Certified Remodeler

Module 2: Building Codes and Construction

Law

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Module 2: Building Codes and Construction
Law

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Module 2: Building Codes and Construction
Law

A major determinant of a successful remodeler is the quality of his/her

work as judged by accepted public standards. Accepted standards not
only define the minimum quality of the finished product, but also the
manner in which the work is carried out. The purpose of this Study Guide
is to familiarize the remodeler with the sources of standards for building
practice that help to ensure the public of their health, welfare, and
protection of property.
Areas covered in the Study Guide and on the examination include accepted
standards regulating:
♦ design
♦ construction
♦ equipment installation
♦ quality of materials
♦ use and occupancy restrictions
♦ legal implications of business conduct
The following source should be reviewed and studied in order to familiarize
yourself with the relevant material:
♦ International Residential Code for One- and Two-Family Dwellings
(IRC) Current Edition
♦ Smart Business for Contractors, James M. Kranom, Taunton Books.

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Glossary
Accessory Structure – in one- and two-family dwellings not more than
three stories high, a building with a separate means of egress, the use of
which is incidental to that of the main building and which is located on the
same lot.
Approved – refers to approval by the building official as the result of
investigation and tests conducted by the official or by reason of accepted
principles or tests by nationally recognized organizations.
Approved Agency – an established and recognized agency regularly
engaged in conducting tests or furnishing inspection services when the
building official has approved such an agency.
Arbitration – the hearing and determination of a case between parties in
controversy by a person or person chosen by the parties or appointed
under statutory authority instead of by a judicial tribunal provided by law.
Building – any one- or two-family dwelling or portion thereof, including
townhouses, that is used, designed, or intended to be used for human
habitation for living, sleeping, cooking or eating purposes, or any
combination thereof, and shall include structures accessory thereto.
Building, Existing – a building erected prior to the adoption of this code or
one for which a legal building permit has been issued.
Building Official – the officer or other designated authority charged with
the administration and enforcement of the code.
Ceiling Height – the clear vertical distance from the finished floor to the
finished ceiling.
Contract – a legally binding agreement resulting from the objective
expression of mutual assent by competent parties.
Court – a space, open and unobstructed to the sky, located at or above
grade level on a lot, and bounded on three or more sides by walls or a
building.
Dwelling – any building that contains one or two "Dwelling Units" used,
intended, or designed to be built, used, rented, leased, let or hired out to

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be occupied, or which is occupied for living purposes.

Dwelling Unit – a single unit providing complete independent living
facilities for one or more persons, including permanent provisions for
living, sleeping, eating, cooking, and sanitation.
Family – an individual, two or more persons related by blood, marriage
or law, or a group of not more than any five persons living together in a
dwelling unit. Servants having common housekeeping facilities with a
family consisting of an individual, or two or more persons related by
blood, marriage, or law, are a part of the family for this code.
Fixed-price Contract – the most common form of general contract in
which the two parties agree to a fixed amount to be paid for the
performance of the entire work or the supplying of all the materials.
Grade – the finished ground level adjoining the building at all exterior walls.
Grade Floor Opening – a window or other opening located such that the
sill height of the window is not more than 44 inches above or below the
finished grade adjacent to the opening.
Habitable Room – a space in a building for living, sleeping, eating, or
cooking. Bathroom, toilets, clothes closets, halls, storage or utility spaces,
and similar areas are not considered habitable spaces.
Lien – a right of one to control, to hold and retain, or to enforce a charge
against the property of another until some claim of the former is paid or
satisfied.
Listed and Listing – terms referring to equipment that is shown in a list
published by an approved testing agency qualified and equipped for
experimental testing and maintaining an adequate periodic inspection of
current productions and whose listing states that the equipment complies
with nationally recognized standards when installed in accordance with
the manufacturer’s installation instructions.
Occupied Space – the total area of all buildings or structures on any lot or
parcel of ground projected on a horizontal plane, excluding permitted
projections as allowed by this code.
Retention – a holding back of a stated percentage of the total contract

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price until such time that the work is completed and approved.
Townhouse – a single-family dwelling unit constructed in a group of three
or more attached units in which each unit extends from foundation to roof
and with open space on at least two sides.
Unit-price Contract – the most common form of general contract in which
the two parties agree to a fixed amount for each unit of work performed or
material supplied.
Warranty – a collateral undertaking that a fact regarding the subject of a
contract is or will be as it is expressly or impliedly declared or promised to
be, and although breach of such an undertaking does not void the
contract, it does make the warrantor liable for damages.
Yard – an open space, other than a court, unobstructed from the ground
to the sky except where specifically provided by this code, on the lot on
which a building is situated.

