It is easy to see the benefits of extending your home or self-building your dream house, whether it is to live in or as an investment. However, having the ‘builders in’ can be one of the most stressful life events people encounter. Not only do you have to navigate the planning process and building regulations approvals, you must deal with designers, engineers, building inspectors and, of course, you need to find, engage and manage a builder or contractor.
Most projects are ultimately completed successfully but at a cost and sadly all too often problems do arise during the course of the project. We regularly come across problems on building projects.
Common scenarios that we encounter are:
- wet weather delayed the works and the contractor claimed for standing time;
- the cost of materials increased, and the contractor wanted more money;
- the contractor could not achieve the architect’s statement designs, no matter what the cost, and the works had to be re-designed;
- the contractor rarely attends site and the works are proceeding very slowly;
- the contractor has caused damage to property;
- the builder demolished the works or part of them because he had not been paid.
You can take steps to protect yourself from unexpected problems and cost increases like these by having a building contract in place.
A building contract is the agreement with the contractor to carry out the works in return for payment. Often this will be in an exchange of letters or emails, but these are unlikely to set out anything more than the works and price already agreed upon. For modest projects you may find that this is adequate, and many people have successfully employed builders on this basis.
However, risk increases as the value of the works rises. The potential for cost increases on a £20,000 project compared to a £200,000 one is very different, and unless you have deep pockets it becomes important to have a more detailed building contract. It’s fair to say that a building contract will not guarantee against things going wrong. However, it will be able to tell you what to do should things go wrong and who’s responsibility it is. It will detail who bears the risk for certain eventualities such as bad weather, the timing of payments, procedures for dealing with additional costs and what insurances are required and so on. That way when problems arise, you can look to the contract for what to do rather than wasting time arguing about who’s responsibility it is.
If you are spending a significant amount on a project, you may want to consider spending a little bit more on the contract and making sure that it is tailored to your project. You can think of it more like a project tool to help you assess the risks that may arise and successfully manage the project. If problems do occur, it will also help you to understand who is responsible for them.
We find that it is better to agree who is doing what before you start the works when the relationship is good, rather than have an expensive dispute over what you thought the builder was going to do after it has gone wrong.
We can provide cost effective support to assist you to better understand the risks involved and prepare a building contract suitable for your project.