Terms of Construction Agreement
By agreeing to the outlined scope of work, this Construction Agreement is made by and between Fat Matt LLC (herein us, we or our) and you, the Property Owner(s)/legal representative (herein you, your and yours). You hereby hire us as your General Contractor of record to perform the work contained in the Final Scope of Work. You jointly and severally warrant(s) that you are the legal owner(s)/agents of the property noted above to be improved (the Property), and as such jointly and severally authorize us to furnish and install the labor and materials identified in the “Final Scope of Work,” (as defined in Section B of the Service Agreement or elsewhere in this Agreement), along with all applicable deductibles, depreciation (whether recoverable or not), co-insurance contribution required by your insurance carrier, upgrades, additional work requested by you, required code upgrades/OSHA compliance not covered by your insurance carrier, alterations or deviations from the insurance claim involving extra cost, including repair/replacement of any hidden damage discovered during the restoration process, all of which must be paid to us by you.
Texas law requires a person insured under a property insurance policy to pay any deductible applicable to a claim made under the policy. It is a violation of Texas law for a seller of goods or services who reasonably expects to be paid wholly or partly from the proceeds of a property insurance claim to knowingly allow the insured person to fail to pay, or assist the insured person ’s failure to pay, the applicable insurance deductible.
The AGREED PRICE to perform the Final Scope of Work shall be the amount listed in the Final Scope of Work or the maximum amount allocated for replacement cost as a claim settlement for your damage and loss, whether obtained through your claims adjuster, or obtained through the appraisal process or an attorney; whichever amount is GREATER. We will receive all insurance proceeds, including any and all supplemental payments from your insurance company, for the work completed by us, along with your deductible and payment for any additional work required or requested to be performed at the Property. You agree that if your insurance carrier refuses to authorize a reasonable scope of damages and method of repair sufficient to return the property to its pre-damage condition, we reserve the right to terminate this Agreement, and you agree that we will have no further obligations to you.
WARNING: IT IS UNLAWFUL FOR AN INSURED TO PROFIT FROM AN INSURANCE CLAIM.
DIRECT PAYMENT AUTHORIZATION: By signing, you appoint us as your ATTORNEY-IN-FACT for the sole purpose of communicating directly with your insurance and/or Mortgage Company regarding identification of any pertinent property damage, and the status of payment for our Work. You further agree to aid in collection of all monies due us by executing any necessary paperwork and/or communicating with insurance and/or mortgage company, and hereby authorize and unequivocally instruct direct payment of any benefits or insurance proceeds to us.
ACCEPTANCE OF AGREEMENT: By signing the Agreement below, you agree that you have received, read, understand and accept the terms contained in the Additional Terms and Conditions on the reverse of this Agreement, as well as the documents titled “Awareness Letter” and our “Warranty Certificate” and agree that they are made a part of this Agreement by reference. IN WITNESS WHEREOF AND INTENDING TO BE LEGALLY BOUND, the parties have executed the Agreement as of the date written below. This Proposal/Agreement may be withdrawn by Contractor within 7 days or in the event Owner’s insurance company declines coverage for Owner’s damage made the subject of this Agreement.
Unless the terms of this Agreement are signed following your execution of our Service Agreement, YOU, THE BUYER, MAY CANCEL THIS TRANSACTION AT ANY TIME PRIOR TO MIDNIGHT OF THE THIRD BUSINESS DAY AFTER THE DATE OF THIS TRANSACTION. SEE THE PROVIDED NOTICE OF CANCELLATION FORM FOR AN EXPLANATION OF THIS RIGHT. After the right to cancel has passed, any attempt to terminate this Agreement shall be deemed a material breach of this Agreement and entitle Contractor to damages.
You acknowledge that We are not Public Insurance Adjusters and are not providing or offering to provide any Public Insurance Adjusting Services in connection with this Agreement.
A. FINAL SCOPE OF WORK AND AGREEMENT PRICE: We will perform the Final Scope of Work (the Work) for the Agreement Price. The Agreement Price does not include any bond or builder’s risk insurance coverage, which may be provided for an additional fee upon request. We reserve the right to perform any changed/additional work with your verbal instruction, but shall not be required to perform such work without a signed Change Order.
B. TERMS OF PAYMENT: At least 24 hours prior to commencement of the Work, payment of 50% of the Agreement Price will be required as a down payment. Payment per Trade Policy: We reserve the right to invoice you once any particular trade is fully completed and to collect said payment in full before beginning any succeeding trade. Any balance remaining shall be due and owing upon substantial completion of the Work. You acknowledge that payment in full for the Work is a pre-condition to our obligation to honor our Labor Warranty or to provide the Material Warranty. Acceptance of late or partial payments (regardless of any purported limitations such as ‘Paid in Full’, ‘Accord and Satisfaction’, or similar, will not waive, limit, or prejudice our right to collect any amounts due. You agree that if any amounts due for completed work are not paid when due, you shall be liable to pay all costs of collection, including reasonable attorney’s fees and collection costs, which, together with all sums due hereunder, shall bear interest at the maximum rate allowable by law until paid in full, and you agree that we shall be entitled to a lien against the property and any insurance proceeds as security to ensure payment for our Work.
C. OUR RESPONSIBILITY: We agree to perform our Work in a professional, efficient, good and workmanlike manner, according to standard construction practices and all applicable building code/OSHA requirements. We will supervise and direct all work using our best skill and attention and be solely responsible for all construction means, methods, techniques, sequences and procedures, and for contracting and performing all portions of the Work under this Agreement. You agree that we are not responsible for the safety and health of any persons present at the job site who are not our employees, subcontractors or agents or for the failure of any materials or equipment not within our direct control. A fully executed change order must be completed before changing or omitting any work from the Final Scope of Work, which are subject to an administrative fee of $100 per change order. All material we provide is guaranteed to be as specified. In the event that material has to be restocked or reordered because of a cancellation or interference by you or at your direction, in addition to any other fees or costs associated therewith, there will be a materials restocking fee equal to 15% of the Agreement Price Acceptance of this Agreement by you shall constitute acceptance of the terms, conditions and limitations of said warranty. You agree that our maximum liability, in the event of any default by us, shall not exceed the sum identified for the original Final Scope of Work.
