Thinking about building a custom home in Monument and wondering how the design-build contract really works? The agreement you sign will shape your budget, timeline, and day-to-day experience from first sketch to final walk-through. You want local clarity, fewer surprises, and a smooth process. This guide explains design-build basics, key contract clauses, Monument-specific rules, realistic budgets, and timelines so you can move forward with confidence. Let’s dive in.
Design-build vs. design-bid-build
Design-build means you hire one team for both design and construction under a single contract. Design-bid-build separates design and construction into two contracts. Here is how they differ in practice:
- Design-build advantages: single point of responsibility, faster schedules when phases overlap, and earlier cost certainty when using a fixed price or GMP.
- Design-build challenges: less control over fine-grain design unless your contract preserves it, possibly fewer competitive bids for trades, and the need to define allowances clearly to avoid budget surprises.
- Design-bid-build tradeoffs: more direct control of design and broader trade pricing, but more admin work and potential conflicts if design errors appear.
Industry groups like the Design-Build Institute of America and the American Institute of Architects offer model agreements that many teams use as a starting point.
Local rules in Monument and El Paso County
Confirm your jurisdiction
First, confirm whether your lot is inside the Town of Monument or in unincorporated El Paso County. The primary permitting authority differs, which affects submittals, review times, inspections, and fees. Jurisdiction is the foundation for your schedule and budget planning.
Codes, wildfire, and site factors
Local agencies adopt the International Residential Code and related codes with local amendments. In and around Monument, plan for wildfire-aware design and defensible space recommendations. Common site factors include slopes, rock or shallow bedrock, drainage and floodplain considerations, and the availability of public utilities versus well and septic. A geotechnical report is a smart early step.
HOA and ARC approvals
Many neighborhoods have HOA architectural review. ARC approvals can add weeks or months. Coordinate HOA timelines with municipal permit reviews so they run in parallel when possible.
Licensing, insurance, and liens
Verify that architects and engineers are licensed in Colorado and that your builder is properly insured and registered. Colorado’s mechanic’s lien laws protect contractors and subs. Your contract should require lien waivers with each draw to protect you from unpaid claims.
Permits and inspections
Permit review times vary with season and submittal quality. Spring and summer often see longer timelines. Plan your schedule to account for municipal inspection availability as trades complete rough-ins and finishes.
Contract types to consider
- Lump Sum or Fixed Price: A firm price for a defined scope. Best for budget certainty when plans and specs are clear.
- Guaranteed Maximum Price: A GMP caps total cost. You pay actuals up to the cap, plus the agreed fee. Clarify contingency use and audit rights.
- Cost-Plus with Fee: Transparent costs, but less price certainty. Useful when scope is evolving.
- Progressive or Design-Assist: Engage design first, then set a GMP once documents are developed.
Must-have clauses in your agreement
Clear scope of work
Spell out what is included and excluded. List plans, specifications, site work, grading, utilities, driveway, landscaping, testing, permit procurement, and fees. Attach an exhibit with inclusions and exclusions.
Payment schedule and retainage
Tie draws to milestones such as design stages, mobilization, foundation, framing, MEP rough, finishes, and substantial completion. Address retainage, often 5 to 10 percent, held until closeout.
Allowances and selections
Define each allowance by category and what it includes. State brand or quality tiers when possible and the deadline for selections. Clarify how unused funds are credited and how upgrades are priced.
Change orders and time extensions
Require written change orders signed by both parties before work proceeds. Define pricing methods such as lump sum or time and materials with stated markups. Include how calendar days are added if a change impacts schedule.
Schedule milestones
Include a baseline schedule and update process. Note weather allowances and permit dependencies for time adjustments. You can consider incentives or liquidated damages when appropriate.
Warranty and post-completion
Specify warranty periods and who handles callbacks. Common structures include 1 year for workmanship, 2 years for systems, and 10 years for structural items, if negotiated in the contract. State response times and punchlist procedures.
Subcontractors and pricing approach
State whether you can review proposed key subs and whether competitive bidding is required for certain trades. This improves transparency on cost and quality.
Insurance and bonds
Require general liability, builder’s risk during construction, and worker’s compensation where applicable. Performance or payment bonds are less common for single-family homes but can be negotiated.
Plans and intellectual property
Clarify who owns the drawings and whether you have the right to reuse the plans. Many owners want ownership or broad use rights for the final construction set.
Dispute resolution and termination
Confirm Colorado governing law and an agreed venue such as El Paso County. Establish a stepwise process that uses mediation, then arbitration or litigation if needed. Detail termination conditions, notice periods, and how work completed will be accounted for.
