I have just finished my first custom home build job. The problem is I went over my contractual completion date by 2 weeks, but there is nothing in the contract that states what amount or if any is to be compensated to homeowner. I want to know what is the industry norm on this issue what do the big builders do in this situation if anything?

Most contractors will not agree to a penalty clause for failing to complete on time unless there is also a bonus clause for completing ahead of time, and if there is a penalty clause, the contractor will likely go on record every single time there is a delay which is beyond his control, seeking to extend the deadline. Penalty clauses can be an administrative nightmare.

In your case, since apparently no penalty is set forth, how can one be assessed? Often the penalty is related to the financial damage sustained by the owner if the project isn't completed on time. What expenses did the owner have, in your case, caused by the two-week delay? Did he have to pay extra rent somewhere? Was a sale of his previous home delayed? Did he have to keep furniture in storage longer than expected? Those are the kinds of costs that can be associated with construction delays, but without the penalty being set forth in the contract beforehand, I'm not sure that the penalties can be assessed now.

If you can identify such costs and elect to voluntarily compensate the owner for them, that would be a matter of choice on your part.

In addition to Richard Hetzel's posting: How much of the delay was weather related? How much was attributable to change orders requested by the home owners? Delays in getting incremental payments? Delays in special order component delivery? Delays caused by injuries to key personnel?

Don't be too quick to offer away your profits, especially if you gave a good-faith, honest effort to deliver the goods as promised. However, for the future, you should cover these contingencies in your estimated timing clause, stating that any change orders, or other delays beyond your explicit control ( make a very explicit list of anything that could cause delays ) shall be added sequentially to the estimated timing for the completion of the project, resulting in a direct extention of the estimated time for completion. You should also consult your attorney regarding indemnification for any and all liquidated damages, or damages, real or imagined, resulting from unforseen and inevitable delays to the completion of the project.

Doesn't sound like fun? Try defending your integrity before a judge asked to award such bugus claims to the "agrieved owner". You'll be thankful that you protected yourself with all the right clauses in the boilerplate of your contract.

I would like to know what state you are in as I may want to use you, or at least recommend someone so honest! I worked for an architectural firm some years ago and they had a clause in their contract to penalize the contractor $1000. a day for each day a job was incomplete. Of course this was a commerical building, but still a good bite off the contractor's profits. If you want to do good and get referrals from the homeowner, try giving them a gift certificate to the local bath & linens type of store. They'll think highly of you and you won't spend a lot for the PR. Seriously, are you in the MD/DC/VA area???

And to add to WJ Parker as I agree with evey thing he said. (assuming WJ is a he) Keep records every day. Even if you have all the clauses in the contract you need a record of these delays done on a daily basis. We always have a daily log that the site managers fill out and submit to the office. Everything from weather, to who showed up and for how long what got done, what material was used and what material was NG and needs to go back. If the new owners show up during the building process take very good notes on what was discussed even if everything was fine and they did not ask for any changes. I do have to say also only being two weeks out is not bad planning It sounds like your on the right track to become a very good custom home builder.

To Whomever cares: Yes, W. J. Parker is a "he". And, yes, a simple log, kept in the same calendar book that you use to keep track of the plumber, electrician, trim carpenter, etc., will go a long way in an arbitration hearing, or court case, since it allows you to document the fact that you had a four inch torrential downpour on the day you were scheduled to cut open the roof to install the four electric skylights the client decided were essential for the new great room, and that the next four days after that were beset with intermittant showers, and that the client missed the three re-scheduled appointments to consult with you on which granite was going into the kitchen. I'm certain that the advice is becoming crystal clear. It's offered from those who have been down that road before. I'm always amazed at how selective the memory of those on the paying end of the equation can be, and how one-sided.

The key word is document. I was once threatened with a lawsuit by an attorney representing a client who was her own worst enemy. My response was a letter a couple of pages long, with every paragraph starting with the words "Accoding to a memo/letter/record of a phone conversation in my files..." I never heard another word, because the lawyer could see that I was documented and therefore fully prepared to offer a vigorous defense.

Richard Hetzel is correct.

The key is to DOCUMENT, DOCUMENT,DOCUMENT...

I once was hired to build and stain a very large, complicated deck for a doctor client of an architect and in my contract had a 'weather' clause....That is, I would complete the job in 60 days, weather excluding, and conditions beyond my control.

Not only did that summer prove to be one of the hottest on record, it also proved to be one of the wettest.

It was not only not possible to work in the continuously rainy weather to construct the deck, it was also either too wet or too hot to appropriately apply stain to the lumber according to the stain manufacturer's own installation instructions....a stain the customer and architect chose and specified.

The owner and architect claimed I had 'defaulted' on my agreement to complete the project within 60 days as agreed to, fired me, and refused to pay.

I won the case very easily by producing the contract, the manufacturer's installation temperatures for the stain, and producing the weather records for the dates in question by contacting the weatherman at the local TV station who documented the rainfall and temperature for each day the job was in progress.

Unfortunaltey for the architect and the doctor, the weather records proved that for 58 of the 60 days of my contract period, the weather was either too hot ot too wet to fulfill my obligations under the contract and I received full compensation for the injustice that was done to me.