If you are thinking of building your own home, you should consider hiring your own lawyer to avoid being subject to the builder’s demands. Many people do not realize that builder’s contracts contain clauses that give the builder an unfair advantage over the purchaser.
Many builders will offer to pay your legal fees if you use their lawyer and buyers are often attracted to this offer since it saves legal fees, but this can cause problems in the future.
The builder’s lawyer is hired to act on the builder’s behalf. The lawyer will assist you with with obtaining title of the land and a mortgage but they do not act for you. What happens if you have a legal dispute with the builder or are unsatisfied with their work? The builder’s lawyer has a duty to advocate on behalf of the builder and cannot provide you with legal advice. How will you know what legal rights you have and whether the builder’s interpretation of the contract is accurate? In order to protect your interests you should hire your own lawyer before signing a builder’s contract.
Many building contacts give the builder an unfair advantage by requiring that the mortgage proceeds will be irrevocably assigned to the builder when the bank releases the funds. Contracts also state that the builder’s lawyer can request the funds on your behalf and automatically advance them to the builder. This means that you will have no right to stop the payment of mortgage funds to the builder if you believe that the builder has performed deficient work.
To protect your interests and ensure that the builder performs to your satisfaction, you should speak with your own lawyer and review the building contract before signing. If you use your own lawyer to obtain title and a mortgage you will be in control of your money.