Review Section
Building codes aim to protect the consumer from inadequate workmanship
and materials. They are not designed to ensure quality, comfort,
convenience, and durability. Another source should be referenced for
these criteria.
Your relationship with the various parties involved in a remodeling job
should be well defined and understood. In lieu of standard contracts that
are commonplace in the construction industry, this guide will be based on
past legal outcomes that are a result of written, implied, and standard
principles that define the relationship between contractors, suppliers, and
owners.
Building code books are developed and revised periodically by
independent groups of building officials. They do not become law until
government institutions, namely municipalities, adopt them as a basis for
standards of practice. Once adopted, compliance with the code is
checked through the means of building inspectors employed by the
municipality.

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Building codes are not all-inclusive and contradictions do arise. In these

cases, the building inspector has the final say. There were four main
building code organizations whose codes have been adopted in various
states. These are:
♦ Basic/National Building Code (BOCA)
♦ Standard Building Code (SBC)
♦ Uniform Building Code (UBC)
♦ Council of American Building Officials (CABO)
These codes have been combined into the one referenced in this Study
Guide, the International Residential Code for One- and Two-Family
Dwellings (IRC). The IRC is a synthesis of the codes adopted by all four
organizations, dealing specifically with one- and two-family dwellings.
While it is not necessary to commit large sections of the code to memory,
one should be able to locate pertinent provisions and tables quickly when
specific questions arise. Most codes are on a three-year cycle; in other
words, a new revision is issued every three years. The code in effect in
any one jurisdiction may not be the current version. In many cases, the
governing bodies have not adopted the current version of the code they
use, and the code in effect may be three to nine years out of date.
The Uniform Building Code has abandoned the three-year cycle to direct
their efforts to prepare and maintain the International Building Code.
In the construction business, you are going to have building code
problems. Every contractor has had an inspector hold up his job or delay
a permit until some minor discrepancy is handled just the way the code
requires. Every construction contract you sign assumes that you will build
according to the code. Your cooperation with the code and the building
inspector is going to save you a lot more money than confrontation will.
Legal problems are inherent in every stage of the contractor's daily
business. It is important that remodelers generally be aware of their legal
rights and liabilities. Remodelers must be aware of situations in which
they can benefit from the law and also recognize certain legal pitfalls in
sufficient time to safeguard their interests. Sometimes contractors'

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knowledge of the law is adequate to dispose of the problems as they

arise. However, when legal questions of immediate or potential
importance are presented, a lawyer should be consulted. The law
constantly haunts contractors and presents a continuing challenge to their
everyday activities.
Contractors should know their legal rights concerning the problems that
may be encountered in scheduling of the work, excusable delays, extra
costs for acceleration, and damages for delays. Contractors must also be
keenly aware of their rights in the very common practice of bidding in the
construction industry. They must be aware of the legal doctrines that
dictate when their bids become binding, when their bids are not
responsive, and when they may revoke their bids. Contractors must plan
their legal relationship with material suppliers so they may be adequately
protected if materials do not conform to the plans and specifications or are
delayed in being furnished.

Contracts
In short, a contract is an agreement between two (or more) parties to
perform some act or business. By agreeing to perform, the parties have
developed a law among themselves, or private law, and therefore, the
contract is binding.
Contracts come in many forms. Lawyers of the owner or contractor may
prepare them individually. Sometimes standard contracts, such as the
AlA Document (General Conditions of the Contract for Construction), are
adopted and used by other associations, such as Associated General
Contractors (AGC). The AlA documents have seen widespread use in
commercial and industrial construction projects, along with some
residential projects.
The typical contracts used for new homes by custom builders are often
one-page proposals. They usually state in only general terms the
materials and specifications. For remodeling work, in the past an oral
agreement along with a handshake was often the extent of the contract.

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Today, remodelers should use a contract that has been reviewed by a

lawyer to ensure they are in compliance with their state’s codes and laws.
Architectural drawing is frequently required as part of your contract. Here
is a list of drawings that an architect recommended for planning any
house. While not all of these are applicable to remodeling projects, all
pertinent ones should be included in the contract for the protection of both
the contractor and owner.
♦ Plot Plan
♦ Exterior Elevations (all sides)
♦ Foundation Plan
♦ Floor Plans
♦ Floor Framing Plans
♦ Roof Plan/Roof Framing Plan
♦ Wall and Foundation Section
♦ Window and Door Details
♦ Interior Elevations of Kitchen—all walls with cabinets
♦ Electrical plan—locations of switches, outlets, fixtures.
♦ HVAC Plan—locations of duct outlets
There should also be the following schedules listing all specifications and
sizes needed:
♦ Window Schedule
♦ Door Schedule
♦ Finish Schedule
Considering the wide variety of contracts that are used, the remodeling
contractor should develop a form that he/she is comfortable with. NARI
does not have a standard form to be adopted or modified; therefore, the
responsibility falls onto the individual.

