Although the real estate market is rebounding nicely after last decade’s debacle, many places throughout Maryland still have a shortage of listings. But before you give up on the search and just build your own dream house, there are a few things you may want to factor in first. New construction carries some legal concerns that your average real estate transaction simply does not—along with all of the other joys of home ownership.
Finding the right site for your future home and purchasing it is just the first legal transaction of many you’ll have to navigate throughout this process. Afterward, you begin the bureaucratic path to your new house. Before any work can begin, you must first obtain a building permit and settle any applicable local impact fees, which are charged by local and/or state governments to offset the additional cost you’ll cause public services. You’ll likely also want to consult with an architect who can design your dream home and draw up the necessary plans, unless you go with a model already designed by the builder. With the latter option, though, you’ll lose a certain amount of customizability. Unfortunately, each of these additional steps also adds to the overall cost of your home. These upfront expenses don’t usually appear with a pre-built home, so make sure you budget for them. Here’s a rough idea of what you can expect to pay based on recent national averages: https://www.realtor.com/advice/buy/cost-to-build-a-house/. While the last thing you probably want to add to this tally is legal fees, but keep in mind that each transaction requires an official contract.
If you’re relying solely on the other party to provide an ironclad contract, you don’t always know that that document is protecting your best interests. Take an architectural agreement, for example. The American Institute of Architects (AIA) has many standard form documents for various situations, however these documents are drafted primarily to protect the architect and not the homeowner, contractor or homebuilder. Therefore, if you are looking for your interests to be protected, it is very wise to have an attorney draft an amendment to protect your interests. Working with a reliable architect offers some peace of mind, but a great contract can do much more. Especially after it was recently discovered that one member of this field was operating for years without the proper education or licensure. Read his story here: http://www.architectmagazine.com/practice/architect-goes-to-jail-world-shrugs_o.
Possibly the most important aspect of this entire process comes down to the builder/construction contract. This is what ensures the house is built properly and defines who’s going to pay for things, if it’s not properly built. Many people assume that buying a completely new house will prevent many of the maintenance issues that arise with older properties. Unfortunately, design flaws or missing elements can be just as destructive, if not more so, to the structure and integrity of a home than time. Having a warranty written into the contract and backed up by a third-party warranty company is a great provision to insist upon, even if it’s only for a limited time. Similarly, you may want to have the right to create a “punch list” of your own before construction is finalized. This would allow you (or an expert) to review the structure and scan for potential defects. In turn, the builder has a specific amount of time, such as 30 or 60 days, to correct the matters or allow you to fix at the cost of the builder. It doesn’t have to be a monumental flaw either; it could be a missing upgrade you paid for, or mismatched fixtures. However, if you want it fixed, the simple truth is someone has to pay for that—do you want it to be you or your contractor? For more ideas of what to ask during this part of the process, check out this article: https://www.lawyers.com/legal-info/real-estate/residential-real-estate/special-problems-in-new-home-construction.html.
Now, if you’re thinking about avoiding many of these expenses and potential pitfalls by keeping it small, you may want to reconsider. The new “tiny home” craze can seem appealing, but many cities and states require a minimum standard for new construction that doesn’t align with this form of downsizing. Additionally, zoning laws don’t always permit these types of dwellings for full-time use—especially those with wheels. Learn about the unexpected struggles associated with this fad: https://www.curbed.com/2016/9/22/13002832/tiny-house-zoning-laws-regulations.
Regardless of what type of home you’re looking to build, the process is invariably more complicated than you expected. While we may not be construction experts, we are well versed in construction law, so we can represent your best interests, every step of the way. When you’re trying to decide on what to skimp on and what to splurge on for your dream home, make sure you budget for the best legal protection before it’s even built.