Extending your home - Part 3 - Building contracts

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- Tendering the work

Your architect or draftsman has safely negotiated the planning hurdles and has processed a set of construction plans through the Building Control department. You now have the permissions you need to start work. For many small residential projects, the design involvement by the architect, or draughtsman, is often curtailed at his point, unless that is, your project includes many bespoke architectural details and interior fittings. These too will need to be designed and drawn if they are to be included in the builder's tender. Where quality of finish, or build cost, is expected to be high, your designer may have identified the need for the preparation of a specification document. This document will nail down the quality standards and correct construction procedures required, for the different trades and building operations, and will make reference to the relevant codes of practice. While your builder may not have time to wade through the dense copy, it serves as a legal document if quality standards fail to live up to expectation. Much work, and hence cost, is involved in the preparation of a specification, as it is imperative that it is prepared with some care, as with all legal documents.

With all the documentation in place you will want to get a price for the work. If you have already chosen the builder, then you could just hand the documents over to him, and ask him to price them up. You may then want to negotiate the price down in your favour, but if your choice of builder is a foregone conclusion, there is little incentive for him to price competitively. Where something other than price is the main criteria, this may not be so much of an issue, however, more often than not, price is going to be major factor, and for this reason, it is generally recommended to tender the documents out to three or four contractors, in order to introduce the element of competition. If competitive tender is the chosen route, then you will need to find at least three of four suitable contractors, that are capable and willing to do the job, at a fair price. For residential work, typically you will be looking at the smaller contractor, you will want to get an idea of his availability, and whether your type of project is something he has had much experience with, and that the size of your project suits his organization.

- Choosing a builder

Many people rely on word of mouth recommendations, and this time honored method is amongst the best. In any event, you should enquire whether they belong to any trade organizations, such as the 'Federation of Master Builders', and check their membership with the relevant organization, this can frequently be done on-line. Ask whether you can visit recent examples of their work, both finished and under construction. It is always useful to see a site which is in progress, as a well organized, clean site, is an indication of a well organized builder.

- The Building contract

You should not agree to pay any money in advance, but might expect to pay stage payments, as the work progresses on site. You should also be very wary of builders offering to do work 'cash in hand'. While this practice is endemic in the industry, there will be little recourse in the event things go wrong, as you will have no legally binding contract at all, and your builder is clearly prepared to break the law. While it is likely that a contract will not be welcomed by some builders and may appear to increase the price, due to VAT, having a building contract in place, which clearly sets out the position of the parties, should bring peace of mind, and a firm legal framework for the resolution of any dispute, in addition, it is far more likely the building will be built in accordance with the prepared drawings.

Be aware that many disputes arise, as a result of misunderstandings over what the parties considered was included in the agreement. Be sure that everything is in writing and the obligations on both parties are clearly set out, before the contract is signed. The contract and associated documents, should fully describe all the work to be done, any conditions imposed upon the contractor, regarding access to the site, or other restrictions, the time period in which the work is to be carried out, the insurance provisions required, and the procedures to be adopted in the event of a dispute.

You could choose to write the contract yourself, but it is much easier to use a standard one, and much more likely to cover the eventualities that may occur. In addition, standard contracts are generally the result of long negotiations between the various concerned parties, and are constantly being modified as changes in the law, or its interpretation, dictate. As such, they are generally considered fair and equitable by the legal profession, so can be relied upon should you need to take your builder to court.

Contracts for construction work can be long and complicated; however, there are a number of shorter ones, that are suitable for a domestic scale projects, notably the JCT 05 home owners contract, which is written in plain English and comes in two version, one of which includes a consultancy agreement, in the event you appoint someone to oversee the work. You can buy a copy from one of the bookstores run by the RIBA or the RICS, or order on-line, unfortunately it is not available to download.

If the work you are undertaking is of substantial value, and you wish to maintain close control over the progress of the work, then you may wish to look into other contracts in the JCT series. Your consultant will advice as to which one is most appropriate in more complex situations, alternatively more information regarding the JCT range of contracts can be found on their website www.jctcontracts.com, and numerous guides are available.