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The contract must describe the obligation of both parties, and how
exhaustively they are described differs from area to area. In some areas,
strong cooperation between the owner and contractor prevails. In other
areas, contention may prevail. In developing a contract, remodelers must
ask themselves how they can obtain the most protection without risking the
good spirit of cooperation and mutual understanding.
Steps to developing an acceptable contract form:
1. Find and study other sample forms. Decide on the level of
protection necessary.
2. Work closely with your lawyers to prepare a form.
3. Communicate all terms of the contract with the client, and note
that it can be amended based on experience from job to job.
4. All communications taking place after the signing of the
contract can have the same binding force of the contract;
therefore, the discussions and understandings should be
clear and documented.
5. All parties should have signed copies of all amendments and
additions.
It is typical for clients to withhold 10% of the total payment until the owner
is satisfied and the work is at a point of substantial completion. Following
this point, a punch list is drawn up to complete any remaining details
before final payment. Jobs usually begin with the spirit of optimism and
concord, and it is typical for that spirit to be tried during the progress of the
work. It would be beneficial to have the same good spirit at both the
beginning and end of the project. To promote this, a contractor should
keep the lines of communication open, with an attitude of cooperation with
the owner. The terms of the contract, including job scope, cost, and
quality, should be clear at the outset of the agreement. An owner's
satisfaction with the work usually means subsequent work in the future.
Lien Rights
A contractor or subcontractor should never sign a contract that contains a
provision that waives any of the contractor's "lien rights" or the right to

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proceed on any general contractor's payment bond. If a contractor does

sign such a clause, then under the lien laws of many states, the lien rights
are gone. The same is true of any waiver of lien given in any partial
payment for labor and materials.
The basic policy behind the lien law is that the labor and material
furnished by general contractors, subcontractors, material suppliers, or
mechanics becomes affixed to the real estate, improves the value of the
land, and cannot be reclaimed by them. Payment is usually made after
the labor and materials have been incorporated into the real estate.
Therefore, the only manner in which protection can be afforded a general
contractor, subcontractor, or material supplier for payment is to give them
a meaningful security interest in the land to secure their payment for the
value of the labor and materials that they have previously furnished.
In some states, it is necessary to file a notice of intent to file a lien with the
courts a given number of days before the lien is actually filed. This
prevents the owner from selling the property between the time the job is
complete and the lien is filed. This notice is sometimes filed at the
beginning of the job to remind the owners that a lien will be filed if they do
not meet the payment provisions in the contract.
Most waivers of liens for final payment can simply be modified by adding
the contingent words, "upon receipt of $ _____.” followed by the waiver of
lien language in which the subcontractor waives their lien rights and
acknowledges receipt of all monies due him.
Bond Rights
Liens cannot be claimed against property owned by governmental entities.
To protect the subcontractor's right to payment, both federal and state
laws require the general contractor to secure a "payment bond" signed by
an authorized surety company. On more and more private jobs, the
owners are requiring the general contractors to furnish a payment bond.
The purpose of these bonds is to ensure payment for all labor and
material used in the performance of the contract. Collecting on a payment
bond may be simpler than collecting on a lien because the only sure way
to collect on a lien is when the property is sold.

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Subcontractors must follow necessary steps to protect themselves under

the provisions of the bonds:
1. At the initial construction site, the subcontractor should
determine if he or she is working on a bonded job.
2. When the job begins, the subcontractor should obtain a copy of
the bond from the owner.
3. If the subcontractor is not paid on time, he/she should do
exactly what is required by the terms of the bond and within the
time stated on the bond.

Warranties
Most construction contracts provide for some guarantee of the work, and
these contract provisions are valid and will be enforced by the courts. The
risks, which the contractor assumes, may vary greatly according to the
scope of the warranty clause. A contractor who is only installing
equipment furnished by the owner may guarantee only his workmanship,
while the contractor who agrees to construct the work to meet certain
performance standards may be responsible for defects in the design
provided by the contractor as well as defects in materials and
workmanship.
The contractor should carefully study the scope of any warranty clause
that they are asked to sign so they can price it accurately according to their
past experience and consider the time for which the warranty period will
run.

