Getting home improvement projects completed on time and to budget is no mean feat – even when the client is a lawyer. The key is having the right contract
“On time and on budget” – a construction litigator’s nightmare. We make our living, like others in the industry, from projects that go wrong – particularly those that overrun their time and their costs. However, in my last article (5 May, page 62), I explained how the first half of my home extension was progressing largely on time and to budget.
It is with some surprise (and delight) that I can now report that my works finished on the day they were supposed to (14 weeks after they had started) and, apart from a few client variations, with only a small claim from the builder for extras. The architect, too, came in at the agreed price. It leaves me to consider why my own dabble into construction has been such a relative success.
Undoubtedly, having a clear contract and specification and a fully designed project at the outset meant that the scope for argument with the builder was narrow. The risks were allocated in the contract and it was clear to all which risks were being assumed by whom. There was no room for that troublesome beast, design development. The only issue that arose concerned slightly deeper foundations than envisaged. In the end a compromise was reached that reflected the one possible ambiguity over the scope of the works in the contract.
For a client, a building contract is essential if costs and time are an important issue. This point of reference is vital. Without it, it can be impossible to decide whether something is to be provided by a builder or not, and even a small house extension can turn into a disaster . Without a contract and a time for completion, what incentive does the builder have to finish by a given date and not to prioritise other projects over your own? Liquidated damages are not supposed to be used as a deterrent, but that is what they do in practice. A builder that is free to propose the length of the contract and yet refuses to sign up to liquidated damages should be treated with suspicion.
From all parties’ point of view, having a professional and competent architect is advisable. Delays can be avoided, or at least mitigated, by having a professional involved from the outset who can advise as and when issues crop up. Without access to immediate design advice, the potential for delays and shoddy workmanship is increased.
Without a contract and a time for completion, what incentive does the builder have to finish by a given date and not to prioritise other projects over yours?
The importance of dialogue with the builder and the architect is not to be underestimated. Having almost daily site meetings (usually over a cup of tea and slice of toast), to discuss what was planned for the day and to answer and attend to issues that had arisen during the previous day, is not always practical but it was certainly a good way to keep the project moving forward with a minimum of delay. For a client, speaking with a single voice is also to be recommended – as I found, leaving my wife to convey instructions did not always produce the intended result.
Finally, and perhaps most importantly of all, researching the credentials and reputation of your proposed builder is perhaps the easiest and most essential step to take.
The temptation for any building project is to go with the cheapest and shortest option. We selected neither the builder that offered the cheapest price nor the one that offered the shortest contract period, yet we had no doubt that we had made the right choice, following extensive research into the treatment others had received at the hands of the tenderers.
For those currently considering embarking on a building project of their own, taking heed of one or more of the above tips ought to increase the chances of a successful project, on time and within budget, and lessen the risk of a trip to a construction litigator.
Nick Henchie is a partner in the construction department of Mayer, Brown, Rowe & Maw