When you reach an agreement with a building contractor for works on your property, it’s deemed as a contract, even if it’s just verbal and there’s nothing in writing.
For instance, you might engage someone to cut your hedge but you’re unlikely to put it in writing, even though you’ll have agreed the hedge in question, how much is to be taken off, when it will happen and how much you’ll pay them.
Employing someone to work on your home construction project is no different to this, in principle.
Of course, the scope of works is likely to be more complex, take longer, could involve arranging material supply and payment might need to be in phases.
Typically, you’ll approach trades by phone, text or email, leading to a meeting on site and quite possibly an exchange of documents.
You’ll define the work needed, when it will start, how long it will take to finish, any specific quality issues, how much it’s going to cost and when you are going to make payment.
Sometimes the above is agreed over several meetings and might have evolved from drawings, discussions on site, texts, emails and possibly a contractor’s quote.
Wise self builders will draw all these things together in a simple summary contract to try to eliminate ambiguity, record the agreement while it’s still fresh and ensure everyone has a document that can be referred back to in the event of a dispute further down the line.
Mike Hardwick answers: can a building contract save you money?
The overriding fear for anyone taking on a major domestic building project is the risk of the builder doing a poor job, overrunning by several months or continually asking for more money to complete the job. In the very worst cases it can be all three.
By entering into a watertight contract, there is very little wriggle room for the underperforming contractor. If what is being built simply doesn’t match the drawings, you can prove it. If you are running over, that will be clear from the target completion date agreed in the contract.
If more money is demanded, you have proof of the agreed price and drawing showing what was included, so unless the builder can justify additional money for work not originally covered by the contract, you can legitimately challenge their request. Of course, there will always be some ‘extra overs’ for unforeseen work, and your job is to keep these to a minimum.
If you have agreed hourly or daily rates for additional work within the contract, you can keep control of how much additional activity should cost, rather than being presented with an enormous and arbitrary bill at the end of the build with no way of challenging it.
The construction world is generally unregulated and full of disputes, so protect yourself against potential disappointment by having simple contracts to fall back on.
If you’re working with professionals, the most important document will be the detailed specification and schedule of works (SSW).
This presents the logical progression for the build, which takes the target contractor through the project from start to finish and welds together details on the drawings with other requirements not yet documented.
This is given to several contractors to price up the works, which allows you to decide which one is best.
The successful party is usually selected after another round of adjustments to the first quote, possibly to trim costs. But the audit trail is clear as to how an eventual price has been calculated and these documents are included within the contract paperwork.
Read more: How to Get Realistic Quotes from Builders
The building industry has a range of standard contracts available that are able to be used for engaging a single contractor. These often include a contract administrator to act as a
sort of referee.
More complex projects will almost certainly have this level of formality, if not more.
Many of the same principles can (and should) be used if you’re choosing to take on the role of project manager for your works.
If you break the build down you could have somewhere between 10 and 20 individual tradesmen appointments. In this case they are not sub-contractors because you are not a bonafide contractor.
From a health and safety point of view you will be positioning yourself as the Principal Contractor – note that if you’re not intending to live in the dwelling yourself then you may have tax obligations for HMRC.
From a contract angle you are engaging multiple trades, some of whom might be labour-only and others could be supplying materials.
Read more: How Much Should I Pay a Builder?
Start the process by putting as much detail together as you can about the work you want everyone to do in your own SSW. So if you’re tendering the carpentry, for instance, be specific about where their works should start and what’s included.
For instance, the roof structure may have been provided by a timber frame company, and the roof tiler will have allowed for felting and battening, but you want the carpenter to install the fascia, soffit and barge boards.
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Or if there is timber cladding to fit, you might want to state it will be delicately nailed by hammer with lost head nails rather than using the easier nail gun approach that can give a less appealing finish.
List such individual requirements in your chosen contract form – the easiest way is by including your SSW as a contract document.
In terms of getting the details of a building contract written up, you’ve really got three options:
The professional will prepare a set of documents for you. This is likely to be expensive and (in my view) probably unnecessary as there is standard contract paperwork available.
But having said that, you may feel more comfortable having some initial legal advice to help you source and complete a draft, as well as being clear about the process afterwards.
The FMB (Federation of Master Builders) is another source, although paperwork is usually only available to their members.
The Law Depot is free, but the Contract Store and JCT will probably charge £25-£40 for drafts. JCT paperwork can only be used once, whereas the Contract Store can be used multiple times.
These drafts might look a bit scary to certain contractors and you may find smaller firms don’t want anything so formal, but they actually benefit both parties, as they contain terms of conditions which go beyond the what, where and how much.
It’s possible to draw the paperwork together yourself in a summary appointment; ie your letter/email should recap the audit trail from initial architectural drawings, the SSW, the meeting(s), their quote(s) and any emails.
Ask them to acknowledge safe receipt and give their complete agreement to your summary.
Read more: Going Out to Tender
Read some of the standard building contract drafts so that you can see what they have included. But as a starting point, a robust building contract will typically cover the following details: