What Do You Need to Know Before Signing a Building Contract?

A building contract is a legally binding document and its purpose is to protect your assets and interests. Keep in mind that regardless of building new construction or expanding your building, this is probably a major investment. Furthermore, if you’re constructing a family home or renovating one, chances are that you’ll put your entire quality of life on the line. A missed deadline or a mistake during this project can cause a major problem. Here are several considerations you need to make before signing a building contract in order to avoid all of this.

1. Start with the basics

When it comes to making a building contract, the first step is to establish the basics. However, what is the basic of a building contract? Well, there are several items that need to be on this list:

• Personal information of the contractor

• The building license number of the contractor

• The date of the contract

• A detailed description of the work

• Fixed price or agreed upon fee

If the exact price cannot be specified, you need to explain why this is the case. Keep in mind that while some factors in this field are volatile, the above-listed should be specified as soon as possible. This is the only way to make the contract in question reliable.

This is important for home improvements, as well, not just new constructions.

2. The devil in the details

Depending on the nature of the construction, you need to specify the details of the project. First, there’s a difference between building new construction and simply making a home extension. Technically, however, both of these things require a building contract.

Now, sometimes you want the works to look exactly the way you’ve envisioned them. So, the rules need to be set from the very start. Keep in mind that the contractor has the right to argue against or refuse to sign the contract if they believe it contains something unreasonable. This can be altered and amended before signing.

Proper communication is important but you need to understand two things. If there’s any ambiguity in the wording of the contract, the court is bound to rule in favor of the party that didn’t compose it. This is why it’s so important that you work with seasoned legal experts while making it. Also, try working with reputable home builders in order to avoid dealing with people who hunt for these ambiguities.

3. Look for a contractor with all the insurances

There’s so much that can go wrong during the construction project and the insurances usually depend on the contractor. The problem is that these insurances vary by state. Also, some construction companies get insurance packages, some of which don’t contain all you need.

While this is not something that you are supposed to be knowledgeable of, omitting this while examining the contract can be a major problem. This is one more reason why you want someone experienced in the field to examine the contract in your stead.

Keep in mind that you want to get insured in a case where the contractor decides to just quit in the middle of the project. Unbelievable as it may sound, this was known to happen. With the right warranty, you will be protected from the financial consequences of such occurrences.

4. Complying with regulations

Now, the last thing you want is to believe that just because they are licensed and have a positive track record, that they’ll do everything by the book every single time. This needs to be verified and ensured through the contract. First of all, you want to have relevant statutory warranties. Second, you need to ensure that they comply with the building code.

Naturally, there are some situations in which your requests will make compliance impossible. Regardless of other circumstances, this needs to be stated in the contract. Also, the reason why compliance is impossible in this particular situation needs to be explained (in detail).

5. Completion date

This is one of the most complex issues there are. Namely, the completion date or the deadline is often hard to give, seeing as how the weather or other unforeseen circumstances may change. Rushing to meet an unrealistic deadline can result in workplace injuries and worse. Therefore, there are several things you need to know before signing a building contract.

First of all, the contractor can start with an assumption that there will be delays and missed days. This will make them set a deadline a bit further. Also, the ability to do a specific amount of work in a day often depends on the number of people on the site. A contractor who is behind on the schedule can temporarily bring in people from the other site or get more workers for the time being.

In other words, while unreliable, the completion of the project is not impossible to predict, therefore, you can feel free to insist on it.

In conclusion

In the end, you need to examine the contract and have a professional take a look at it. Keep in mind that even though this is a document that needs to follow a certain bureaucratic format, you can never go into too much detail. Remember, if there’s something you want the contract to say, just make sure to put it in. Now, if there’s a reason why this cannot be fulfilled or legally binding, there’s someone who will point it out. Whenever dealing with contracts, make sure that you have some professional help.

Guest Contributor: Gabriel Hill