D. YOUR RESPONSIBILITY: You certify that your property insurance policy is and will remain valid and in force until completion of the Work. Certificates of such insurance shall be provided to us if requested. You authorize us access to enter your property, furnish materials, and supply all equipment and labor necessary to perform all work identified in the Final Scope of Work. Should you become aware of any damage to your property you believe was caused by us, our subcontractors, agents or employees during the course of the Work, you must notify us of said damage prior to the time of final payment for the work in question. If you fail to so notify us, you waive all rights against us concerning said damage. You acknowledge that we are not responsible for damage to landscaping, driveway or sidewalks as a result of normal construction activities. You further acknowledge that re-roofing an existing building may cause dust or debris to fall into the interior, and may cause objects to fall from the interior ceilings and walls. You therefore agree to remove or protect interior and exterior property directly below the roof in order to minimize potential property damage, and that you are solely responsible for any disturbance, damage, clean up, or loss to property resulting from your failure to do so prior to commencement of construction. You acknowledge that any loss of productivity experienced by us due to interference by you or at your direction may result in an additional charge. You understand that by code, nails must penetrate the roof deck at least 1/4” and warrant that all electrical wiring, HVAC, plumbing and/or gas lines have been installed according to all applicable building codes and agree that we are not liable for any punctures through lines closer than 3” from the underside of your roof deck. Furthermore, you understand that nail pops on textured ceilings cannot reasonably be avoided during the installation of a roof and agree not to hold us liable for any nail pops or drywall cracking or movement incidental to the construction process. It is your responsibility to address any concern about ponding areas on the roof before work commences, and agree that any repairs necessary to correct ponding, not the result of our work, will be charged to you as an extra. You agree that your homeowner’s insurance shall be liable for any interior damage that occurs as a result of our work provided we have taken reasonable care to protect the roof and interior during our Work.
E. WORK SCHEDULE: You authorize us to perform the Final Scope of Work as defined in this Construction Agreement. We shall commence construction AS SOON AS FEASIBLE after the execution of this Construction Agreement and shall diligently pursue completion of the Work. However, we are not responsible for delays beyond our control such as floods, tornadoes, earthquakes, lightning, natural disasters or any other inclement or unfavorable weather; national emergencies, strikes, lockouts, fires, freight embargoes or labor disputes; inability to obtain labor, services or any materials subject to supply shortages; acts or failures to act by you, your agents or tenants which delays the Work; changes in the plans or specifications; acts of war, riots, civil commotion; fires; epidemics, quarantine restrictions; delays caused by any state, government, public authority or public enemy, or any other delays beyond our control. We routinely order more materials than necessary; therefore, all leftover building materials remain our property.
F. DELAYS AND/OR CANCELLATION: ONCE YOUR RIGHT TO CANCEL, IF ANY, HAS PASSED, THIS AGREEMENT CANNOT BE CANCELED EXCEPT BY MUTUAL WRITTEN AGREEMENT OF ALL PARTIES. In the event that you elect to delay scheduling the Work or cancel this Agreement after your right to do so has passed, whether or not work has commenced, you expressly acknowledge and agree that we will suffer serious financial harm which cannot be ascertained at this time. As such, you agree that 25% of the Agreement Price would be reasonable compensation as liquidated damages, but not as a penalty, for termination of this Agreement, all of which shall be credited toward the Agreement Price in the event you elect to have us perform the Final Scope of Work.
G. DISPUTE RESOLUTION: You agree that any claim or controversy, arising out of or relating to this Agreement or any alleged breach thereof, shall be determined by binding arbitration in the County in which the property is located. Absent other agreement by the parties, the arbitration shall be administered under the Rules of the American Arbitration Association. Any award of the Arbitrator is final and binding and may be entered as a final judgment in any court having jurisdiction thereof. You expressly waive the right to trial by jury of any claims arising from this Agreement. In the event it is necessary for us to initiate any collection or legal proceedings to enforce our rights under this Agreement, you agree to pay all legal fees and costs of any nature whatsoever associated therewith incurred by us.
H. ASBESTOS AND HAZARDOUS MATERIALS: You agree that we are not responsible for expenses, claims, or damages arising out of the presence, disturbance, or removal of mold containing, asbestos- containing, or any other hazardous materials. If such materials are encountered, we reserve the right to suspend work while you engage a firm specializing in the removal and disposal of such hazardous materials, at your sole expense, or to submit a change order and perform the necessary work for additional compensation. We will be entitled to compensation for any additional expenses incurred as a result of encountering mold-containing, asbestos-containing, or any other hazardous materials. You acknowledge that mold is a latent but foreseeable condition when specified maintenance procedures to prevent moisture intrusion are not followed. Moisture that has entered into the building prior to our work may result in mold growth. YOU AGREE TO INDEMNIFY, HOLD HARMLESS, AND DEFEND US FROM AND AGAINST ANY AND ALL LIABILITY, DAMAGES, LOSSES, CLAIMS, DEMANDS, FINES, FEES, PENALTIES OR CITATIONS OF ANY KIND, INCLUDING BODILY INJURY OR PROPERTY DAMAGE, NOW OR IN THE FUTURE: INCLUDING, BUT NOT LIMITED TO, THE PRESENCE OF MOLD, ASBESTOS, OR ANY OTHER HAZARDOUS MATERIALS, NOW OR IN THE FUTURE. YOU WILL HOLD HARMLESS AND INDEMNIFY US FROM CLAIMS DUE TO POOR INDOOR AIR QUALITY WHETHER OR NOT RESULTING FROM A FAILURE BY YOU TO MAINTAIN THE INTERIOR OR EXTERIOR OF THE BUILDING IN A MANNER TO AVOID GROWTH OF MOLD OR THE LIKE. We disclaim any and all responsibility for damage to persons or property arising from or relating to the presence of mold in the building.
