Fill - Free fillable Construction Contract Cost Plus (Web Master Pulic Affair) PDF form

form HUD-92442-A (11/00)

ref Handbook 4430.1

Replaces forms FHA-2442A, which is obsolete

Previous editions are obsolete

Page 1 of 4

U.S. Department of Housing

and Urban Development

Office of Housing

Federal Housing Commissioner

Construction Contract

Cost Plus

OMB Approval No. 2502-0011 (exp. 9/30/2013)

This Agreement, made the ____________ day of __________________ 20____, between __________________________________

____________________________________________________________________________ (hereinafter called the “Contractor”) and

____________________________________________________________________________ (hereinafter called the “Owner”).

Witnesseth, that the Contractor and the Owner, for the consideration hereinafter set out, agree as follows:

Article 1: Scope of Contract

A. The Contract between the parties is set forth in the “Contract

Documents,” which consist of this Agreement, the Drawings and

Specifications, which include the current edition of AIA Document

A201, “General Conditions of the Contract for Construction,” and

Form HUD-2554, “Supplementary Conditions of the Contract for

Construction.” The provisions of this instrument and the said HUD

Supplementary Conditions take precedence over all inconsistent

provisions in the said AIA General Conditions. This Contract consti-

tutes the entire agreement between the parties, and any previously

existing contract concerning the work contemplated by the Contract

Documents is hereby revoked.

B. The Contractor shall furnish all of the materials and perform all

of the work (within the property lines) shown on, and in accordance

with, the Drawings and Specifications entitled ______________

_________________________________________________

HUD Project No.___________________, dated _______________.

C. The Drawings, which are numbered _____________________,

and the Specifications, the pages of which are num-

bered___________

_________________________________________________

, _________________________________________________

have been prepared by _______________________________

__________________________________ (“Design Architect”).

The Architect administering the Construction Contract (hereinafter,

and elsewhere in the Contract Documents, referred to as the

“Architect”) is _______________________________________

_________________________________________________

D. A master set of said Drawings and Specifications, identified by

the parties hereto and by the Design Architect, the Architect, and the

Contractor's Surety or Guarantor have been placed on file with the

Federal Housing Commissioner (hereinafter referred to as the “Com-

missioner”), and shall govern in all matters which arise with respect

to such Drawings and Specifications.

E. Changes in the Drawings and Specifications or any terms of the

Contract Documents, or orders for extra work, or changes by altering

or adding to the work, or which will change the design concept, may

be effected only with the prior written approval of the Owner's Lender

(more particularly identified below and hereinafter referred to as the

“Lender”) and the Commissioner and under such conditions as either

the Lender or the Commissioner may establish.

Article 2: Time

A. The work to be performed under this Contract shall be com-

menced within ______ days of this Agreement, and shall be com-

pleted by __________________, 20____. The time by which the

work shall be completed may be extended in accordance with the

terms of the said AIA General Conditions only with the prior written

approval of the Commissioner.

B. The Contractor shall correct any defects due to faulty materials

or workmanship which appear within one year from the date of final

completion.

C. If the work is not brought to final completion in accordance with

the Drawings and Specifications, including any authorized changes,

by the date specified above, or by such date to which the contract

time may be extended, the maximum sum stated in Article 3A(1)

below shall be reduced by $_______________, as liquidated dam-

ages, for each day of delay until the date of final completion. When

the Owner cost certifies to HUD, the actual cost of interest, taxes,

insurance, mortgage insurance premiums, and construction and

permanent loan extension fees, as approved by the Commissioner,

for the period from the scheduled date of completion through the date

construction was actually completed, shall be determined. The

lesser of the liquidated or actual damages shall be applied. The

applicable amount shall be reduced by the project's net operating

income (as determined by the Commissioner) for the damage period.

Public Reporting Burden for this collection is estimated to average 16 hours per response, including the time for reviewing, searching existing

data sources, gathering and maintaining the data needed, and compiling and reviewing the collection of information. Send comments regarding this

burden estimate or any other aspect of this collection of information, including suggestions for reducing this burden, to the Reports Management Officer,

451 7

Street SW, Washington, DC 20410-3600.

