Construction Management Contract This agreement is made by (Contractor) and (Owner) on the date written beside our signatures.

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1 Construction Management Contract This agreement is made by (Contractor) and (Owner) on the date written beside our signatures. Contractor Address Address City, Zip Work Phone Number: Cell Phone Number: Fax Number: Address: License Number: will be referred to as CM Contractor throughout this agreement. CM Contractor agrees that no change will be made in construction management personnel without the express approval of Owner. Construction on the Project will be managed by: Owner Address Address City, Zip Day Phone Number: Cell Phone Number: Fax Number: Address: is operating as a partnership in the state of. will be referred to as Owner throughout this agreement. Owner's Representative Owner will be represented by (Owner's Representative) as described in this agreement. Address Address City, State Zip Day Phone Number: Cell Phone Number: Fax Number: Page 1

2 Address: will be referred to as Owner's Representative throughout this agreement. Nothing in this contract should be interpreted as giving Owner's Representative the authority to obligate Owner to pay any amount to a third party or perform any act for a third party or waive any obligation due a third party. The Construction Site Address Address City, Tennessee Zip I. Project Description A. For a price identified below, CM Contractor agrees to act as construction manager and consultant for Owner on the Work identified in this agreement as the Project. Anything in this agreement to the contrary notwithstanding, references to the "Work" means tasks identified under Scope of Work in this agreement and all responsibilities which can be reasonably inferred from those tasks but which are not specifically excluded from the scope of work. References to the "Contract Documents" means this Agreement and all documents incorporated by reference into this Agreement. In the context of work to be performed by others, "Contract Documents" can refer to Plans, Specifications and agreements between the property owner and contractors or suppliers for the construction of Project. B. The Project is best described as follows: _ II. Contract Price A. In addition to any other charges specified in this agreement, Owner agrees to pay CM Contractor a fee of $11.11 per hour for management services provided during completion of the Project. No fee will be paid for any time worked before the start date or after the Completion Date specified in this agreement. B. In addition to the fee paid under this agreement and any additional expenses approved in advance by Owner, CM Contractor will be reimbursed for the following but only if documented with receipts and submitted to Owner with the next invoice presented by CM Contractor. 1. Required travel and travel-related expenses more than 50 miles from the Job Site if reasonably necessary for completion of the Project. 2. Materials and equipment required to maintain a Job Site office including office trailer, furnishing, utilities and consumable supplies. III. Scheduled Start of Construction A. Work under this agreement will begin within 11 calendar days after the following contingencies have been met. Page 2

3 1. Owner has obtained a construction loan or other financing acceptable to CM Contractor. 2. Owner has furnished CM Contractor with evidence of ownership of the property satisfactory to CM Contractor. 3. CM Contractor has received written notice from the lien holder or the title company insuring lien holder's security interest in the property that all documents required to be recorded prior to the commencement of construction have been properly recorded. IV. Scheduled Completion of Construction A. Work under this agreement will be Substantially Complete within 11 calendar days after the date construction begins. V. Documents Incorporated A. This agreement incorporates by reference certain disclosures and notices required by federal and state law. The following documents are incorporated as though included in full as part of this agreement. Notice of Mechanics' Lien B. VI. Scope of Work A. Manage design services. CM Contractor will develop an understanding of the Project as conceived by Owner and will recommend design and engineering professionals best able to meet the criteria for the Project set by Owner. CM Contractor will Work with design personnel approved by Owner to create a plan for the Project which meets the needs of Owner. If required, CM Contractor will recommend alternative building materials, systems and construction details which allow completion of the Project within the time and budget established by Owner. The plan developed under direction of the CM Contractor will include working drawings and specifications adequate to construct the Project in compliance with applicable law, regulations and ordinances. B. Review the plans and specs. CM Contractor will review the Plans and Specifications to ensure that the Project can be completed in compliance with applicable laws and ordinances and within the schedule and budget set for the Project. Plan review will consider availability of materials and labor and selection of alternate materials or building methods. CM Contractor will provide a written report on any problems found in the Plans and Specifications and will make a recommendation on dividing work between construction trade contractors. At the request of Owner, CM Contractor will prepare a written construction management plan, a preliminary estimate of construction costs and a proposed Construction Schedule based on the latest Plans and Specifications available. Page 3