I. INDEMNIFICATION: YOU DO HEREBY IRREVOCABLY COVENANT, PROMISE AND AGREE TO RELEASE, INDEMNIFY, AND HOLD US, OUR OWNERS, EMPLOYEES, SUBCONTRACTORS, AFFILIATED ENTITIES, AND AGENTS, HARMLESS AND DEFEND US FROM AND AGAINST ALL LOSSES, CLAIMS, CAUSES OF ACTION, DAMAGES, SUITS, EXPENSES, LIABILITIES (INCLUDING ATTORNEY’S FEES AND COSTS) OF ANY KIND OR NATURE THAT WE MAY SUSTAIN, INCLUDING ANY HARM OR LOSS ARISING FROM CLAIMS OF PROPERTY DAMAGE OR PERSONAL INJURY, WHETHER INCURRED BY YOU OR OTHERS, RELATED TO OR ARISING OUT OF THIS AGREEMENT. YOUR INDEMNIFICATION OBLIGATIONS EXTEND TO ALL RESPONSIBILITIES AND UNDERTAKING SET FORTH IN THIS AGREEMENT AND IN THE WARRANTY.
J. MISCELLANEOUS: We shall not be obligated to continue work hereunder in the event you breach any term or condition of this Agreement. This Agreement and all applicable warranties cannot be assigned except with our written permission. In case any one or more of the provisions in this Agreement are determined to be invalid, illegal, or unenforceable in any respect, such provision shall be modified to the minimum extent necessary to make it a valid and enforceable provision. To the extent it cannot be so modified, the Agreement shall be construed as if such provision(s) had never been contained herein. Our failure to enforce any right under any Agreement with you shall not be construed as a waiver of any other right to enforce the same or any other right, term or condition. This Agreement supersedes all previous agreements, arrangements, and understandings, whether verbal or written, between us. There are no representations, oral or written, other than those set forth herein. This Agreement may not be amended, modified, or otherwise changed except as mutually agreed in writing, executed by the parties and shall be binding on and inure to the benefit of the parties and their respective heirs, executors, administrators, legal representatives, successors, and assigns. The headings and captions contained in this Agreement are for convenience only and shall not be considered in the construction or interpretation of any of the terms, items, conditions or provisions hereof. IMPORTANT NOTICE: You and your contractor are responsible for meeting the terms and conditions of this contract. If you sign this contract and you fail to meet the terms and conditions of this contract, you may lose your legal ownership rights in your home. KNOW YOUR RIGHTS AND DUTIES UNDER THE LAW.
COMMUNICATION: You authorize us to communicate directly with your insurance and/or mortgage company regarding recommended supplements to the project scope/pricing and status of payment for our Work and agree to aid in collection of all monies due us by executing any necessary paperwork and/or communicating with insurance and/or mortgage company. You agree that any funds disbursed by your insurance or mortgage company(ies) shall include us as a payee, and that we may present a signed copy of this Agreement, which shall be sufficient authority and direction to your insurance/mortgage company to include us as a payee in any payments made in settlement of your claim, all of which shall be designated first to the maximum scope of work identified. Should amounts paid by insurance not be sufficient to pay the agreed price herein, you agree to pay the difference to us immediately upon demand.
BACKCHARGES: No back charge or claim against us shall be valid except by written agreement. If you believe we have failed to properly perform its work, you shall notify us of such alleged default in a detailed writing and allow us a reasonable time of at least five full working days, to commence appropriate corrective measures (or demonstrate the absence of default) before incurring any cost chargeable to us.
WARRANTIES: Should leaks occur after completion of our work, inspections, or repairs performed by us shall be treated as warranty matters, and shall not be grounds for withholding payment of the Agreement Price; provided, however, if our work is installed over an existing system, we shall have no responsibility for water penetration or mold growth that occurs as a result of moisture contained in the old, or former, roofing system. THE WARRANTIES EXPRESSLY STATED OR REFERRED TO HEREIN ARE EXCLUSIVE AND IN LIEU OF ALL OTHER WARRANTIES, EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION, ANY WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE, AND ALL OTHER WARRANTIES ARE HEREBY DISCLAIMED AND EXCLUDED. We make no warranty respecting “Wind Uplift Resistance'' of the installed roof system. Our Labor Warranty does not cover damage by lightning, winds over 50mph, hurricanes, tornadoes, hailstorms, impact of foreign objects, damage due to settlement of foundation, or your failure to properly maintain the property. Said Warranty cannot be assigned, is not transferable, and is void if any other contractor alters our Work.
This Agreement is subject to Chapter 27 of the Texas Property Code. The provisions of that chapter may affect your right to recover damages arising from a construction defect. If you have a complaint concerning a construction defect and that defect has not been corrected as may be required by law or by Agreement, you must provide the notice required by Chapter 27 of the Texas Property Code to the Contractor by certified mail, return receipt requested, not later than the 60th day before the date you file suit to recover damages in a court of law or initiate arbitration. The notice must refer to Chapter 27 of the Texas Property Code and must describe the construction defect. If requested by the Contractor, you must provide the Contractor an opportunity to inspect and cure the defect as provided by Section 27.004 of the Texas Property Code.
NOTICE OF CANCELLATION
You may cancel this transaction, without any penalty or obligation, within three business days from the date of the signed acknowledgement.
If you cancel, any payments made by you under the contract or sale, and any negotiable instrument executed by you will be returned within 10 business days following receipt by the merchant of your cancellation notice, and any security interest arising out of the transaction will be canceled.
If you cancel, you must make available to the merchant at your residence, in substantially as good condition as when received, any goods delivered to you under this contract or sale; or you may if you wish, comply with the instructions of the merchant regarding the return shipment of the goods at the merchant's expense and risk. If you do not agree to return the goods to the merchant or if the merchant does not pick them up within 20 days of the date of your notice of cancellation, you may retain or dispose of the goods without any further obligation. To cancel this transaction, mail or deliver a signed and dated copy of this cancellation notice or any other written notice, or send a telegram, to Fat Matt Roofing, at 1110 Energy Dr Ste. 3, Abilene TX 79602 not later than midnight of the third business day from the signed date of the scope of work.
