Posts made in May, 2007

Whose Responsibility is it?…

Posted By on May 4, 2007

One of the drawbacks for modular home builders is a residual from the early mobile home days when mobile homes were sold like cars. For every little noise and squeak in their new home, the customer called the dealer and expected a service crew to come and fix it. This would last sometimes for months, until the dealer refused and the customer got angry. So from the beginning the mobile home industry has had a bad service reputation, and the customer has had a hard time separating the modular industry away from this misnomer. In some cases, a modular home builder has not lived up to their contract, and this has perpetuated a perceived service issue with all modular homes. The National Association of Home Builders (NAHB) has an excellent publication to help set expectations for construction. The “Residential Construction Performance Guidelines”; a consumer reference, is a forty page guide to set an expectation for the performance of goods and services provided by the residential construction industry. Zoning laws and building codes are concerned with health, safety and welfare issues, but there is no guarantee of performance within the industry. While this guide is not legally binding, it has been used in some states as a basis for evaluating performance when dispute has lead to litigation or arbitration. The publication is divided into sections that cover:

  • Site Work and Foundation
  • Floors, Walls, and Roofs
  • Plumbing and Electrical, Including Interior Climate Control
  • Interior and Floor Finishes
  • Fireplace and Wood Stove
  • Concrete Stoops and Steps
  • Garage, Driveways and Sidewalks
  • Wood Decks
  • Landscaping

The guide helps separate if the responsibilty lies with the contractor, the consumer or the manufacturer. The consumer, once they move into a home, is responsible for routine maintenance and upkeep. These items are not the obligation of the contractor or the manufacturer. This comes as a surprise to many modular and manufactured home owners, because they are under the assumtpion that their home warranty is a blanket coverage. The home warranty is not a 10,000 mile or ten year warranty that you get with your car. The home warranty covers structural issues.

If you would like a copy of the “Residential Construction Performance Guidelines”, visit They are available for a reasonable charge.

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Zoning and Modular Homes

Posted By on May 4, 2007

Modular housing that complies with state construction standards must be allowed in all zones where single family residences are allowed. That sounds pretty cut and dried, doesn’t it? So, why are there always zoning issues cropping up? There are several areas where the rules might get confusing.

First, there are differences between manufactured housing (previously referred to as mobile homes) and modular housing. In some cases that means different zoning laws. Maine is one of a handful of states that mandates the allowance of both manufactured and modular homes on property zoned residential.

Second, Code Enforcement personnel in individual towns may or may not be familiar with the building codes under which these homes are regulated. The construction of the actual home is mandated by standards set forth in either the HUD or the BOCA codes. These codes supercede any town codes that may be in place.

Third, there may be ordinances within an association or a sub-division that restrict either (or both) manufactured/modular homes. Also, there may be covenants written in a deed that restrict the type of building that may be placed there. These restrictions are in addition to any zoning and should not be confused with zoning regulations.

The best advice is to go to the town office where you are planning to build to get their regulations in writing, then review your deed to ascertain there are no restrictions. If you are not sure about something, ask questions. Knowing this information in the beginning of your project will save time and unnecessary heart ache. It is just one more step to organizing a successful home building experience.

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A Good Construction Contract

Posted By on May 4, 2007

A contract is a binding agreement which is legally enforceable. There are a lot of gray areas in construction projects, so a good contract is particularly important. Make sure your construction contract covers at least the following areas:

  • It should be written on company letterhead.
  • It should contain the company’s name, address and phone number.
  • It should contain the consumer’s name, address (where the work is to be performed) and phone number.
  • It should be dated the day it is written.
  • It should include a detailed description of the work that is to be performed.
  • It should provide a dollar amount associated with each task included in the project.
  • It should include an estimated time line.
  • It should provide a payment schedule.
  • It should clearly state whether permits will be pulled and who will be responsible for pulling them.
  • Make sure there is a provision for all changes to the original contract to be in writing, and signed by both parties.

A contract is there to clarify communication between the parties and to protect both the consumer and the contractor from a misunderstanding. Take care to make sure the contract includes all the information necessary to make your project a good experience.

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Contingency Funds

Posted By on May 4, 2007

New construction and contingency funds, a confusing mix. There are different kinds of contingency funding that your lender may build into your loan. There can be a contractor’s contingency, available to the contractor to cover cost overrun of the contract price. These funds may be unconditionally available to the contractor. There may also be a lender’s contingency that is available to the borrower, to cover any unplanned expenses that may not be included in the builder’s contract. These funds if not used, may be used to pay down the original amount of the loan.

The point is, there is a possibility of a 15% contingency fund for your contractor and a 15% contingency fund for you as a borrower. This is a double edged sword. On the one hand, the funds are available to cover unforeseen expenses. On the other hand, with contingency funds built into your loan, it may restrict the amount you can borrow. The total dollar amount you “might” spend will need to be within the total limit you can borrow based on the equity in your property.

Some banks that are accustomed to working with the modular housing industry are willing to reduce the contingency fund built into your home loan. The portion of your loan that covers the construction of the home is a fixed cost. The home is built at the factory and the price is a given. A contingency fund on the construction cost of the home is not necessary. This frees up funding for your project. With a reduction in contingency funds needed for your home, you might be able to add on that wrap-a-round porch you always dreamed of. This is just one more reason to consider building a modular home.

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“The Ultimate Home Value with Quality, Durability and Flexibility in Design”, this is the promise from Eagle River Homes in Leola, PA. Eagle River is a new manufacturing facility based on an old idea – affordable housing.

The management team at Eagle River is a conglomeration of some of the best in the business. “Walt Young is the proud founding ‘father’ of the plant with an extended family that will make anyone snap to attention. Jim Dunn, of Champion fame is the President of Eagle River, Craig Pike, formerly of Redman is Production manager with Nick Mangano, former GM of Clayton Homes as Sales Manager and Sam Hollister, former GM of Redman as the new VP & General Manager of the plant.” Their combined experience has prompted them to focus on building the home right, not on the number of homes they produce.

The folks at Eagle River want to offer a flexible package, beginning with a low to mid range priced home. The consumer can build up from there with a host of available options. For those “green-minded” consumers an Energy Star home is available.

When production was just beginning in the fall of 2006, Eagle River had 65 employees. Now, just six months down the road they have already geared up to 109 employees and are steadily producing five floors a day. Energy and enthusiasm continue to pervade as Eagle River strives to build a home that accomodates the customers needs.

To view a model manufactured by Eagle River stop by Schiavi Home Builders on route 26 in Oxford.

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