4 C. Prepare bid packages and evaluate the bids. CM Contractor will prepare Bid forms and invitations to bid which will accompany the Plans and Specifications distributed to prospective bidders. CM Contractor will solicit Bids and conduct prebid conferences to familiarize prospective bidders with the Project. CM Contractor will conduct the bid opening and forward all Bids received to Owner with an evaluation of each Bid and a recommendation to either reject the Bid or award the contract. D. Review the proposed contract forms. CM Contractor will review all proposed agreements with Contractors, Subcontractors, Suppliers and service providers and forward an evaluation of each proposal to Owner with a recommendation that Owner either reject or approve the agreement. CM Contractor will ensure that all work required to complete the Project is placed under contract, including temporary facilities and general requirements not associated with any construction trade. Owner will deliver to CM Contractor a copy of all written agreements when approved by Owner and a written summary of any oral agreements or understandings Owner reaches with Contractors, Subcontractors, Suppliers or service providers. E. Manage construction. CM Contractor will monitor Work on the Project both on and off the Job Site on a daily basis to ensure that construction means, methods, techniques, sequences and procedures followed by Contractors, Suppliers and service providers are in compliance with their contracts and agreements and that construction is proceeding as planned. Discrepancies and defects in the Work and safety violations will be reported in writing to Owner and resolved by CM Contractor without the intervention of Owner or design professionals whenever possible. When requested by Owner, CM Contractor will prepare or update the written cost estimate, construction management plan and project schedule. If any phase of construction is not proceeding as planned in spite of the best efforts by CM Contractor, CM Contractor will recommend steps Owner should take to ensure successful completion of the Project on time and within budget. F. Keep Owner informed of progress. When submitting any invoice for construction management services, CM Contractor will include a written report to Owner that (1) compares actual costs to date with estimated costs, and (2) compares actual job progress to date with scheduled job progress, and (3) notes and explains any problems encountered which might increase costs or extend the Completion Date, and (4) identifies steps being taken by CM Contractor to ensure completion of the Project as scheduled and within budget. G. Evaluate payment requests. CM Contractor will review, evaluate and forward to Owner each request for payment and each lien waiver received from Contractors, Suppliers, and service providers. CM Contractor will identify whether the amount requested is correct based on work completed, materials supplied and terms of the applicable contract. CM Contractor will recommend an adjustment to any request for payment which does not accurately reflect the obligation of Owner for payment. CM Contractor will include with each request for payment a summary which shows the total Contract Price, payments to date on that contract and Retainage allowed (if any). Page 4

5 H. Communicate with contractors and suppliers. CM Contractor will assist in resolving project development issues which may arise with Contractors, Suppliers, service providers or government authority. Issues which can not be resolved directly by CM Contractor will be referred to Owner or a design professional for resolution. CM Contractor will establish channels and procedures which ensure prompt transmission and response to requests for information, correspondence, memoranda, clarifications, Submittals, Shop Drawings, product data and Samples required for completion of the Project. When required, CM Contractor will schedule and conduct meetings to resolve issues which affect schedule, safety, cost or project management. CM Contractor will ensure that minutes of these meetings are distributed to all concerned, including Owner. I. Assist with change orders. CM Contractor will respond to each request for a Change Order by ensuring that the form of the request complies with the contractor's agreement. When in compliance, CM Contractor will forward the request for a Change Order to Owner with a recommendation to either approve or reject the requested change. When a Change Order is approved, CM Contractor will assist in preparing documentation for the change. J. Assist with construction claims. CM Contractor will assist in resolving construction disputes by evaluating Claims, negotiating settlements when possible and forwarding complete documentation for any unresolved claim to Owner with a recommendation for acceptance or rejection. CM Contractor will recommend any action Owner should take after termination or default of any Contractor, Supplier or service provider. If arbitration or a legal action is required to resolve a construction dispute, CM Contractor agrees to prepare documentation, attend hearings or conferences and offer testimony which may tend to support the position of Owner in denying the Claim, unless the Claim is on behalf of CM Contractor. K. Evaluate insurance coverage. CM Contractor will review insurance coverage and Bonds provided by Contractors, Suppliers and service providers and advise Owner of any coverage that does not meet Contract Requirements. In the event of an insured loss, CM Contractor will advise Owner on the appropriate response. L. Manage project closeout. CM Contractor will use best efforts to ensure that each phase of the Project is completed according to the Contract Documents. CM Contractor will conduct an inspection when any contractor, subcontractor or vendor claims their Work is Substantially Complete and forward to Owner a report on that Inspection with a Punchlist noting items not completed or requiring rework. CM Contractor will manage final testing, start-up and completion of Punchlist items and inform Owner when it is time to conduct the final Inspection. CM Contractor will assist in that final Inspection and advise Owner when it is appropriate to acknowledge Final Completion and file a notice of completion. During any warranty or call-back period, CM Contractor will assist Owner in resolving Claims against Contractors, Suppliers and service providers and monitor any required remedial Work. M. Scope of Work - Disclaimer Page 5

