Building Contracts for your project

[tlogic]

Hi, 

 

 

I'm doing some research into building contracts for small scale projects (single new build home, domestic extensions, conversions,refurbishment) 

and was wondering if you had to employ a builder for your self build project would you have a contract in place with them, if so who will put one together for you?  

[Bozza]

For any significant work especially a big extension or a new home I would never consider not having a written contract, or something in writing.

[Gus Potter]

tlogic.. Have you an academic interest in this?  I think you have touched on a really good point. This is a very expansive subject! If you wish, can you outline  what sort of information you are looking for?

 

 

[nod]

Definitely something in writing 

Your builder should give you a very detailed quote saying what is included within the price 

You will need to add payment terms and timescale and also rates of pay for any extras 

[Bored Shopper]

The thing is, even if the contract is in place, nothing prevents your builders botch the project and disappear into thin air, leaving you with unfinished carcass, a nicely done contract and tons of weekly minutes, and a fortune to pay in legal fees trying to prosecute them for this  

[the_r_sole]

You want a standard form of contract, if you're using an architect or a qs as a contract administrator then they would help you chose the appropriate contract, and if you're just going direct to contractor there are other standard contracts available.

No one should be writing their own contract or entering verbal contracts in this day and age, I would say that a detailed set of contract information and a formal contract are even more important if you're operating in England 

[tlogic]

10 hours ago, Gus Potter said:

tlogic.. Have you an academic interest in this?  I think you have touched on a really good point. This is a very expansive subject! If you wish, can you outline  what sort of information you are looking for?

 

 

Hi Gus, 

 

I do have a general interest in this subject because I want to get a feel for how many homeowners/selfbuilders  use contracts on their projects to protect themselves and how people go about it. 

 

I'm a Quantity Surveyor by profession who works for a Tier 1 main contractor and one of my duties is to put together detailed  contracts for subcontractors which is job specific and not just a form filling exercise to ensure the entire scope of works  is captured and eliminate any unforeseen costs. 

 

I read stories everyday from people shelling out ££££s of pounds on renovations and extensions only to end in disaster  for the following reasons: 

 

a) Employing a Cowboy Builder - 

 

Most likely cause :

 

Not carrying out due diligence on a builder 

 

b) Builder going bust - 

 

Most Likely Cause:

 

Not carrying out thorougher financial checks 

 

c) Project exceeding budget -

 

Most Likely Cause: 

 

Scope gaps in contract, design development, no contract in place

 

Their are measure people can take which mitigates all these risks so I was thinking of creating  an affordable 

online service where I can try and help people with no experience with how the construction industry operates by drafting up detailed contracts on their behalf including vetting builders to ensure they have the skills and financial stability to carry out the works at hand. I do this day in day out at  and it does work so I was thinking of creating similar service to consumers via online platform which is affordable. 

 

 If  people are spending ££££s of pounds on a project wouldn't they want some sort of peace  of mind the builder they are about to appoint is capable of carrying out the works and will not scarper into the sunset half way through a project. 

 

I know their are many free contracts available online but most of the free versions I've read are either out of date, doesn't have enough room to capture the entire scope of works or written in legal jargon which is difficult to understand and us a Surveyor I also find it difficult to understand some of the legal terms.  

 

I haven't actually seen a contract written by an architect but would love to know the following as I always thought architects are good at designing buildings and giving professional advice. 

 

A)The contract produced by architects are they detailed enough or is it simply just a form filling exercise for them? 

 

b)Do they liaise with the builder on your behalf when drafting a contract for you?

 

c)Apart from drawings,specifications & reports are their any other documents  they incorporate into the contract or do they simply just fill out the blanks in a  contract? 

 

d) Do they include marked up drawings and  a detailed scope of works document to ensure everything is captured?

 

e) Have you experienced issues with contracts drafted by an Architect? 

 

I know some builders will shy away from a project when it comes to contracts but then at least the client is fully aware of the risks they are taking if they still decide to go ahead with someone. 