HOMEOWNER
AWARENESS LETTER
Thank you for trusting us to re-roof and repair/restore your property from the damage it has sustained. Our experienced team will efficiently manage all aspects of your job in order so that all repairs are completed as promptly, skillfully and hassle-free as possible. Our caring crews are professionals and will work hard to ensure a safe and damage-free installation. Our goal is to meet or exceed your expectations by clearly communicating with you and by performing excellent work.
Through experience, we understand that occasionally misunderstandings and disputes arise during a construction or remodeling project such as yours. We believe that the vast majority of the time, these misunderstandings occur due to the failure of the construction company to adequately communicate accurate expectations of the project to the project owner. This is the reason that we have created this awareness letter - to make you, the owner, as aware as possible of the many possibilities for a job such as this.
We wish to make your experience during your re-roofing and repair/restoration experience as pleasant as possible, as this may very well be your first experience repairing your property due to storm damage. Many owners don’t realize that re-roofing a property is a major construction project. There really is no way to re-roof/restore/repair your home without creating some bother and disruption to your normal routine. So, you should anticipate some inconveniences while your property is a temporary construction site. Therefore, we would like to make you aware of certain job-related situations that will likely require your attention and cooperation. The following are offered to avoid misunderstandings and anxiety once we begin your job.
Our Goal
Your satisfaction is our number two priority behind your family’s safety of course. We want your project to be as seamless and hassle-free as possible.
Claim & Project Process
1. The process begins with a completed and signed Service Agreement between our company and you, and you forwarding us a copy of your most recent claim settlement offer from your insurance company (their most recent claim estimate);
2. We highly recommend that you give your insurance carrier written notice of your loss. 99% of all policies require this, and their receipt of written notice may be required to trigger time limits that may apply to your claim We can provide you with a sample written notice of loss that you can use to create your own written notice of loss.
3. One of our Field Representatives will come out and perform a thorough damage assessment, determine specifically what building materials have been damaged, determine the extent of your damage(s), determine a reasonable method of repair, and create an estimate detailing the scope of damages to your property.
4. We will then perform a comparative analysis between our estimate and your insurance carrier’s estimate to determine if there was anything overlooked or incorrectly measured. If there was, we will forward a copy of the comparative analysis to your claims adjuster and schedule a re-inspection (when necessary) so we can answer any questions your adjuster may have regarding our scope of work to help ensure that all of your legitimate damages are accounted for and your carrier authorizes a reasonable method of repair. This process typically takes 1-2 weeks to complete, depending on everyone’s schedules and your carrier’s availability. Realize the time necessary to complete this step (in your particular case) is subject to the amount of time your claims adjuster takes to reconcile any differences with us and their reasonable cooperation. Property owners may expedite this process by maintaining communications with their claims adjuster and requesting that they promptly and reasonably authorize all required repairs.
5. Issues that may arise in this process can include overlooking legitimate damage, refusing to authorize a reasonable method of repair, omitting a significant portion of building materials from the project, refusing to replace a whole roof system (when sufficient damage is present to warrant full replacement) or refusing to pay the reasonable and customary general contractor’s fee for overseeing your project. If you are unfortunate enough to get one of these carriers/adjusters, we can refer you to an attorney for guidance.
6. In an effort to facilitate a smooth process for our customers, we use the same estimating software (Xactimate) to create our estimates that 95% of insurance carriers use. Since we have already limited ourselves to insurance company pricing by using the insurance estimating software, there should not be any pricing difference between them and us. The rare exception is when an insurance carrier accesses the price database in the software and manipulates it. In an effort to facilitate a smooth process for consumers, we have already limited ourselves to insurance company pricing by using the insurance estimating software, Xactimate. Everyone knows that insurance companies do not overpay. We will not agree to lower our pricing to a manipulated pricing scheme by these few carriers.
7. We go to great lengths to assure that all of your damages are accounted for and included in our and the carrier’s estimates. We also assure that the appropriate method of repair is being applied to your damage. Rarely is there a pricing difference between us and reasonable insurance carriers. The vast majority of the time, it is an issue of authorizing a proper method of repair for the damage your property has suffered and including all necessary building components per best practices of construction contractors, building code and OSHA requirements.
8. If there are any other price differences (beyond price manipulation of the software), it will be either due to: a. your insurance carrier mis-measuring the extent of your damage,
b. your carrier refusing to agree to the replacement of your entire roof system, when the extent of damage warrants it (professional contractors do not piecemeal roofs),
c. your carrier is omitting legitimate building components or refusing to authorize the work or materials necessary to properly repair them,
d. your carrier refusing to compensate you for legitimate and required building code upgrades (that assure that your building is safe and compliant) and/or OSHA safety requirements applicable to the work and that help protect you from liability and accidents).
e. your carrier is omitting legitimate, standard and customary general contractor’s overhead and profit,
f. or some combination of these issues.
Realize, these are not pricing issues. These are line item issues. The carrier is omitting legitimate line items; we are not refusing to price our work competitively. Again, we are already limiting ourselves to insurance company pricing by using their software. The carrier needs to be reasonable and include all legitimate line items in their estimates. Consumers that force their adjuster to explain WHY they have omitted legitimate and reasonable line items from their estimates quickly realize that we are correct when an adjuster is unable to explain WHY these line items have been omitted. They will be unable to explain how they arrived at the conclusion that these line items are either not illegitimate or unreasonable. If they are able to validate that any given line item is in fact not legitimate or unreasonable, we will be happy to adjust or remove this line item, whichever is correct and appropriate.
9. Once your insurance carrier has agreed to include a legitimate method of repair for ALL of your damages, we can schedule the work to begin. If there remains any dispute over damages, we can perform the work on the undisputed items if you have some need for us to do so, while the issues in dispute are being resolved. Our Representative will schedule an appointment for you to select building materials and colors, complete a Work Order and obtain a down payment.