The Department of Housing and Urban Development (HUD) is authorized to collect this information by provisions set forth in Article 1.E of the

National Housing Act (Public Law 479, 48 Stat. 1246, 12 U.S.C., 1701 et. seq.). This information is necessary for contractors and mortgagors to obtain

approval from the FHA Commissioner’s to document the terms of any Contract Document, or order for extra work, or change by altering or adding to the

work, or which will change the design concept. The information is used by HUD to ensure that viable projects are being developed. Furnishing of this

information is mandatory, and failure to provide it may result in your not receiving your benefits. This agency may not conduct or sponsor, and a person is

not required to respond to a collection of information unless that collection displays a valid OMB number.

Privacy Act Notice. The United States Department of Housing and Urban Development, Federal Housing Administration, is authorized to

solicit the information requested in this form by virtue of Title 12, United States Code, Section 1701 et seq., and regulations promulgated thereunder at

Title 12, Code of Federal Regulations. While no assurances of confidentiality is pledged to respondents, HUD generally discloses the data only in

response to a Freedom of Information request. This agency may not conduct or sponsor, and a person is not required to respond to, a collection of

information unless that collection displays a valid OMB control number.

form HUD-92442-A (11/00)

ref Handbook 4430.1

Replaces forms FHA-2442A, which is obsolete

Previous editions are obsolete

Page 2 of 4

D. The Owner and Contractor may amend this contract prior to

initial endorsement (insurance of advances projects) or upon execu-

tion of the construction contract (insurance upon completion projects),

in a form prescribed by the Commissioner, to provide for an incentive

payment to the Contractor, which will result in an increase in the

contract sums stated in Article 3A below, if the work is completed

before the date specified in this contract. The Contractor will not be

entitled to any incentive payment resulting from early completion if

HUD determines that the Contractor's cost certification, required by

Article 10, is fraudulent or materially misrepresents the Contractor's

actual cost of construction.

E. The date of final completion shall be the date the HUD represen-

tative signs the final HUD Representative's Trip Report provided that

the trip report is subsequently endorsed by the Chief Architect.

Article 3: Contract Sum and Payments

A. (1) Subject to the provisions hereinafter set out, the Owner

shall pay to the Contractor for the performance of this Contract the

following items in cash:

(a) The actual cost of construction as defined in Article 10

below; plus

(b) A fee of $ _____________________.

In no event, however, shall the total cash payable pursuant

to this paragraph (1) exceed $ ____________________.

(2) In addition to any cash fee provided for in paragraph (1), the

Owner shall pay to the Contractor by means other than cash, the

following:

(a) A note in the form prescribed by the Commissioner in

the amount of $ _______________________ .

(b)

(3) If, upon completion, the Contractor shall have received

cash payments in excess of (a) the actual cost of construction, plus

(b) the cash fee specified in paragraph (1), plus the additional

amount to be paid under the provisions of paragraph (2), all such

excess shall be refunded to the Owner.

B. Each month after the commencement of work hereunder, the

Contractor shall make a monthly request on Form HUD-92448 for

payment by the Owner for work done during the preceding month.

Each request for payment shall be filed at least ___________ days

before the date payment is desired. Subject to the approval of the

Lender and the Commissioner, the Contractor shall be entitled to

payment thereon in an amount equal to (1) the total value of classes

of the work acceptably completed; plus (2) the value of materials and

equipment not incorporated in the work, but delivered to and suitably

stored at the site; plus (3) the value of components stored off-site in

compliance with applicable HUD requirements; less (4) 10 percent

holdback and less prior payments. The “values” of (1), (2) and (3)

shall be computed in accordance with the amounts assigned to

classes of work in the “Contractor's and/or Mortgagor's Cost Break-

down,” attached hereto as Exhibit “A”. The Contractor agrees that no

materials or equipment required by the Specifications will be pur-

chased under a conditional sale contract or with the use of any

security agreement or other vendor's title or lien retention instru-

ment.

C. The balance due the Contractor hereunder shall be payable

upon the expiration of 30 days after the work hereunder is fully

completed, provided the following have occurred.

