Before entering into a Home Building Contract with a Builder some of the countries leading Architects, Quantity Surveyors, Contracts Managers, Project Managers and Government Procurement Departments go to great lengths and often great expense to ensure that the Contract to be signed is Structured so that it meets the stringent requirements pertaining to cost, time, quality and safety. So why is it that people looking to build a New Home rarely give a second thought to the content and structure of the Contract they enter into when signing up with a Builder to build their New Home. A recent survey conducted by a team of leading experts on Contract Management revealed that while Clients looking to build a New Home with a Home Builder spent weeks, months and in some cases years sorting out the design, the finishes schedule and the cost they signed the Building Contract without even reading it...
92% of people surveyed had no idea what they had signed when it came to their Building Contract. Most suggested that because it had some sort of institutional brand tag on it; it was safe and fair and undoubtedly structured to suit their needs.
Go and Read it !!!
What is the big deal some may my ask? In truth there is no big deal if you do not care how long it takes to have your home built and you are not fussed if the work is substandard and you are prepared to wait for every and a day and pay top dollar to have any disputes sorted out.
The reality is that most consumers are not aware of the importance, the relevance and the impact that a well structured Contract has on the outcome of a building project. Why sould they be? Most people only ever build one or two new homes in a life time so why get a Degree in Contract Management? - Generally speaking the average run of the mill housing contract works fine. It is only when problems occur that the Content of the Contract comes the the fore.
A good Building Contract should be fair and it should protect the interests of both parties. Among other things a good Contract should include:
A building inspector inspected a new home for a client. The inspection took place on completion of the brickwork. All the timbers for the roof were on site ready to be installed. Along a back wall there was 3 courses of bricks about 7 meters long that were shoddy. The inspector recommended the bricks be replaced before the roof went on. The builder’s supervisor said that if they did that they would lose the roof carpenters and would not be able to get another team there for six weeks. He said they would fix the bricks before handover.
That was four years ago. The bricks have never been replaced.
Under the Terms and Conditions of a well structured Contract the client would have been able to give the builder a notice instructing them to replace the brickwork before proceeding with the roof framing. The notice would have required the builder to replace it within seven days. If the builder did not replace it within seven days the client could have engaged a bricklayer to replace the bricks. The cost of such replacement would have been deducted from the Contract Sum. It would have been at the Client's discretion whether or not to extend the date for practical completion. If the client directed that no time extension would be granted (which would have been their right) then the builder would have been required to reprogram the works to ensure that practical completion was reached by the due date. Furthermore the client could have deducted 10% of the payment due at brickwork completion as security. – In this scenario the builder would have fixed the brickwork before installing the roof and then would have reprogrammed the work to achieve practical completion by the due date.
The Contract is a vital part of your new home build. So read it and get an opinion on it. There are experts out there that can assist you in this regards. For more information call 0400 587 590 or send an email to firstname.lastname@example.org