14. The Building Contract
You need a Building Contract
Nearly all the things that go wrong on TV self-build shows include inadequate or no Building Contracts.
A Building Contract is between you and the Main Contractor. It says that the Contractor will build your house as described in the Contract Documents. In return you will pay him an agreed some of money. If one side fails to live up to his part of the contract, there’s a ‘breach’ of contract.
(If you are managing the project yourself, there should be a series of contracts between you and the ‘trades’ / ‘sub-contractors’ contributing to the construction process.)
The Building Contract will include full details of the costs and provision of labour, materials and services as well as plans, specifications, drawings, a schedule for completion, and any changes which have been agreed. The construction work including the cost and time-scale must comply with the contract.
If the Main Contractor offers you a contract, make sure you get it looked over by your solicitor.
There are a number of Building Contracts commercially available and you can always have a solicitor draw up your own. The most appropriate contacts available are published by the RIBA and the JCT. They have been tailor-made for small buildings and are written in language most of us will understand.
Take advice from your architect about which contract will be best suited to your project
- We would recommend the Domestic Building Contract published by the Royal Institute of British Architects (RIBA).
- The contract is endorsed by the Home Owners Alliance
- It includes guidance notes to help complete the contract
- For the Green Self-Builder, you can, if you want to, name a supplier or sub-contractor who you would like to work with the Main Contractor. This helps get the systems and products you prefer into the building
- It provides for a way of managing any defects identified after completion
- It allows for different payment options
- The contract is divided up into three parts: the Agreement, the Contract Details and the Contract Conditions.
- The contract should be administered (see below) by an architect or contract administrator (somebody who’s not an architect but is preferably qualified to do the job). Although recommended to be used with an architect, the contract can be adapted to be used where you are the contract administrator / project manager yourself.
- Another excellent contract is the Minor Works Building Contract published by the Joint Contract Tribunal (JCT)
- The MW Contract is more suitable for non-complex projects, which might preclude building systems other than traditional ones
- JCT contracts for all types and sizes of buildings in one form or another are used throughout the construction industry and have an excellent pedigree
- The MW Contract has been developed over many years
- Unlike the RIBA contract, the MW Contract doesn’t allow you to name suppliers or sub-contractors
- The documents provided by you to the Main Contractor as part of the contract are known as the ‘Contract Documents’
- The Contract Documents are made up of all the information the Main Contractor will need to build your house. They will likely include drawings, specifications and a schedule of works - although other documents and information might also be included
- This Contract Document package will be the basis upon which, first, the Contractor will cost for his Tender (see ‘Building Costs and Control’ below) or Negotiation (if the Tender process is omitted) and then subsequently form the basis of the Contract itself
- These documents are clearly identified/listed within the Contract you sign with the Main Contractor
- After the Contract has been signed, any changes you make to the Contract Documents will be subject to provisions set out in the Contract itself
- Changes, or ‘Variations’ to the design when the building work is underway is very expensive - so try and ensure that everything you want is included in the original Contract. Be aware that Variations are sometimes the way that cynical builders of all size of company rely on to make a profit
- When the Architect has completed the Contract Documents and the Contract has been signed by you and the Main Contractor, the Architect takes on a different role as the Contract Administrator (CA)
- Although still paid by you the client, the Architect becomes a third party to administer the Contract impartially between you and the Main Contractor
- Contract Administration is the process of ensuring that the Contract proceeds according to its content: The Main Contractor builds the house following the plans and other Contract Documents; and you as the client fulfil your obligations to pay the Main Contractor at pre-arranged stages of the Contract. If either party strays from the Contract, the Architect will have the means provided the contract to adjudicate and issue instructions accordingl
- Payments by you to the Main Contractor are made by first the Architect issuing a Certificate (see ‘Certificates issued under a Building Contract’ below) to authorise payment for work up to the pre-arranged stage (it could be completion of the foundations or perhaps, the walls or roof)
- The Architect will carry out periodic site visits to monitor the progress of the works
- The Architect will make a professional judgment regarding the required frequency of these visits
- The day-to-day supervision of the build itself will be the responsibility of the Main Contractor, who is also responsible for ensuring that the structure is built in compliance with the Building Contract, the Planning Permission, Building Regulations and Health and Safety requirements
- Though not all of them will necessarily be used in your project, the most common types of Architect’s Certicate are:
- The Interim Certificate confirms that work has been carried out to the architect’s satisfaction, as determined by visual inspection. These certificates will be used as authorisation for the next tranche of payment for the works’
- The Practical Completion Certificate transfers possession of the building to the client, and the Making Good Defects Certificate trigger the release of the Retention (that bit of money retained until the contractor has satisfactorily sorted out any defects in the works)
- The Final Completion Certificate will only be issued when the architect is satisfied that there has been full compliance with the contract.
- You might well be using the services of other Professional Design Consultants such as a Structural Engineer or Mechanical and Services (M&E) Engineer
- Those Consultants contributing to the Design and Specification of the Building e.g. structural design or design of the heating and ventilation system can provide Certificates associated with work on the building. Certificates are often asked for by mortgage companies where the Contractor is not providing an NHBC or other warranty