 

Obviously if you are building a house for example I hope people will have a professional team on board such as Architects QS,engineers etc, who will ensure you have house built to the required standards and someone that manages the budget for you I.E QS. 

 

I want to try offer my services to homeowners, or self builders who are employing individual trades for their projects. I'm not promoting a business but just toying with the idea and want to find out if their is an interest for such service. 

 

If people need any commercial advice on  a project please get in touch and I will be more then happy to answer any questions.  

 

 

 

[the_r_sole]

Architects do not write or produce building contracts, that level of legal involvement isn't part of the job - even people I know who are expert witnesses in contract law don't write their own contracts for clients, surely a QS knows this?!

[Bozza]

Prior to my current project I was considering a more complex project involving a steading conversion.  In trying to price the project my architect told me that the problem with Quantity Surveyors is that to protect themselves from litigation from the clients, if the project goes over budget, they over estimate all build costs.  Not sure if that’s true but that’s what I was told.

 

In terms of self build projects I may be wrong here but I don’t see many people on this forum embarking on a literal self build (as opposed to fixed price turn key type builds / main contractors), whereby they are totally clueless on costing etc.  Seems to me that the majority of literal self builders have relevant experience or actively research costs including via this forum.

I suppose your proposed business would be targeting those Self builders without any knowledge or savvy but also without a contract nor an architect, or project manager.  And presumably in your locality.  Not sure if there would be many of them, and if there were good luck working with them.  I think that most self builders have spent years thinking about self building, watching tv shows, doing their research etc etc.  
 

Funnily enough just earlier today I was in conversation with someone at the very start of their self build journey.  It was pretty easy for me to give them a decent steer on expected costings and risks.  And that’s based upon what I’ve learned on this forum and through my own self build journey.  
 

Maybes there is scope to act a a self build consultant in some way though.  Would be just a case of advertising what you can offer and see if there is any interest.  In the same respects people offer VAT reclaim services.  A stand at one of the self build shows might be a good shout.  Would suggest though doing a fixed price service so pricing it transparent.  Eg for £x I’ll check your build contracts, check your budget spreadsheet that sort of thing just to make sure you’re not getting ripped off etc.
 

In fact now I’ve said that I’ve just thought about a business opportunity for myself.

 

 

Edited September 3, 2020 by Bozza

[jamieled]

I work in engineering, occasionally with a QS. I've also recently almost finished building my house. There may be scope for the service you provide, but I'd second the comments above.

 

In my opinion, there is a big difference between commercial development (i.e. housebuilding or industrial) and self-build on many aspects, from the size of the contracting companies used, the approach to cost management, detailing of the final development and  knowledge of the client. I didn't use a QS and the closest I had to a contract were a couple of accepted quotes with no T&C's. I think the approach to managing construction in industry is vastly different to a large number of self builds, to the extent that in many cases I don't believe applying an approach of developing detailed costs, QS estimates and watertight contracts would work for most self-builders.

 

One interesting aspect to understand would be what proportion of self-builds are those where the self-builder hands over responsibility to one or more parties for the build. That's your market, so answer that question and you might begin to understand how viable a business is.

 

 

[nod]

Most problems happen because of misunderstandings about what is included in a quote 

 

[Gus Potter]

Great comments everyone, the breadth and depth of knowledge is remarkable on this site. What a resource.

 

Turning back to T-logic's post and focusing on say small extensions, slapping holes in walls to form more open plan areas and so on, say jobs with a builder cost from £5K to £40K.

 

Due diligence. Sadly I see about one job a month where had a bit of actual due diligence actually been carried out rather than just looking on Facebook (I'm not talking Columbo here) the customer/ client could have saved themselves a lot of grief. It's old fashioned but what about looking at some of the magazine sites (Which magazine for example).. they tell you what to do in terms diligence.. or you can look on this site. The next step could be Companies house.. for say a director check, maybe the council online records for enforcement notices, the HSE etc. Then take references and actually follow them up. Make sure it's not a best mate, wife that is giving the reference..and yes I have seen this! If you get a sniff that something is not right then resort to credit referencing if you must, but if you get a bad smell at this point then really keep looking elsewhere.