(1) All work hereunder requiring inspection by municipal or

other governmental authorities having jurisdiction has been in-

spected and approved by such authorities and by the rating or

inspection organization, bureau, association or office having juris-

diction;

(2) All certificates of occupancy, or other approvals, with re-

spect to all units of the project have been issued by State or local

governmental authorities having jurisdiction; and

(3) Permission(s) To Occupy (Form HUD-92485) for all units of

the project have been issued by the Commissioner.

D. With its final application for payment by the Owner, the Contrac-

tor shall disclose, on a form prescribed by the Commissioner, all

unpaid obligations contracted in connection with the work performed

under this Contract. The Contractor agrees that within 15 days

following receipt of final payment, it will pay such obligations in cash

and furnish satisfactory evidence of such payment to the Owner.

Article 4—Receipts & Releases of Liens

The Owner may require the Contractor to attach to each request for

payment its acknowledgement of payment and all subcontractors'

and material supplier's acknowledgements of payment for work done

and materials, equipment and fixtures furnished through the date

covered by the previous payment. Concurrently with the final pay-

ment, the Owner may require the Contractor to execute a waiver or

release of lien for all work performed and materials furnished

hereunder, and may require the Contractor to obtain similar waivers

or releases from all subcontractors and material suppliers.

Article 5—Requirements of Contractor

A. The Contractor shall furnish, at its own expense, all building and

other permits, licenses, tools, equipment and temporary structures

necessary for the construction of the project. The Contractor shall

give all required notices and shall comply with all applicable codes,

laws, ordinances, rules and regulations, and protective covenants,

and with the current regulations of the National Board of Fire

Underwriters, wherever applicable. The Contractor further shall

comply with the provisions of the Occupational Safety and Health Act

of 1970. The Contractor shall immediately notify the Commissioner

of the delivery of all permits, licenses, certificates of inspection,

certificates of occupancy, and any other such certificates and instru-

ments required by law, regardless of to whom issued, and shall

cause them to be displayed to the Commissioner upon his request.

B. If the Contractor observes that the Drawings and Specifications

are at variance with any applicable codes, laws, ordinances, rules or

regulations, or protective covenants, it shall promptly notify the

Architect in writing, and any necessary changes shall be made as

provided in this Contract for changes in the Drawings and Specifica-

tions. If the Contractor performs any work knowing it to be contrary

to such codes, laws, ordinances, rules or regulations, or protective

covenants, without giving such notice to the Architect, it shall bear all

costs arising therefrom.

form HUD-92442-A (11/00)

ref Handbook 4430.1

Replaces forms FHA-2442A, which is obsolete

Previous editions are obsolete

Page 3 of 4

C. Upon completion of construction, the Contractor shall furnish to

the Owner a survey showing the location on the site of all improve-

ments constructed thereon, and showing the location of all water,

sewer, gas and electric lines and mains, and of all existing utility

easements. Such survey shall be prepared by a licensed surveyor

who shall certify that the work is installed and erected entirely upon

the land covered by the mortgage and within any building restriction

lines on said land, and does not overhang or otherwise encroach

upon any easement or right-of-way of others. In addition, the Con-

tractor shall furnish additional surveys when required by the Owner

for any improvements, including structures and utilities, not thereto-

fore located on a survey. The Contractor shall furnish copies of such

survey required hereunder for the Lender and the Commissioner.

D. The Contractor shall assume full responsibility for the mainte-

nance of all landscaping which may be required by the Drawings and

Specifications until such time as both parties to this Contract shall

receive written notice from the Commissioner that such landscaping

has been finally completed. The Owner hereby agrees to make

available to the Contractor, for such purpose, without cost to the

latter, such facilities as water, hose and sprinkler.

Article 6—Assurance of Completion

The Contractor shall furnish to the Owner assurance of completion of

the work in the form of (specify) __________________________

__________________________________________________

_________________________________________________ .

Such assurance of completion shall run to the Owner and the Lender

as obligees and shall contain a provision whereby the surety agrees

that any claim or right of action that either the Owner or the Lender

might have thereunder may be assigned to the Commissioner.