10. We will then schedule the repair work. You agree that we will commence construction as soon as feasible after the conclusion of steps 1-8 above. The threat of inclement weather can obviously delay the start of your project we take care to avoid tearing off a roof if weather is imminent. We will complete all aspects of your restoration project within a reasonable timeframe subject to the conditions outlined in the Work Schedule heading of our Agreement with you. Once the Work Order has been completed and the work scheduled, any changes must be made in writing on one of our Change Order forms. A $100.00 administrative fee per change order will accompany each change order.
11. Upon job completion, we will perform a final walkthrough confirming that the work is substantially completed subject to our Work Order with you and will schedule one of our crew members to pick up any excess material from the job site. If there is an open bundle of shingles left over after the installation of your roof, we will be happy to leave this with you if you’d like, in case you may need a few shingles in the future.
12. Once substantial completion of the work has been accomplished, we will present you and your claims adjuster with a final invoice for our work. Any additional work or upgrades, over and above the scope of work authorized by your insurance carrier, will be separated out and will require an additional payment from you as per your Agreement with us. We will forward the final invoice for the agreed scope of work to your claims adjuster for final payment.
13. Once you receive the final check from your insurance company, contact us right away so that we can pick up the final endorsed insurance check, along with any other monies due under our Agreement with you. Once the work has been completed and we have received final payment in full, we will issue your warranty certificate.
Insurance and Mortgage Companies
In general, most checks have an expiration date, and will have to be returned and re-issued if you hold on to it too long. Since your Insurance Company is paying to replace your roof and repair other collateral damages through an insurance claim, please notify your insurance Agent the day we begin your roof. This will help assure prompt inspection and payment since they are likely holding back depreciation from your claim. If your insurance claim exceeds $5,000, your claim check may include your mortgage company as an additional payee. Double check to assure that your insurance carrier has put the correct mortgage company on your check. If they have included your current mortgage company as an additional payee on your check, simply have a mortgage company representative at your local branch endorse the check so that there will be no unnecessary delay in starting your work. You may have to show them an executed copy of your contract with us for them to agree to endorse your check. If your mortgage company refuses to endorse and return your insurance proceeds check, you can consider not giving your mortgage company the check - they may decide to use the proceeds for any number of things unrelated to your roof repair. While relatively rare, this has actually happened a number of times with our clients over the years. If your mortgage company does endorse the check and return it to you, never endorse your own name until you are in line at the bank to make the deposit. If you were to lose the check after endorsing it, it’s possible that anyone finding the check could cash it. We can assist you in handling the endorsing of your checks should you prefer to avoid the hassle.
Claim Checking Accounts
Consider opening a separate checking account at your bank for your claim proceeds. Others have done this to prevent accidental co-mingling of funds that might cause them to come up short when the final payment was due. We were impressed with this idea and have suggested it to all of our clients ever since.
Keeping separate accounts for your insurance claim related expenditures makes it much easier to keep good records. Deposit all insurance checks into this account and write claim-related checks from this account as well. ONLY use this account for the expenses of the claim. When the claim is completed, you simply close the account and destroy any remaining checks.
Signs
Conspicuously placing our company sign on your property is the first step to re-roofing and repairing your property. We are proud of the work we do and like to showcase it. Positioning a sign in your yard is the most effective means of advertising that we have ever found. We appreciate you allowing us to place our sign in your yard. Please leave it in your yard for at least 90 days. Please call us the day that you take it down so that we may come by and retrieve the sign.
Access to Your Property
It is not necessary for someone to be home during the installation of your roof or repairing other agreed-upon exterior damage; however, we will require access to the entire perimeter of your property while work is in progress. This includes access to your driveway to place construction materials, i.e., pallets of shingles. Additionally, we will need access to the rest of your driveway to stage our debris removal truck/dumpster to prepare to haul off old shingles and debris. Please relocate all vehicles, boats, motorcycles, trailers, basketball hoops, toys, and other items that may restrict access away from the driveway the night before we start work, and to park on the street the night before work begins so that your auto isn’t trapped inside the garage by our dumpster or dump trailer.
As previously stated, we will need access to the entire perimeter of your property (including back yard) and possibly adjoining yards to clean up after ourselves - gates must be unlocked. For the protection of your lawn and a safer, cleaner work area, we request that you not run any lawn sprinklers the day before the job starts and until we are finished.
The employees will drive to your property to perform their work, and therefore will need to park close to the project site for access to tools and other supplies. Additionally, our crews may eat their lunch (and take reasonable breaks) on site. If so, they will likely utilize whatever shade is available during warm days. Your job superintendent will obviously speak English, but some crew members may converse in Spanish among themselves during the work process.
Delivery of Materials
We will need a convenient area (typically on one side or another of your driveway near the house) large enough to drop off the roofing and other building materials so that the construction crews can readily access them. When the materials are delivered to your property, please check the color of the shingles and notify us immediately if the color is different than what you specified. If the color of any materials delivered to your property is different than what you had expected and we are not notified prior to installation, you hereby agree to accept such color difference and to hold us harmless for any such discrepancy. Normally, we order more materials than we need to prevent any installation delays. In these events, any surplus material remaining on the jobsite remains our property once the construction is concluded.
We cannot be held responsible for driveways that crack during the delivery of materials to your job site or for marks forklifts delivering materials may leave rubber tire tracks on your driveway. These marks will fade over time and we cannot be held responsible for these.
Children and Pets
Our foremost concern is your family’s safety. Please realize that construction jobsites have inherent dangers present. Roofing especially involves demolition and installation that can occasionally result in falling debris. You expressly agree that no one, especially children, will enter into, or under, the work area while the project is ongoing. We cannot and shall not be held responsible if you, any family member or invitee, disregards this warning and is injured. Your backyard gate will likely need to be opened and closed numerous times throughout the project; therefore we highly recommend that dogs or other pets be placed indoors or even better, boarded in a kennel during the project. In fact, boarding your pet reduces the stress on them with strangers banging, sawing, etc... in ‘their territory’. Boarding your pets also eliminates the possibility of someone accidentally allowing pets out of the fenced in area. We cannot and do not accept any responsibility if your pet accidentally gets out of any fenced in area once your project begins.