6 1. CM Contractor will perform no Work on the construction Site other than to observe progress, communicate with Contractors, Suppliers and service providers and report progress to Owner. Construction means, methods, techniques, sequences, procedures and safety on site are the sole the responsibility of Contractors, Suppliers and service providers working for Owner. CM Contractor will make best efforts to ensure successful completion of Project on schedule and within budget but is not responsible for failure of any Contractor, Supplier or service provider to complete Work as agreed. CM Contractor takes no responsibility for acts or omissions of any Contractor, Supplier or service provider other than those employed by CM Contractor. 2. Nothing in this contract should be interpreted to require CM Contractor to perform architectural, engineering, accounting or legal services. All tests, Inspections, surveys, reports and investigations required to complete the Project are the responsibility of Owner. 3. CM Contractor has no liability for payments due Contractors, Subcontractors, tradespeople, Suppliers, service providers or government authorities. There will be no contractual relationship between CM Contractor and any Contractor, Subcontractor, tradespeople, Supplier or service provider on the Project. 4. Nothing in this contract should be interpreted as giving CM Contractor the authority to obligate Owner to pay any amount to a third party or perform any act for a third party or waive any obligation of a third party. 5. Owner reserves the right to use one or more Separate Contractors on the Job Site or on adjacent sites while Work is being done under this agreement. This right shall extend to portions of the Work which have been deleted from this contract by Change Order. VII. Owner's Responsibilities A. Owner affirms that Owner has the right to enter into this agreement and has the right to contract for construction of the Project on the Job Site. Owner shall pay all taxes and assessments due on the Job Site during the period of construction and shall take all reasonable actions required to protect marketable title to the Job Site. B. Owner will ensure that Owner's Representative responds in writing and with reasonable promptness to written requests from CM Contractor for (1) Interpretation of the Plans or Specifications, or (2) Other information relevant to completion of the Work. CM Contractor is authorized to rely on written responses from Owner's Representative. C. Owner shall have sole responsibility to secure financing for the Project and shall pay all fees, charges, or other costs of such financing, including Inspection fees charged by any lender. The nonperformance of any lender shall not affect the obligation of Owner to CM Contractor. Owner hereby authorizes and directs any lender on the Project to furnish CM Contractor with full information on undisbursed loan proceeds when requested by CM Contractor. D. Owner will not interfere with or permit others to interfere with, stop, hinder, or delay completion of the Work by CM Contractor or Subcontractors except as provided under this agreement. E. Owner will coordinate the Work of Separate Contractors on the Job Site to ensure that Work under this contract can proceed without interference. Owner affirms that contracts with Separate Contractors require their cooperation with CM Contractor. Page 6

7 F. All materials to be furnished by Owner under the Contract Documents shall be on hand and available at the location specified, when required in the normal course of construction. CM Contractor makes no warrant that materials Furnished by Owner are suitable for use in the Project and may reject such materials if Installation would materially increase the cost of construction or substantially delay completion of the Project. G. Owner shall obtain all consents and approvals required from any architectural review committee, homeowners association, or similar entity having the right to review and approve Plans prior to construction. H. On written request from CM Contractor, Owner shall identify (1) The legal description of the property being improved, (2) Whether there is a Surety Bond in effect on the improvement Project and, if so, the name and last known address of the Surety and a copy of the Bond, and (3) Whether there are any prior recorded liens or security interests on the real property being improved and, if so, the name and address of the person having the lien or security interest. VIII. Payment Plan A. Owner will pay to CM Contractor the Contract Price in installments consisting of progress payments and a final payment on completion of the Work. IX. Progress Payments A. Schedule of Progress Payments 1. Each progress payment will cover Work done during the pay period. If a progress payment would be due on a legal holiday, the payment will be made on the last business Day before that holiday. 2. Progress payments will be made monthly on the fourth Friday of each month. B. Processing of Progress Payments 1. No later than 2 calendar days before a progress payment is due under the terms of this agreement, CM Contractor shall submit to Owner's Representative an application for payment itemizing charges for Work done in previous pay periods and for Work done in the current pay period, including adjustments to the Contract Price resulting from approved Change Orders or other changes required by Owner. Within a reasonable time after receipt of a request for payment, Owner's Representative will inform CM Contractor and Owner that a Certification of Payment has been issued covering all, part, or none of the payment request. If any portion of an application for payment is not approved, CM Contractor shall be entitled to payment on the portion approved. 2. Except as provided otherwise in this agreement, Owner shall pay the amount due within 2 calendar days after approval of any application for progress or final payment. X. Reimbursement of Expenses A. Materials and equipment required to maintain a Job Site office including office trailer, furnishing, utilities and consumable supplies. B. Required travel and travel-related expenses more than 50 miles from the Job Site if reasonably necessary for completion of the Project. Page 7

