A building contract is a contract detailing the terms and conditions between an owner of a land and a building contractor. The contract covers the basis of remuneration, timescale, penalties, consequences in case of breach of contract, and so on. The contractor can make contracts with other individual trades which will be known as sub-contractors.
Below is a list of the top 7 things that you should know before going into a building contract.
Start of the Contract
The contract starts on the day that the builder starts construction. The construction should be done within 20 days of obtaining the construction certificate.
Termination of the Contract
Usually, most contracts have a time frame which the builder must respect and finish his job. Some contracts may also allow the builder to extend his work in case the latter did not complete due to weather conditions, shut down periods, and more. But it’s rather difficult to get out of a building contract once both parties have agreed upon the terms and conditions.
Duration of the Contract
The time frame varies from contract to contract and the amount of work that needs to be done. The duration of the contract is also based on the agreement made between the owner of the land and the builder.
Remuneration of the Work
It is important that both parties agree on a price prior to signing the contract. The builder should know how much he is getting and what other variable prices he will be incurred for. Bonuses must also be mentioned clearly in the contract along with the fixed price.
Variation of the Contract
Yes, it is possible to change some aspects of the building contract, although it might cost the builder. It is thus better to ensure that all the terms and conditions are clearly negotiated prior and stipulated in the contract.
End of the Work
Once the construction is over, the builder will issue a certificate of practical completion and an invoice to the owner. This is not necessary but some banks require these documents sometimes.
Documents for the Contract
The building contract should contain a tender, building specifications, owner’s warranty, building plans, engineering plans, special conditions and the building contract itself.
These are some important aspects you should consider when going into a building contract. An experienced attorney will be best suited to guide both parties in the contract. Click here to learn more about building contracts.