Full-Service Law Firm solving complex challenges through bold thinking, precise execution, and shared purpose.

Full Service Law Firm | Michael Best & Friedrich LLP

Specializing in the Intersection of Business &amp; Government

Meet our team of trusted advisors, strategic thinkers, and community builders dedicated to client success.

Learn about our full-service legal and business solutions, designed to address complex challenges for leading organizations across industries.

Access thought leadership, news, and resources to stay informed about the latest trends, legal developments, and industry innovations.

Discover how partnership, bold thinking, and precise execution drive results for clients nationwide.

Explore how our national reach and local expertise support clients across the United States and beyond.

Grow at a firm designed to bring out your best.

The Metropolitan Builders Association of Greater Milwaukee (“MBA”) recently released an updated version of its standard Home Construction Contract. The revised form includes a number of builder-favorable risk allocations that may materially impact residential owners (“Homeowners”).&nbsp;

core/paragraph

Below is a summary of some of the most significant changes and practical considerations for owners entering into residential construction contracts using the updated form, which may be used both for new construction and home renovation projects.&nbsp;

core/heading

Builders now have an express right to terminate the contract if the Homeowner fails to provide adequate financial assurances when requested, including in connection with change orders or increases in the contract price. This change increases termination exposure throughout the project lifecycle and underscores the importance of proactively managing financing disclosures and responsiveness to Builder requests.&nbsp;&nbsp;

The form applies a default 25% markup for overhead and profit where no other percentage is specified (including for termination costs, change orders, delays, and differing site conditions). This effectively establishes a built-in contractor fee floor, which may exceed market norms if not negotiated.&nbsp;

Change orders may now be approved via e-mail, text, or other “written commitment.”&nbsp; Although this may facilitate administration of the contract, this also makes approval processes less formal, which could result in less detail or information shared with owners for binding cost and scope changes. Ultimately, this process may increase risk of unintended approvals that carry major consequences.&nbsp;

4. Expanded Builder Discretion – Differing Site Conditions and Weather 

The Builder may proceed without prior Homeowner approval or notice in certain circumstances involving differing site conditions, while still preserving its right to recover additional costs and time extensions. This discretion authorizes Builder to incur additional costs and receive extensions to the deadline for “Substantial Completion”, and can minimize a Homeowner’s right to contest such adjustments. Similarly, adverse weather is expressly treated the same as a differing site condition, also exposing Homeowners to cost increases and schedule extensions. These provisions substantially shift site-related risk to the Homeowner, and limit real-time oversight of cost and schedule impacts.&nbsp;

Builders now maintain broader rights to claim time extensions and recover costs for delays outside their control. The contract also imposes mutual obligations on Builder and Homeowners to mitigate delays, which may increase administration and coordination burdens for Homeowners.&nbsp;

The Builder’s limited warranty now expressly operates as the sole and exclusive remedy for “Construction Defects”, design deficiencies, material deficiencies, construction deficiencies (i.e., poor quality or substandard workmanship), and negative site conditions, all regardless of legal theory. This significantly limits a Homeowner’s rights and remedies, and eliminates many common law and statutory claims. Conversely, Builder maintains broader express rights upon a Homeowner default, including an express right to terminate the contract, along with any other remedy available to Builder under law or equity. Effectively, Builders and Homeowners maintain unequal remedies in event of the other party’s default.&nbsp;

The contract includes a broad indemnity that requires the Homeowner to defend and indemnify the Builder against a wide range of claims, including third-party and site-related issues. The scope of this indemnity may extend beyond typical residential contracting standards and requires careful consideration of a Homeowner’s risk tolerance.&nbsp;

8. New Optional Material Escalation Provisions 

New optional provisions authorize a Builder to pass through material cost increases and grant Builder a termination right if cost increases exceed a specified threshold (default 20%). These provisions introduce price volatility risk for Homeowners and open the door to potential contract termination mid-project. Arguably, this inequitably shifts market risks directly onto Homeowners.&nbsp;

The revised form reflects a meaningful shift in risk toward Homeowners. Key areas for careful review and negotiation include:&nbsp;

core/list-item

Allocation of site condition and weather risk 

Warranty limitations and exclusive remedy provisions 

core/list

Given the significant investment Homeowners make in new home or renovation projects, Homeowners should consider engaging legal counsel early in the process to evaluate and negotiate these provisions before selecting a contractor and executing contracts for construction. Our Construction Team regularly advises owners on residential construction contracts in Wisconsin (including MBA forms and custom agreements). We assist with risk allocation, alignment with insurance and lender requirements, and negotiation of market terms.&nbsp;

Contact us if you would like assistance evaluating how these changes may impact your new builds or significant renovations.&nbsp;

Modern glass office buildings reflecting a colorful sunset sky, showcasing contemporary urban architecture in a city skyline.

Key Changes to Milwaukee Metropolitan Builders Association (MBA) Home Construction Contract (2026 Update)

Related People

Related Capabilities

You may also be interested in these

California Legislature Passes Bill Limiting CIPA Website-Tracking Lawsuits

Wisconsin Circuit Court Reverses Shorewood Beach Access Trespass Conviction, Potentially Expanding Public Access Rights Along Lake Michigan

Does Your Church Need a Bag Policy? What Size, What Standard, and Why It Matters Now?