Insurance
Contractors must know the special risks of financial loss, which may be
covered by insurance, and they must be aware of the additional hazards
of construction, which require special endorsements to a general liability
insurance policy. There may be many areas of exclusion from the basic
comprehensive general liability insurance policy that any particular

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contractor may want to cover. These forms of supplemental insurance

include:
♦ contractual or hold harmless coverage;
♦ completed operations coverage;
♦ broad form property damage and installation floaters;
♦ explosion, collapse, and underground (XCU) coverage;
♦ workman's compensation coverage;
♦ builder's risk insurance.
Every comprehensive general liability insurance policy specifically lists
areas of exclusion. It is not unusual for a policy to list well over a dozen
such exclusions. Unfortunately for contractors, many of these exclusions
are in precisely those high-risk perils that contractors encounter frequently.
One of these exclusions, broad form property damage and installation
floaters, stops the insured from collecting on damage done to another
person's property while working on it or with it as well as excluding
coverage for damage to the insured's own property.
The term "builder's risk insurance" is often used to refer to all types of
normal coverage, both property and liability. This type of insurance
primarily protects against certain perils to property during construction of
the project. The contractor should make sure that it is known upon
whom the burden of carrying insurance rests. This is particularly true
with relation to theft of the owner's property that might result from the
property being unsecured during construction. The owner is probably
responsible; however, this can be changed by agreement.
The terms of the insurance contract govern the extent of coverage and
the period of coverage. A builder's risk form attached to a standard fire
insurance policy, for example, will describe the property being covered.
The limits of liability coverage on a contractor's comprehensive general
liability insurance policy should contain multimillion-dollar limits for each
occurrence. Obtaining umbrella excess liability coverage can pick up the
difference where stated limits leave off and also provide coverage in areas

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omitted by the general liability policy. Adequate insurance coverage with

adequate limits is expensive. But the expense of adequate insurance
should be passed on as a business expense to those for whom the
contractor works. In reviewing insurance coverage, a contractor should
consider not only the cost of the insurance but more importantly, the
scope of the coverage and the extent of services received from the
insurance company and agent.
Conflicts
There are different ways to resolve conflicts that develop between parties
of a contract. The first alternative, which is the cheapest, is to sit down
together and work out the problem among the parties concerned.
The next alternative is through arbitration. Arbitration leaves the terms of
the resolution to be defined by a third party, who is a disinterested,
unbiased professional, chosen by the parties in the conflict. Arbitration
may be carried out independently, or through organizations such as the
American Arbitration Association.
Small Claims Court may permit resolution of small conflicts without
lawyers and long waiting periods. If none of these methods to resolve
conflicts can be used, then the more costly and time consuming litigation
process must be accessed. Ambrose Bierce, in The Devil's Dictionary,
defines a litigant as "a person about to give up his skin for the hope of
retaining his bones."

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Discussion Questions
1. Why does a contractor need a building permit?

2. What precautions should be taken when ordering material or

equipment?

3. How can a contractor be sure the supplier's bid price is the price the
contractor will be charged?

4. What is a contract?

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Sample Questions
1. As defined by the IRC code, which of the following requires a building
permit?
a. fences not over 6 feet high
b. prefabricated swimming pools less than 24” deep
c. demolition of a detached garage (400 sq. ft.)
d. window awnings supported by an exterior wall, not projecting
more that 54” and not needing additional support.

2. The building code becomes effective when _____.

a. it is published by the code developer
b. more than 50% of the builders agree to use it
c. the federal government accept it
d. the governing body in your jurisdiction adopts the code

3. Remodeling an existing building may require numerous code

requirements to be met when ________.
a. the occupancy changes
b. the property is upgraded
c. fire regulations change
d. all of the above

4. There can be small openings in the ceiling for pipe, duct, and electric
boxes of ferrous material provided there is not more than 100 sq. in.
of opening for any ________ sq. ft. of ceiling.
a. 50
b. 100
c. 200
d. 250

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5. A ramp must be used for any change in elevation in a corridor if the

change is less than _______ inches vertically.
a. 6
b. 8
c. 10
d. 12

6. Folding, portable, or moving partitions are acceptable as long as

______.
a. they don't block required exits or establish exit corridors.
b. they are set in permanent tracks or guides.
c. the flame-spread classification is not less than that for the rest
of the room.
d. a and c only.

7. When required by the building official, a plot plan shall include _____.
a. location of all easements and property lines
b. drainage facilities and adjacent grades
c. proposed and existing buildings on the property
d. a and c only

8. Which of the following is not a habitable room as defined by the IRC

code?
a. dining room
b. pantry
c. bathroom
d. hallway
f. b, c, and d above

9. Exterior walls located less than 3 feet from property lines shall not
have less than a ___ hour fire-resistive rating.
a. 1
b. 2
c. 3
d. 4

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