8 XI. Final Payment A. CM Contractor will submit an application for final payment and will notify Owner's Representative when the Work has been completed. Owner's Representative will issue a certificate of completion on determination that the Project is complete and in compliance with the Contract Documents. When the certificate of completion is issued, the entire unpaid balance of the contract amount is payable to CM Contractor. B. Making of final payment constitutes waiver of all Claims by Owner against CM Contractor except those Claims previously made in writing and delivered to CM Contractor and those obligations otherwise provided by this agreement or by operation of Law. C. The acceptance of final payment by CM Contractor constitutes a complete and unconditional waiver and release of any and all Claims by CM Contractor of whatever nature, and regardless of whether they are then known or unknown, and a complete and unconditional release of Owner, and every person for whom Owner is responsible, for any and all matters related to the contract or otherwise, except those Claims which have been made in writing and identified by CM Contractor as not having been settled at that time. D. Owner has no obligation to make final payment until unconditional waivers of lien in a form satisfactory to Owner, lenders and Sureties have been received from CM Contractor, Subcontractors, vendors, tradesmen, and all Material Suppliers with lien rights on the Project. CM Contractor may furnish a Bond satisfactory to Owner in lieu of waivers of lien. E. Owner has no obligation to make final payment until all as-built Drawings, certificates, warranties and job records required by the Contract Documents have been submitted to Owner. F. Owner has no obligation to make final payment until all Punch List items have been satisfactorily completed unless Owner agrees to accept a certified check equal to the value of any uncompleted Work. G. Owner has no obligation to make final payment until a certificate of occupancy has been issued or a final Inspection has been completed by the appropriate governing authority. H. Owner has no obligation to make final payment until all applicable certificates of insurance required to remain in force after completion of the Work have been delivered to Owner. I. Owner has no obligation to make final payment until all Sureties having issued Bonds on the Project give their consent to final payment by Owner. XII. Dispute Resolution A. Except as provided elsewhere in this agreement, all Claims and disputes between CM Contractor and Owner arising out of or relating to the Contract Documents or contract warranty or the breach thereof, except for Claims which have been waived by the making or acceptance of final payment, shall be decided by courts of competent jurisdiction in the county where the Project is located. B. Should either Party bring suit in court to enforce the terms of this agreement, any judgment awarded shall include court costs and reasonable attorney's fees to the successful Party plus interest at the legal rate. Page 8

