A Construction Lawyer’s Tips for Hiring a Builder: Paul Brampton Featured in The Times
Whether it is carrying out home renovations, building an extension or excavating a basement, homeowners often appoint builders based on brief estimates. While works may start without a hiccup, the lack of a proper contract can be a mistake that leads to costly legal disputes.
Here’s how to reduce the risks when appointing a builder.
What do you want?
The more detailed the specification, the better. Is the builder responsible for design, or has an architect, structural engineer or other consultant been appointed? If the latter, the specification should list the drawings and designs that are to be followed. Is a particular material to be supplied and installed, or is the builder required to provide samples of materials for approval? Clarify these points to save pain later.
Choosing a builder
To reduce the risk of appointing a “cowboy builder”, do your research. Does the builder have the wherewithal to carry out the works? Will they let you look at their previous projects so you can see the quality of the finishes? Recommendations from others are helpful, but are no guarantee.
Drawing up a contract
There are a number of off-the-shelf building contracts available to homeowners — prepared by the Joint Contracts Tribunal or the Federation of Master Builders, for example — which can be tailored with the help of a solicitor. The benefit of having a proper contract cannot be overestimated — it provides homeowners with protection and helps to focus minds on the parties’ obligations. Make sure these key agreed terms are recorded in writing:
- a clear description of the work to be carried out, with reference to the specification and any drawings;
- price (and whether it is fixed or an estimate) and payment terms. Be aware that it is common for 95 per cent of the agreed price to be paid on or by completion, with the balance payable after the builder has put right any defects. The more extensive the works, the longer the rectification period should be;
- stipulate the time frame for carrying out the works, and the circumstances in which that period can be extended. The amount of damages to be paid by the builder per week for a delay could also be agreed upfront;
- it is also worth including that you expect the builder to carry out the works competently, and supply materials of a quality suitable for their intended purpose (and to provide guarantees for products installed). You will need to check that the builder has an all-risks insurance policy covering the works, and a public-liability insurance policy for death or injury to people, or damage to property. If the builder or any of the subcontractors is responsible for design, ensure that there is also professional indemnity insurance; and
- finally, set out the circumstances in which the contract can be brought to an end. Ending a contract is fraught and it is much simpler to rely on agreed terms when doing so.
Time to cool off
Once a contract has been agreed, the homeowner generally has a cooling-off period (if the contract was agreed and signed by the parties at the homeowner’s property). Works should not start until after this.
Once works begin, keep a record of everything that is done and when. In the unfortunate event of a dispute, these records will be vital.
The key to a successful project is both parties having a clear understanding of each other’s obligations, and the simplest way to achieve this from the outset (reducing the risk of disagreement later) is to have a proper contract in place.
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