 

The Sole is bang on with his comment. There are standard contacts available (for example the JCT suite of contracts) that are crafted by legal experts, some of these terms are based on case law. A designer always thinks twice and three times before ammending the standard terms, for a reason, so it's not a case of form filling..it's serious stuff!

 

As a word of encouragement. I would say that in 90% of the 5 - 40K jobs I deal with the Client only employs the designer up to the warrant (BC stage etc). Often they do have / sign a contract.. but it's the builders own contract and the t&c's are unfair. There is some extra protection for domestic clients (Scots Law, can anyone expand) but this only kicks in once thing have gone wrong and there are a few other finicky bits.

 

In most cases on small jobs the reality is this. The Client can't afford to spend the extra on professional supervision and preparation of a fully comprehensive design / tender package/ management and contract supervision.. Also, they often visit sites such as "bob the builder.com" and don't appreciate the value of independant advice as these site have a commercial interest.. the police policing themselves and so on.

 

Possibly one key is to recognise that one purpose of self building is to save money, or to use the money you have to get something that you otherwise could not afford. To achieve this you need to put in the work and do your research. There is no free lunch but your time is often free.

 

T-logic. I do think you have picked up on some good points that could be commercially viable. However, before you loose your shirt, perhaps consider seeing if you can develop a buisiness locally. Build your network of local builders, access the merchants and get to know the sales staff. Work on your Client base, provide a great service, deliver real savings and build a reputation for good work. People will start to seek you out!

 

Can I suggest you start with the small jobs. Actually, these are often harder to do than a house but you can cut your teeth and learn. Make sure you get some PI insurance and some PL insurance in case you run over someone on the site say.

 

I work with a number of local builders who have a self employed QS. A good few of them have worked with the same QS for years. They trust them to price right, too high and the builder has no work! The Qs's they use make a good living and have a good quality of life in the main.

 

It's all to play for so I wish you all the best T-logic.

 

 

 

 

 

 

 

 

 

[Ferdinand]

I think one issue not mentioned enough so far on the thread is Marketing Communications; it is a bugbear for people offering professional services to self-builders is finding the self-builders, and helping them find you.

 

Routes to market are often informal, and you need to know where your customers will come from.

 

On the project aspects, perhaps the experience of the client is - as said above - a key factor.

 

For me I have a formal contract if it is being managed through a third party, and I would need to trust their own management arrangements. For example, this summer I have had a student house go through its 5-7 yearly makeover / market positioning refurb (nothing structural) in the 15-20k ballpark managed by the (very professional) lettings agent. They have contract paperwork, and I have a normal Letting Agent agreement with them.

 

If I have a refurb or work (say in the 2k-20k range) done myself I would not normally have a formally written formal contract,  but may have a well written letter of requirements plus a signed copy from the contractor, or it could just be on written or verbal instructions and trust, or a written quote based on whatever their terms are and being reasonable. It would be hands on management with visits at least daily.

 

Resolving any issues by agreement and conversation would be the norm, but I would be working with either regular tradesmen, or those who have been recommended.

 

But then the individual elements would be considerably less than 20k. The biggest would be just a few thousand eg a rewire or a cental heating or a roof.

Ferdinand

 

 

 

Edited September 5, 2020 by Ferdinand

[tlogic]

Hi All,

 

Wow some fantastic replies here ?, some of the ideas  suggested on this thread is fantastic and has got me thinking ?'.

I agree  that  the hardest thing  for me will be to try and drum up interest in such a business. 

 

Thank you for the detailed responses much appreciated. 