9 XIII. Insurance A. Certificates of Insurance 1. Owner, consultants to, and representatives of Owner shall be included as additional insureds for and relating to the Work to be performed by CM Contractor and Subcontractors under this agreement. Coverage afforded to the additional insured is limited to liability specifically resulting from the conduct of CM Contractor. B. Insurance Details 1. Insurance coverage provided by CM Contractor under the terms of this contract shall not be construed as a limit on the liability of CM Contractor for damages resulting from operations under this contract, nor shall insurance coverage discharge the separate and independent duty of CM Contractor to defend, Indemnify, and hold Owner harmless pursuant to other provisions of this contract. In no instance will Owner's exercise of an option to occupy and use completed portions of the Work relieve CM Contractor of its obligation to maintain the required insurance until the date of final acceptance of the Work. C. Commercial General Liability Insurance (CGL) 1. As an alternative to including Owner as an additional insured under a comprehensive general liability policy, CM Contractor may provide an Owner's and Contractor's Protective Liability Policy (OCP Policy). If CM Contractor is unable to procure the minimum amounts of insurance in a single policy, CM Contractor may provide required policy limits through a combination of a primary OCP Policy and one or more excess policies. Owner shall be the named insured on the OCP Policy and, if applicable, the excess policy. Each policy shall be endorsed to include each Subcontractor of every Tier as the Contractor designated in the declarations. 2. Minimum Contractor's liability coverage shall be: $2,000,000 combined bodily injury and property damage single occurrence limit, annual aggregate limit of $4,000,000, products and completed operations aggregate limit of $2,000,000, personal and advertising injury aggregate limit of $2,000,000. D. Builder's Risk Insurance 1. Owner shall provide builder's risk insurance covering property damage to the Project during the construction period. Owner accepts the risk of damage to the Work during construction and agrees to Indemnify and hold harmless CM Contractor and Subcontractors at any Tier from losses resulting from uninsured damage to the Work prior to final payment under this agreement. XIV. Indemnity A. CM Contractor shall defend, Indemnify, and hold harmless Owner against all loss, liability, costs, and damage of any kind whatsoever that arises out of or results from performance of Work under this agreement provided such loss, liability, costs, and damage is attributable to bodily injury, sickness, disease or death, or to injury or destruction of property (other than the Work itself) but only to the extent caused by the negligent acts or omissions of CM Contractor. B. Indemnification by CM Contractor shall not extend to the liability of Owner's Representative, agent or employee of Owner's Representative arising out of the preparation or approval of maps, Drawings, opinions, reports, surveys, Change Orders, designs or Specifications, or the giving of or Page 9

10 the failure to give directions or instructions by Owner's Representative, agent or employee of Owner's Representative. C. Indemnification of Owner is limited to the extent of insurance coverage required to be carried by CM Contractor under this agreement. D. Owner warrants and affirms that Owner maintains liability and property insurance which covers consequential damage which may occur during the course of construction and agrees to Indemnify and hold CM Contractor harmless for any loss which occurs to third parties as a result of construction undertaken by this agreement. E. CM Contractor shall provide Owner with a certificate of insurance from a licensed insurance carrier which demonstrates that Owner is an additional insured under the liability insurance policy of CM Contractor. XV. Consequential Damages A. CM Contractor and Owner waive all Claims for consequential damages against each other, their respective officers, directors, partners, employees, agents, consultants and Subcontractors, arising out of or relating to this contract or the termination of this contract, except those consequential damages covered by insurance or specifically provided elsewhere in this agreement. Page 10

11 Signatures CM Contractor may not begin Work before receiving from Owner a written notice to proceed. Any Work performed by CM Contractor before receipt of the notice to proceed shall be done at the risk of CM Contractor and without obligation of Owner. By signing this agreement, CM Contractor confirms Inspection of the Job Site and signifies familiarity with all local conditions, Laws, and regulations under which the Work is to be performed. This contract shall not be effective until financing for the Project has been approved and funds are available. In the event that Owner is unable to get financing for the Project within 60 days after the contract is signed, this contract shall be considered terminated unless Owner and CM Contractor mutually agree to an extension. This agreement is entered into as of the date written below., Owner (Signature) (Date) (Printed Name and Title), Contractor (Signature) (Date) (Printed Name and Title) Page 11

12 Notice of Mechanics' Lien Delivered this day of, 20, by CM Contractor The above-captioned contractor hereby gives notice to the owner of the property to be improved, that the contractor is about to begin improving the property according to the terms and conditions of the contract and that under the provisions of the state law Tennessee Code Annotated Sections to [mechanics' liens]: (1) There shall be a lien upon the real property and building for the improvements made in favor of the contractor, mechanic, laborer, founder or machinist, who does the work, or furnishes the materials for such improvements for a duration of one (1) year after the work is finished or materials furnished; (2) Except as modified by Tennessee Code Annotated Section [no mechanics' liens by subcontractors on owner-occupied residences of 1 to 4 units], every person contracted with or employed to work on the buildings or to furnish materials for the same with the above-named contractor shall have a lien on the property for that person's work or material; provided, that such person notify the owner in writing within ninety (90) days after the completion of the improvement, which lien will continue for ninety (90) days after such notice; (3) Except as modified by Tennessee Code Annotated Section [no mechanics' liens by subcontractors on owner-occupied residences of 1 to 4 units], these liens can be enforced even though the contractor has been paid in full if the contractor has not paid the persons who furnished the labor or materials for the improvement. (Owner's Signature) (Date) Page 12

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