Lien waivers and payment protections
Tie every draw to conditional and then unconditional lien waivers from the builder and subs. Keep copies with your project records.
Budgeting smarter: allowances, contingencies, changes
Set realistic allowances
Typical allowance buckets include cabinetry and countertops, flooring, lighting and electrical fixtures, appliances, plumbing fixtures, HVAC equipment, exterior cladding or stone, and landscaping. Label whether the allowance covers product only or product plus install. Unclear allowances are a common cause of budget conflict.
Plan contingencies that fit the site
- Design contingency: often 5 to 10 percent during early design to cover scope refinement.
- Construction contingency: often 5 to 10 percent, and up to 10 to 15 percent on complex or uncertain sites.
- Owner’s contingency: many owners hold 5 to 10 percent outside the contract for discretionary upgrades.
In Monument, add buffer for grading, retaining walls, rock excavation, possible well or septic, and wildfire mitigation measures.
Use a disciplined change order process
Require itemized backup for pricing, such as subcontractor quotes or supplier invoices. Agree on markups for labor and materials. Document time impacts when you approve the cost.
Sample design-build timeline in Monument
Actual durations vary by site and level of finish, but a custom design-build home in the Monument area commonly runs 9 to 18 months from contract to move-in. A sample flow looks like this:
- Pre-contract due diligence, 2 to 6 weeks: utilities, setbacks, HOA rules, survey, geotechnical scope.
- Conceptual and schematic design, 2 to 6 weeks.
- Design development, 4 to 8 weeks.
- Construction documents and permit drawings, 6 to 12 weeks.
- Permit reviews, 2 to 12 or more weeks. HOA or ARC reviews can run in parallel.
- Subcontractor pricing or establishing GMP, 2 to 6 weeks.
- Mobilization and site work, 2 to 8 weeks.
- Foundation and slab, 2 to 6 weeks.
- Framing and envelope, 4 to 12 weeks.
- Mechanical, electrical, and plumbing rough-ins, 3 to 8 weeks.
- Insulation, drywall, and interiors, 6 to 12 weeks.
- Final finishes and exterior work, 4 to 8 weeks.
- Final inspections and Certificate of Occupancy, 1 to 4 weeks.
Include a baseline schedule in your contract and request regular updates. Note long lead items such as custom windows, specialty millwork, stone, or certain appliances early.
Due diligence before you sign
Use this checklist to protect your budget and timeline:
- Confirm if your lot is in the Town of Monument or unincorporated El Paso County.
- Order a site survey and a geotechnical report before finalizing foundation design and pricing.
- Review HOA covenants, ARC requirements, and expected timelines.
- Verify licenses and insurance for architects, engineers, and the builder. Ask for references for similar local projects.
- Request sample contracts, warranty language, draw schedules, and change order forms.
- Ask for the proposed subcontractor list for key trades and check references.
- Clarify who pays permit fees, impact fees, and utility tap fees, and whether they are included in the GMP.
- Discuss contingency levels and who controls contingency funds.
- Define selection deadlines and what happens if you miss them.
- Require lien waivers with every payment and progress documentation at site meetings.
How we help you build with confidence
Building in Monument is equal parts vision and technical planning. You deserve a guide who understands land, HOAs, permitting, and construction. CC Signature Group focuses on land, build-ready lots, and new construction across the Front Range. We help you choose the right lot, coordinate with your design-build team, line up due diligence, and keep selections and approvals on track so your budget and schedule stay intact.
Ready to plan your custom build in Monument? Connect with CC Signature Group - Camellia Coray to map your next steps and move forward with confidence.
FAQs
What is the main benefit of a design-build contract for Monument custom homes?
- You get one team and one contract for design and construction, which simplifies communication and can shorten the overall schedule.
How do allowances work in design-build agreements?
- The contract sets dollar amounts for items like cabinets, flooring, and fixtures. If selections exceed the allowance, you pay the difference. Unused funds are typically credited back if specified.
What contingencies should I include for a Monument build?
- Many owners plan 5 to 10 percent for design contingency, 5 to 10 percent for construction contingency, and another 5 to 10 percent as an owner reserve, with higher ranges for complex or rocky sites.
Who issues permits in the Monument area for new homes?
- The Town of Monument handles permits inside town limits. El Paso County handles permits for unincorporated areas, with separate public health approvals for wells or septic where needed.
How long does a custom design-build project take in Monument?
- Timelines commonly run 9 to 18 months from contract to move-in, depending on site conditions, permitting timelines, design complexity, and finish levels.
What should a change order include to protect my budget?
- A written, signed scope description, itemized cost backup, agreed pricing method and markups, and any approved time extension measured in calendar days.