Article 7—Waiver of Lien or Claim

The Contractor shall not file a mechanic's or materialman's lien or

maintain any claim against the Owner's real estate or improvements

for or on account of any work done, labor performed or materials

furnished under this Contract, and shall include in each subcontract

a clause which shall impose this requirement on the subcontractor.

Article 8—Right of Entry and Interpretation

A. The Lender and its agents or assigns and the Commissioner and

his agents shall, at all times during construction, have the right of

entry and free access to the project and the right to inspect all work

done and materials, equipment and fixtures furnished, installed or

stored in and about the project. For such purpose, the Contractor

shall furnish such enclosed working space as the Lender or Commis-

sioner may require and find acceptable as to location, size, accom-

modations and furnishings.

B. The Commissioner shall also have the right to interpret the

Contract Documents and to determine compliance therewith.

Article 9—Assignments, Subcontracts and Termination

A. This Contract shall not be assignable by either party without the

prior written consent of the other party, the Lender and the Commis-

sioner, except that the Owner may assign the Contract, or any rights

hereunder, to the Lender or the Commissioner.

B. The Contractor shall not subcontract all of the work to be

performed hereunder without the prior written consent of the Owner,

the Lender and the Commissioner.

C. Upon request by the Owner, the Lender or the Commissioner,

the Contractor shall disclose the names of all persons with whom it

has contracted or will contract with respect to work to be done and

materials and equipment to be furnished hereunder.

D. The Contractor understands that the work under this contract is

to be financed by a building loan to be secured by a mortgage and

insured by the Commissioner, and that the terms of said loan are set

forth in a Building Loan Agreement between the Owner as Borrower

and___________________________________________________

_________________________________________________

_________________________________________ as Lender.

The Contractor further understands that said Building Loan Agree-

ment provides that, in the event of the failure of the Owner to perform

its obligations to the Lender thereunder, the Lender may, as attor-

ney-in-fact for the Owner, undertake the completion of the project in

accordance with this Contract. In the event the Lender elects not to

undertake such completion, the Contractor's obligations under this

contract shall terminate.

Article 10—Certification of Actual Cost

A. The “actual cost of construction,” as used in Article 3 above,

shall include all items of cost and expense incurred by the Contractor

in the performance of this Contract, including costs and expenses of

labor, materials for construction, equipment and fixtures, field engi-

neering, sales taxes, workmen's compensation insurance, social

security, public liability insurance, job overhead and all other ex-

penses directly connected with construction, and including general

overhead expenses, but excluding kick-backs, rebates or discounts

received or receivable in connection with the construction of the

project; and excluding any return on or cost of the Contractor's

working capital, such return on or cost of working capital being a part

of or to be paid from the Contractor's fee or profit.

B. The Contractor shall keep accurate records of account of the

said actual cost of construction, and shall, upon demand, make such

records and invoices, receipts, subcontracts and other information

pertaining to the construction of the project available for inspection

by the Owner and the Commissioner.

C. With its final application for payment, the Contractor shall

furnish to the Owner a completed “Contractor's Certificate of Actual

Cost,” which shall be accompanied and supported by an indepen-

dent public accountant's certificate as to actual cost (in form accept-

able to the Commissioner).

D. The Contractor shall include in all subcontracts, equipment

leases and purchase orders a provision requiring the subcontractor,

equipment lessor or supplier to certify its costs incurred in connection

with the project, in the event the Commissioner determines there is

an identity of interest between either the Owner or the Contractor and

any such subcontractor, equipment lessor or supplier.

form HUD-92442-A (11/00)

ref Handbook 4430.1

Replaces forms FHA-2442A, which is obsolete

Previous editions are obsolete

Page 4 of 4

In Witness Whereof, the parties to these presents have executed this contract in six (6) counterparts, each of which shall be deemed an original,

in the year and day first above mentioned.

(Seal) Contractor

Witness By

Witness Title

(Seal) Attest: Owner

Witness By

Witness Title

Note: If Contractor or owner is a corporation, Secretary should attest.

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