Building your home is such a big step and offer several benefits including being able to design the home exactly to your specification. This in itself is enough reason for most people to opt for building their homes rather than buying one.
You can visit this page to find out more about this. However, there are several other drawbacks to building a home including a longer timeframe and higher costs. Hence, if you have decided to do this, you do not need anything that will prolong the process further or create any form of extra inconvenience.
This is why you must find a reliable surety company to properly protect you. Starting a project only to get stalled at some point without the fund to complete the project and no home in sight is the last thing you want to do. Contractor bonds have been known to protect homeowners from this pitfall among many others because it lets them know from the get-go the whole terms of the project.
This bond can be the big difference between whether or not you get to finish your project. In this article, we’ll be discussing 3 major ways this bond protects homeowners.
Table of Contents
1. Ensure the Project Gets Completed
This bond typically has the main purpose of guaranteeing the owner that the contractor finishes the project based on their agreement. Three parties typically are involved in this bond. First, the contractor otherwise called the principal, then the homeowner otherwise called the oblige, and finally the surety or insurance company, this is the party that issues the bond.
For a principal to be awarded the contract, they first have to show that they are capable of carrying out the project completely. The principal has to pay the surety company premiums.
Assuming the principal doesn’t keep their end of the deal (that is carry out the project completely), the homeowner will be compensated for the loss.
Working with a bonded contractor won’t just ensure your project gets completed but will also save you from unbudgeted and unnecessary expenses.
2. Ensure that The Estimated Timeframe is Adhered to
You most likely have a timeframe in which you need your project to be completed. If the project exceeds the timeframe that it was estimated to take, your expenses will only keep increasing.
Some unscrupulous contractors even deliberately drag on the construction for a long time to make sure that the homeowner gets drained so that their profits can be more.
With the bond, you’ll be protected from this kind of issue. So, you can ensure that the estimated timeframe is met. All you need to do is to ensure that your contractor agrees to a stipulated timeline.
3. Payment Bond
Alongside the performance aspect of the bond, the contractor also needs to have a payment agreement. This contract will ensure that every subcontractor and laborer employed during the project will be paid by the contractor.
During construction, contractors often need to get other hands on the job as they can’t do everything involved in building a home. Hence, to ensure that the subcontractors and laborers that will be employed are as competent as they come, ensure your contractor has this bond.
This way, they aren’t just enforced to finish your job and finish it in time, they also will be forced to hire only competent hands that will expertly do the job. You also won’t be left to sort out unpaid subcontractors’ dues and fees since the principal is in charge of the payments.
It doesn’t just stop at subcontractors and laborers; it goes beyond them to even parties that’ll supply the building materials. Not only will the workers be paid, but they will also be paid in due time. With the knowledge that their money will be paid, every hand employed for the project will most likely put in their all.
If you’ll like to find out more about contractor bond, then a quick visit to http://www.contractorbond.org should tell you everything you need to know.
Conclusion
Contractor bonds are contracts involving a contractor, Protect homeowners, and a surety company to ensure a contractor keeps to their end of the construction bargain. This contract goes a long way in protecting homeowners by ensuring the job gets done completely and in time.