 

oh lastly, my last post regarding architects and  them writing contracts, i'm fully aware they will not write the contract themselves but will fill out a standard JCT contract or RIBA contract. 

 

I would also fill out a JCT contract (whilst ensuring the correct contract is selected, based on the complicity and value of the works)  but will incorporate a set of numbered documents into my contract  to eliminate risks such as: 

 

a) General overview of the scope of works
b) Amplification of extent of design Responsibility
c) Responsibility of Statutory approvals
d) List of free issue materials by the client
e) Amplification of a particular section of the works where the design is lacking detail
f) details of any Interfaces with other trades employed by the client/owner
g) Access details for carrying out the works
h) General House keeping arrangements whilst works are being undertaken
i) Delivery/parking/congestion charge arrangements and responsibility
j) general protection requirements
k) responsibility of Making good areas outside of the scope but affected by the works

2. Detailed Attendance Matrix - (Checklist of all items expected to be provided by the builder & client)

3. Drawing register which lists out all the drawings and specification

4. Trade specific check list to ensure high quality finish by the builder.

5. Marked up design drawings especially where trades are employed direct by the client.

 

etc etc. 

?

 

Thanks again. 

[PeterW]

4 minutes ago, tlogic said:

 

I agree  that  the hardest thing  for me will be to try and drum up interest in such a business. 

 

I have to say I’m struggling to see what service you are offering here ..?

 

If you are not a solicitor / lawyer then writing contracts for services will be a challenge and you will struggle to get any sort of PI Insurance without the backing qualifications. 
 

If you are planning on being a project manager then there are plenty out there and I’m trying to understand the value add ..?

 

The RIBA contracts are limited to members only, and the JCT contracts are written in such a way they shouldn’t be amended as otherwise they can be rendered void, so it’s a limited market when it comes to the standard contracts. 

 

[the_r_sole]

The list of "additions" you've stated there are included in a most contracts or at least should be, it sounds like you're trying to duplicate the information that should be given out as part of a tender pack and agreed in the contract?

[tlogic]

2 hours ago, the_r_sole said:

The list of "additions" you've stated there are included in a most contracts or at least should be, it sounds like you're trying to duplicate the information that should be given out as part of a tender pack and agreed in the contract?

Unfortunately some of them are some of them are not. The trouble with the standard  JCT contracts and others , there isn't much room to

amplify the scope in details . At best you might get 4 or 5 lines to describe your works that's why these contracts have room to add in numbered documents to 

amplify the works in a lot more detail. 

 

[Dan F]

We plan to use RIBA domestic contract.  It's simpler than the JCT contracts and doesn't require a contract administrator if you don't want to use one I beleive.  Even the simplest JCT contract seems over the top. See:  https://www.architecture.com/knowledge-and-resources/resources-landing-page/riba-domestic-building-contract

 

You can see a sample here:  https://parsefiles.back4app.com/vy3GQS8Kt0HZRRnFkyglGgQUysHXN5BXjYUpP5vC/e6b45cf06053fef08fe35411d5bff7e0_bdom2.pdf

 

In our view using a existing contract model ensure we cover everything important.  The concern being that if we put something together ourselves then there is a risk of us missing out key things that could be an isse later.  So, for the £30 the contract costs, it was a no brainer in our opinion.

Edited September 8, 2020 by Dan F

[JonJump]

Been reviewing this stuff for a couple of weeks.

 

+1 for RIBA domestic

 

I have used JCT Intermediate for a partial demo/ big refurb before.   It was fine, but a pain because it was really designed for commercial work, so it was probably over the top.

 

Looked at the Home Owner JCT stuff but am unconvinced - looks a bit noddy.

 

RIBA Domestic looks like the sweet spot, for me at least.  Big thanks to @Dan F for the pointer.

 

Also - I looked at the survey results and CANNOT BELIEVE how many people are undertaking big projects either with no contract, or the contractor's.   I would not do that for any amount of money greater than I would happily lose on a horse.