The Interior of Your Property
Replacing your roof is a dirty job. Dust and debris may very well enter into the interior of your home, especially the attic space, during demolition and installation - this is unavoidable. When we do a complete tear-off of a roof (including old cedar shingles or rotten decking - if present), debris will fall through into the attic space. Use care when lowering your attic stairs following the roof installation to avoid any overlooked debris that could fall into the living space. We recommend that you either remove or cover all contents in your attic that you may want to protect, especially valuables.
About a ton of weight is taken off your home’s frame when your old shingles are removed. Rafters occasionally move slightly when this occurs. Small stress cracks and even some nail pops in your ceilings texture, drywall bedding and/or paint may happen. It is impossible for us to prevent these and we cannot be liable for them. It is possible that your insurance carrier will cover these and ensuing losses under the principal of indemnification. We will be happy to assist you in preparing an estimate for a supplemental claim to repair this damage.
In the event that you have house wiring (electrical, telephone lines, security alarm lines,) draped across the rafters, this is a violation of building codes and a definite fire hazard. Building codes dictate that roofing nails on residential property penetrate through the roof decking a minimum of 1/4”. Building codes and best practices also require that all air conditioning, gas and plumbing lines as well as electrical wiring be located a safe distance below all roof decking. Incorrectly installed mechanical lines are at risk of being punctured by nails. If this is an issue at your property, you will need to hire us or another contractor to correct these problems prior to installation of your new roof. This additional work is not included in the original contract and will require additional funds to correct, whether using another contractor or us. You agree that we cannot be held responsible for ANY punctures to any of these improperly installed lines, pipes or wiring within three inches of the bottom of the roof deck.
Occasionally, water heater and furnace exhaust pipes, stovepipes and sewer pipes will be incorrectly installed as well. Infrequently, while your new roof is being installed, pipe joints can become separated (without the knowledge of the crew or company) and need to be reattached properly. We will need access to your attic to check the pipe fittings upon completion of your job to assure that they are secure.
Noise, Vibration, and Dust
Again, noise is an inherent part of re-roofing. Prepare yourself and your family for the sound of continual hammering and pneumatic nail guns during the project. It may be a little nerve-racking if you’re not expecting the noise. You may wish to plan for a day or two away from the property while the project is under way - this is not uncommon. Additionally, our crews may start work very early and continue until dark in order to minimize the risk of leaving your roof open to the elements - depending on HOA and city ordinances. Since crew members will be walking around on your roof, you will also FEEL the vibration that occurs when they are removing old shingles, nailing, sawing, hauling and stacking roofing materials. We highly recommend that you remove all loose, delicate, or fragile items from your walls, shelves and ceilings that are not FIRMLY attached. Paintings, pictures, mirrors, clocks, fine china, light fixtures, keepsakes, figurines, and other items should be secured, because these inevitable vibrations may shake these items off the shelves, walls, or ceilings. If you are in doubt, take it down! We cannot be liable for damage to any of these items if you elect not to secure them.
Vibration may also cause airborne dust to fall from the attic area through your air vents, light fixtures or other openings in your ceiling. This obviously is beyond our control and cannot be avoided. If you or any family member has dust allergies, are asthmatic or have reactive airway disease, make arrangements for alternate lodging during the installation process. NOTE: If we are replacing the roof decking on your property, expect even more noise, vibration, and dust.
Circuit Breakers
We typically utilize power tools during the project. If we do, we will need access to an electrical outlet at the beginning of the first day of the project and throughout the construction process. If you do not have an exterior electrical outlet available to us, we will need to run one of OUR heavy-duty extension cords to an interior outlet. Once we have completed your roof, double check your circuit breaker box to assure that no breakers have been tripped and that they are all operating correctly. We will also need access to your breaker panel during the workday in the event that a beaker is tripped and needs to be reset, in order to continue using our equipment.
Antennas, Skylights, Solar Panels, and Satellite Dishes
We will remove and reinstall any television antennas or satellite dish, up to twenty feet in height, at no extra cost if you make your request before we start your project. However, we cannot be held responsible for poor reception or any damage occurring to the antenna if you request us to remove and reinstall it. A satellite specialist will need to come out and fine tune your satellite dish to maximize your signal. Examine your claim estimate to make sure the carrier included this additional fee as these items are not included in your contract price.
In regard to skylights, if they are transparent (clear like a window), take appropriate measures to protect your privacy while anyone may be on your roof. Additionally, many times we will be required to remove the skylight frame and Plexiglas to properly seal around skylights. Occasionally, incorrectly installed bedding and paint stuck to the skylight may crack. Drywall dust, bedding and paint chips may fall through the opening into your living space. Take care to properly protect any household contents below skylights. We cannot be held liable for any damage to your property as a result of this work which was caused by events beyond our control and not included in our contract scope or price.
We cannot roof around solar panels or any other structures installed or resting on your roof due to access issues. These structures will have to be detached and reset to properly roof under their location. Removal and re-installation of any solar panels or other structures are strictly the responsibility of the owner and are not part of the typical roofing contract, unless included in your insurance claim. We will handle these issues for an additional fee if your insurance carrier refuses to pay for the additional labor.
Outdoor Furniture, Potted Plants, Etc.
Please remove any objects or articles from around the perimeter of your property before the project begins. This includes outdoor furniture, barbecue grills, potted plants, clay pots, gardening equipment, bicycles, toys, etc. We will cover your swimming pool with a tarp if you have one near the roofing area. We understand that your landscaping is important to you. Occasionally, roofing debris (and rarely, even a bundle of shingles) may fall off your roof while the project is underway. No matter how careful our crews are, blooms and leaves may occasionally be knocked off plants, flowers and shrubs adjacent to the work area. Unfortunately, a few nails and small pieces of felt or shingles may occasionally fall, hidden in your shrubs or grass. We do make every attempt to remove all the debris, especially nails, that we can find. This includes running a magnetic nail bar over your lawn upon completion of your job to pick up fallen nails. This situation may be exacerbated if your grass is cut long. Please use caution the first time you mow your grass after we complete your roof since a few nails may be missed, despite our efforts to get them all.
