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5 Things to Include in your Prefabricated House Contract

Prefabricated Homes
Prefabricated House Contract

If you are planning to build a new home for you and your family to live in, then there are plenty of housing options available to you. Either you could build a conventional site-built home or you could settle for a factory-built prefab home. Many prospective homeowners in the country nowadays look for prefabricated homes because they are affordable, convenient, and more sustainable when compared to site-built homes.

Before buying a prefabricated home though, you must insist on receiving four crucial things from your home dealer or homebuilder. They are modular home legalese, scope of work, specifications, and drawings. The details included in these important documents will protect you, the factory, and the dealer. Below are 5 things that you should include in your prefabricated home contract to protect yourself from potential dangers.


You will definitely want your home contract to state when you are allowed to stop or cancel the construction of your prefabricated house. You can easily do this with a “contingency” clause, which efficiently specifies the grounds for cancellation of the project. However, if you fail to include this in your home contract, then you will not be able to cancel the construction of your home.


Ensure that your prefabricated home contract specifies the payment issues include:

  • The timing and amount of deposits;
  • When do you allow price increases;
  • A disbursement timetable for the contracting job; and
  • Policy for acceptable “holdbacks”.

If any of these details are not included in your home contract, then talk with your homebuilder and add it to the contract as soon as possible.

Verbal Discussions

Prefabricated homes contract must exclude all verbal discussions that you may have had with your homebuilder. This will help you to avoid potential misunderstandings with your homebuilder or prefab home dealer. So, double check the home contract and ensure that all verbal discussions are excluded from it.


Make sure that the coverage of your homebuilder is sufficient by asking him to deliver a “certificate of insurance” from the insurance company. If your homebuilder doesn’t have any insurance coverage, then it is better to look for another experienced prefabricated homebuilder with insurance.


The warranty part of your prefabricated home contract must consist of these four components.

  • The items that are not covered and the items that are covered.
  • Building standards that are applicable to each item.
  • Coverage length.
  • The method of dispute resolution.