A good build contract – the basis for a successful project
Are you building your dream home or expanding your property portfolio? Building can be a stressful, expensive and daunting process for new and experienced owners and developers and whilst build contracts are not as exciting as choosing your Lulu Lytle wallpaper, a good build contract can form the basis of a successful project.
Your rights and obligations
A homeowner’s main objectives will be to build a home of high quality, within budget and on time. The aim of the build contract is to address these issues and clearly set out your and your builder’s expectations. However, a number of curveballs may arise that make achieving these objectives less straightforward.
Price
Although build costs are often stated to be a fixed price, this may not always be the case. Homeowners need to be aware of how and why costs may increase. The most common reason is when changes to plans are made. Homeowners should also be mindful that costs may increase due to a change to ‘provisional sums’. Provisional sums are a best guess for work that cannot be priced by the builder at the time of entering into the contract, for example, site works, services connections or not yet designed structural elements (a pergola where the homeowner has not yet decided on the size or materials).
Materials
Demand globally for construction materials continues to dramatically outstrip supply and shows little sign of slowing down. This inevitably increases costs. Whilst the build contract will not be a silver bullet to resolving this shortage, it can help homeowners understand the impact so that they can focus on managing those risks.
Delay
There are many reasons for late completion but what many homeowners do not appreciate are those less obvious costs that they will be responsible arising from a delay. These may include additional costs of hiring equipment, retaining labour and insurance. Our team can assist homeowners with identifying steps that can be taken to minimise these costs.