As long as we are addressing plants, trees can cause premature wear and tear on a roof if allowed to overgrow and scrape against your new roofing shingles when moderate wind blows. We will trim small limbs that limit our access to perform an effective, workmanlike job. If you are particular about the shape of your tree, or the limbs are medium to large in size, you may want to contract with a landscaper or tree surgeon or trim back any limbs yourself that may limit our access to the roof before the project begins. You agree that we shall not be held responsible for damage to any trees, shrubs and/or plants from normal construction activities.
Guttering
If your building has gutters and that are not being replaced, read this paragraph: We take special care to protect your property and gutters from damage during your project. However, despite attempts to prevent it, occasionally some (minor) scrapes or dents may still occur to your gutters when our crews place their ladders against the edge of your roof to access it for roof replacement. Leaf screens may come loose when we remove the old shingles. If you have concerns about your gutters or leaf screens, please address these concerns before we start the project. Steep roofs with gutters on all sides exacerbate the likelihood for small to medium sized scratches and dents.
Rafters and Decking
Shingles will conform to the shape of the decking that they are being installed on top of and will show any imperfections that may be there. This is especially true for inexpensive three-tab shingle roofs. Tearing off more than a single layer of old shingles could exacerbate this situation. If your roof decking has any of the following pre-existing conditions, new shingles will ABSOLUTELY NOT mask warped, sagging or buckled decking due to incorrect installation or age or rafters that are fatigued or inadequately braced. Moreover, other hidden, pre-existing structural issues may not become apparent until the job is under way. This is especially true of roof decking. Your insurance carrier may or may not elect to pay for the replacement of rotten decking in the event your existing decking does not provide a stable, nailable surface. Regardless, any such issues are not a part of this contract unless specified in writing before the work commences. Any upgrades, betterment, additional items, alterations or deviations from the insurance claim involving extra cost, including but not limited to repair/replacement of any hidden damage or any rotten wood discovered during the restoration process, over and above those specified in the Final Scope of Work, will be executed only upon written orders and will become an extra charge over and above the Contract Price.
We are not obliged to make repairs to these pre-existing issues unless a written change order is executed and a price for this additional work is agreed upon. We will provide documentation for you to give your insurance carrier in the event that any roof decking fails to provide a stable, nailable surface. We cannot guarantee that your carrier will reimburse you for the cost to replace rotten or unstable decking, but will provide you with photograph of the decking which, along with our invoice, can be submitted to your insurance adjuster for reimbursement. If you have any concerns about any of these possible pre-existing conditions, please address this with our Representative prior to beginning your project. These matters are not included in your roof contract and additional expenses will obviously be incurred to correct these conditions.
Inclement Weather
To minimize risking your property to the elements, we attempt to schedule all re-roofing work around the weather. We watch the local weather reports closely, and we make every attempt to not tear off more roofing than we can replace on the same day. In the event that it rains or there is a legitimate threat of rain, your roof will obviously be delayed. Your understanding and patience is appreciated. If an unexpected thunderhead happens to roll in, we will make every attempt to tarp your roof as quickly as possible to prevent any leaking. However rarely this occurs, you agree that we cannot be held responsible for reasonably unforeseen weather anomalies that cause any damage due to an open roof.
Settling Your Claim
Few homeowners understand the claim settlement process. A quick explanation of the process should help answer any questions or concerns that you may have.
Generally speaking, insurance carriers are obligated to indemnify their Insureds in the event of covered losses. Indemnification is a legal term that the insurance industry uses. Essentially, indemnification is the basis and foundation of insurance coverage and simply means the insured should neither reap economic gain nor incur a loss provided that they have purchased adequate coverage. Indemnity provides that, in the event of a covered loss, the property owner will receive financial compensation equal to that of the covered loss (minus deductible) so that they will be restored to the same financial position they were in prior to the loss, less any required deductible.
Nonetheless, some carriers attempt to keep claim costs down by making initial offers to settle claims that are well below the market rate in any given town for property damage. Few homeowners realize that the estimate of damages that they receive from their insurance company is:
a. an offer to settle their claim (you are in a financial negotiation - most consumers are unaware of this fact), and
b. only an estimate of damages (that’s why it’s called an estimate) and nothing more than an initial offer to settle the claim. You are making a claim for which the insurance company owes you X number of dollars and your carrier enters into a financial negotiation with you.
This is similar in some ways to a prospective homebuyer making an initial offer to purchase a house, which may be considerably lower than the asking price. Neither this hypothetical homeowner nor you are under any obligation to accept any offer that is below market value. Few homeowners are aware of this practice, commonly referred to as low-balling. Some of the larger carriers even make initial offers to settle claims that are as low as 50% of the market rate for repairs, and even lower on occasion. Many residential adjusters have less than five years’ experience and do not know that this is going on either. They only know what they’ve been taught by in their training.
Why is this important to you? Only desperate people will work for an amount significantly less than market rates for any type of work, whether it is construction work or the type of work that you perform every day. The result? Sub-standard work, cut corners, damage left un-repaired. We are professionals and will provide you with a thorough and documented estimate of repairs making it simple for you and your carrier to come to an agreed scope of work and a reasonable, fair price to perform the work. Occasionally (as in all walks of life) we come across an adjuster who is difficult to deal with. We promise to remain professional in our dealings with all parties involved in the process.
Your Deductible
Your insurance company pays all claims minus the deductible you selected when you purchased your policy. The deductible is the policyholder’s contribution - the self-insurance portion of an insurance policy, whenever you have a covered loss. It works just like a co-payment for medication at your local pharmacy - the deductible being the co-pay portion of the transaction. At the pharmacy, you pull a ten-dollar bill (or whatever amount they require) out of your wallet to pay the pharmacist for the co-payment and the insurance company pays the balance. Likewise, with property claims, the homeowner pays their contractor (us) the deductible (their co-pay), and the insurance company pays for everything else, as long as it doesn’t exceed your policy limits.
