Before starting a construction project, one of the most important things you need to worry about is paperwork. Without this vital requirement, there is no way that your construction venture can go through.
In this article, we are going to discuss the list of all the necessary paperwork required for starting a construction project.
1. Insurance and Surety Bonds
Aside from the necessary permits, licenses, and other requirements for building a house in your locality, one of the most important things you need to have before you can start working on your project is insurance and surety bonds. You will not be allowed to work on your construction site without insurance and surety bonds.
These two are the bonding system available in every state for law-abiding companies who want to work within their area of operations.
It will serve as an assurance that whatever happens during the construction process, there is no way that liability or responsibility can be pinned down on them — this means that workers’ rights and benefits will not be violated wherever possible.
If you are looking for surety bonds in Pennsylvania, this will ensure both parties have certainty about their contractual relationship and be compensated if the agreements are not met.
A surety bond can also protect contractors from being held responsible for circumstances beyond their control, such as natural disasters.
2. Construction Loan Contract and Agreement
Construction loan contracts and agreements are just like any other loans that you can find in the market. The only difference is that it will be awarded to you by an agency that wants to see your construction project through.
If you are planning to receive a loan for this purpose, there are lots of important details and information that need to be carefully discussed before anything else goes on track.
For instance, if your construction project fails to meet their promised deadline, and you cannot pay back the loan within the specified period of time, they will have the right to take ownership of your property or hold it until such a time that you can fully settle all other due payments.
3. Construction Schedule for Your Target Completion Date
In order to achieve a successful construction project, you need to have a detailed and accurate construction schedule. Without this, you cannot successfully and smoothly move on to the next stage.
As such, it is crucial for your project plan to include a detailed list of all tradespeople who will be directly working with your construction site.
Thus, they need to be informed accordingly so that they can plan ahead and allocate their manpower and resources accordingly without any delays or setbacks in-between the process.
4. Letter of Intent
Today, there are lots of people who are willing to invest in your construction project — but just because you already have a lot of interested parties doesn’t mean that they will all agree to the given conditions and terms.
That is why once you sign on one particular contractor or supplier, it is really recommended for you to enter into a written agreement with them first before anything goes ahead.
This letter of intent serves as an official commitment on their part; at the same time, it also acknowledges all the terms and conditions that you need to fulfill while working on their site.
If something changes during this process like their previous workers suddenly quitting, change in ownership or management, etc., then this document will also serve as your legal agreement.
5. Site Layout Plan
This is perhaps one of the most important construction documents that you will need before starting your project. Your site layout plan should include detailed information about all the following details:
Number of stories in the building
- The size and dimensions of each story, including ceiling heights/clearances and wall thicknesses
- Location of all doors and windows, with measurements for each opening
- Location of stairs, ramps, railings, and handrails to meet accessibility standards when applicable
- Wall lengths between doorways or changes in floor elevation at doorways, when applicable
- Vertical circulation elements such as shafts, ladders, and dumbwaiters when applicable
In addition to these key points, you also have to specify whether there are any existing structures that are not part of your construction.
If it is shared, then you have to include the other party’s name as well as their contact information in case there are any issues involving them during the building process.
At the same time, this should also serve as a safeguard measure by specifying how much access they can have to your site during different times of the day or week.
6. Notice of Commencement
Once it is confirmed that all your construction documents are in order, then you can move on to the next step by filing a notice of commencement form. This document basically serves as an official announcement and declaration that you will be starting your construction project in the near future.
The general process for this is to wait for 30 days before receiving any permits, approvals, or licenses from your local authorities.
However, if there are numerous homeowners within the area who oppose your proposed plans, then it can take longer than expected before receiving such permission from them.
7. Certificate of Substantial Completion
This is a crucial construction document that you will need to present before starting your project. The primary reason for this is to ensure that all the applicable codes, local ordinances, and building codes have been addressed correctly.
In most cases, if you do not furnish them with a certificate of substantial completion at the end of your project, then they will also refuse to issue an occupancy permit as well.
Thus, it will become harder for your client base to move into their new homes as planned without going back on their word, which could cause future legal issues.
8. Payment Bonds
In order for a construction contractor or supplier to start working on your site, they would require a payment bond from you — this way, they can make sure that you are capable of paying them accordingly once their job has been completed.
However, there are limits to how much money is covered by a payment bond. Verbal agreements are not allowed, so if you have already agreed on any specific amounts from the start, then you might as well just give it to them as a down payment instead of signing a contract that forces you to meet those promises regardless of your financial situation.
These construction documents will help both parties in making sure that their project moves forward smoothly with minimum problems along the way.
By keeping everything organized and documented, stakeholders can avoid future legal disputes or disagreements due to communication issues within the workforce.