

Form 2420 - Homeowner/contractor Agreement - Fha 203(K) Rehabilitation Program Page 2

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