Contractors Absorbing or Rebating Deductibles
This is known as the free roof scam. See the BBB document https://www.bbb.org/us/storage/50/documents/Roofing%20Deductible%20Assistance%20Programs.pdf for more information about this swindle. Some contractors will agree to subtract the amount of a homeowner’s deductible from their final price, so that the homeowner is able to get the work done for no money out of pocket. Sounds great doesn’t it - but not so fast. We’ve all heard the saying that if something sounds too good to be true, it probably is.
This is illegal in Texas - here is the relevant law: www.statutes.legis.state.tx.us/Docs/BC/htm/BC.27.htm. Not only is this practice a violation of most insurance policies, how does the contractor make up for the uncollected funds? What work is left undone or corners cut to make up for the “discount?” This practice can also lead to insurance fraud, sometimes committed without the policy holder being aware of what has happened. Others see it as a way of improperly profiting from an insurance claim when property owners, with or without the help of their contractor, create and submit fraudulent invoices to their insurance company. Most consumers are unaware that insurance fraud is a felony in most states. To make things even worse, mailing, faxing or emailing a false invoices or cancelled checks over state lines may very well be wire fraud as well. There’s a good reason why the deductible is called the Insured’s contribution. Homeowners must actually contribute, out of pocket, the amount of their deductible and pay it to their contractor.
The Appraisal Process
What can you do when an adjuster (or his supervisor/manager) simply refuses to reasonably negotiate a claim settlement with you that reflects the fair market value for your loss and the work necessary to restore your property? The appraisal process is quite simple and works for homeowners’ claims, auto damage claims, and any other property claim that you may have a dispute over.
Recoverable Deprecation
This paragraph relates to property owners who have a Replacement Cost (RC) policy only: In accordance with the provisions generally governing property insurance policies, the carrier issues at least two checks to policyholders that have incurred a covered loss. The term replacement cost refers to the cost to replace damaged property with brand new property 鈥 “new for old.” Depreciation refers to the diminished value of the property due to wear and tear over time (and occasionally obsolescence). The term actual cash value refers to the depreciated value of the property.
Replacement Cost (RC) - Depreciation = Actual Cash Value (ACV)
The initial check is virtually always for the Actual Cash Value (depreciated value) of the loss. The ACV amount is the total loss amount with depreciation withheld for wear and tear - the property’s depreciated value. What you will typically see in adjustment paperwork is the total amount being held back (the depreciation). It will be noted in the summary and labeled as Recoverable Depreciation. Check your policy to determine how long you have to recover the depreciation amount being held back - generally 365 days from the date of loss (not the date that you receive your first check). You qualify for the recoverable depreciation by completing the repairs within this time-frame and asking for it in writing. If repairs haven’t been completed within eleven months after the date of loss, don’t wait. Consider contacting your Agent and make a written request to extend the time necessary to complete the repairs. A 180 day extension will almost always be allowed, but is not automatic - you make a written request to obtain it. Make sure that you receive written acknowledgement of your request - do not assume they received it! If a policy holder does not request an extension and exceeds the 365 days to make repairs, the depreciation amount being held back may very well be forfeited in accordance with their homeowner’s policy language. The carrier may also send someone out to inspect that the work has been completed before releasing the depreciation being withheld, and/or request invoices and canceled checks before releasing depreciation.
The depreciation payment should be promptly mailed out in check form to you once you let your insurance adjuster know the repairs have been completed. Your adjuster may ask you to forward them a final invoice or copies of canceled checks for the work to verify the actual amount that you paid for the work. In the event that your cost to make all covered repairs is less than our initial estimate, your policy likely provides that the carrier only owes you for what it actually cost to make those repairs with materials of like kind and quality and adjust your final claim amount accordingly. Generally speaking, most policies allow the policy holder to demand depreciation once the roof is completed 鈥 for the roof portion, before the other work has been completed.
General Contractor’s Overhead and Profit Fee
We charge all of our clients a fee for the time and expense to oversee and manage your construction project. This fee is commonly referred to in the construction industry as General Contractor’s Overhead and Profit. This fee is standard and customary, and covers the cost of project management and oversight on projects jobs like yours. If this is an insurance project, you have likely paid premiums that include contractor profit and overhead, and your insurance company should reimburse you for this fee.
Breaking In Your New Roof
The warmth of sunlight seals the mastic sealant (glue) strip the shingle manufacturer places on the lower underside edge of composition shingles. Once sealed, this helps protect your roof from having shingles flapping about and blowing off in moderate to high winds. If the weather is cold or cloudy when your roof is being installed, additional time will be necessary to seal down the lower edge of these shingles. Until then, it is not unusual for the lower edge of many of the shingles to not lie down smoothly, giving your roof a ‘ruffled’ appearance. This is typical and will correct itself after several weeks of sunny, warm days.
Final Check
When the project is substantially complete, we will visit and do a final walk through with you to inspect our work. Any small remaining items will be identified and scheduled for completion. We will present you with a final invoice and your substantial completion certificate and pick up the final check (including your deductible) for the balance owed for the work. If you have not already received payment for your depreciation, you can mail these two documents to secure that payment from your insurance company.
Warranty
A workmanship warranty for the period selected on your contract will be provided to you at the completion the work and payment of all monies due under the contract. This guarantee applies to workmanship only; the manufacturer’s warranty covers all materials.
Agreement
Your Final Contract Price was computed based upon your agreement to abide by all terms and conditions outlined in this Homeowner Awareness Letter and the contract documents executed by you, and includes your agreement that our work crews have at least a full workday, every day, to complete their work.
Thank You
We hope that this letter gives you some awareness of what to expect from us in reference to your roof job and offers you a heightened opportunity for a pleasant experience with us. Thanks again for placing your confidence in us and allowing us to perform work at your home. We appreciate you and hope that you will use us in the future for any construction projects that you may have. Feel free to refer your friends, family and co-workers to us and we will treat them with the same caring and professionalism that you received from us.