Extension - Contract?

DettaWalker

Hi,

We are in the tender stage of our extension. Our first choice builder, who is also our neighbours middle aged son (and we have a good relationship with them) is not keen on using a contract. He comes recommended from other neighbours in the street who have used him for their own extensions. He says all his work comes from recommendations and he's never needed a contract.

Would you or have you had an extension built without a contract?

Usually I would not consider this without a contract but he's recommended and visits his parents often next door. I can't see him messing us over.

FaceHead

How much money are we talking about? The level to which the job needs to be documented, for me, is proportionate to the size of the job. 

For a £x0,000 extension the minimum would be you writing down what he's going to do and what he's going to be paid, and getting him to look at it. And ideally sign it, but minimum of email which say - 'yes that is what the job is'. For me it's less about a "contract" and being all legal, and more making sure two decent people are understanding one another correctly.

He's going to build an extension as per plans, what about electrics, plumbing, decorating, dealing with building regs etc? What is the payment schedule? I would simply type up what the job is, and send it to him to make sure you are on the same page, rather than calling it your 'contract', even that that is what it is.   

twopenny

I think that's a good idea. Getting a definite answer to exactly what each of you expects and what will.happen. a time frame too.
By phrasing it with what you want doing and questions that will become relevant like payment, other tradesmen involved and time/dates you can do it casually but still have a written agreement with his name on it
Personally I never use neighbours. Son of a neighbours friend I had to 'sack' and a neighbour who didn't turn up, answer a call and got sniffy when I employed someone else.
If he doesn't reply to your email clearly and to the point you then have a logical reason to explain to your neighbours. It will still be your fault though.
But this is too big and expensive to take that sort of risk.

DettaWalker

So it's around £95,000. I have architect's drawings, engineering specs, planning permission and am just submitting to building control for a full application. So doing everything by the book really.
Got detailed designs for everything - including electrics, where switches will be etc, light fittings, what insulation to use, what u rating for windows... so it's all detailed. I guess if he formally agrees to that spec, with his quote and a timeline then that might be ok?

Aspiration

Hi DettaWalker,

I’ve done a complete refurb (circa £40k) and that worked quite well with no contract as we settled with the builder every couple of weeks and we’re good friends.

Looking at the size of your job, I would recommend using a contract and agree with other posters. Even if it is used to outline the expectations and agree what is and what isn’t in the contract is critical.

Sounds like an exciting project! Have you had any quotes online with your target price of £95k? 

Rosa_Damascena

DettaWalker said:

So it's around £95,000. I have architect's drawings, engineering specs, planning permission and am just submitting to building control for a full application. So 0doing everything by the book really.
Got detailed designs for everything - including electrics, where switches will be etc, light fittings, what insulation to use, what u rating for windows... so it's all detailed. I guess if he formally agrees to that spec, with his quote and a timeline then that might be ok?

Get a contract.

My builder didn't do contracts either until I drew one up for him. It's like this: he doesn't do paperwork, I don't do heavy lifting. It's a combination that works well.

Doozergirl

DettaWalker said:

So it's around £95,000. I have architect's drawings, engineering specs, planning permission and am just submitting to building control for a full application. So doing everything by the book really.
Got detailed designs for everything - including electrics, where switches will be etc, light fittings, what insulation to use, what u rating for windows... so it's all detailed. I guess if he formally agrees to that spec, with his quote and a timeline then that might be ok?

So all of those documents will already form most of your contract in terms of what the specification is.  

If he's part of the FMB then they do produce a free one for members to use.  

twopenny

Quite honestly I think you can use the excuse that you don't want to invest this much money without a contract and although you have heard great things about him you really want that etc etc.

Should get you out of a hole and relations with the neighbour intact - ish.

DettaWalker

Aspiration said:

Hi DettaWalker,

I’ve done a complete refurb (circa £40k) and that worked quite well with no contract as we settled with the builder every couple of weeks and we’re good friends.

Looking at the size of your job, I would recommend using a contract and agree with other posters. Even if it is used to outline the expectations and agree what is and what isn’t in the contract is critical.

Sounds like an exciting project! Have you had any quotes online with your target price of £95k? 

So I had a few estimates between 88-100k after site visits - and a ridiculous 140k + VAT. That was before I had building regs drawings off my planning application. So now builders are looking to firm up the estimates to a formal quote. 

I spoke to the builder in more detail about the issues he has with a contract. He's not doing everything himself, but works with electricians, plumbers and window / door fitters who would do these parts for him and I would pay them directly (he wants his business to stay below the VAT threshold and if he contracts everything through himself, he would be above it). (From what i heard from other people I do trust him that these people are reliable and do a good job), he's been doing this for over 20 years. He's asked them to come round to quote for their bit of the work, so I am about to meet them all. It feels a bit like I am self managing except he'll coordinate the site visits but I pay every trade directly including materials.

He also said he doesn't like contracts (my architect suggested the JCT one) as they put time pressure on builders with late clauses. He said if it rains heavily, he's not going to lay brick as that affects the quality of the brick laying and he may have to do damage repairs. And since we'd be starting in November, the weather will be hit and miss. And I guess since he's quite recommended he can pick and chose his work. Personally I don't mind working to a more relaxed schedule - yes it'll be a disruption to our living, but I've seen what happens when builders are pushed for time in our last house at the Cala development. 

He has said of course we'll write down what is being done, how much, and a schedule that are anchored on the building control drawings & plans (I'm doing a full application and everything is specified by my architect) - so that we both understand what is done, with what, by whom and how much for. He also said the building inspector will come round at stages and sign off accordingly and since we are doing stage payments he won't get paid until we pass inspection (except for materials, which I order through his account for the discount, but pay the supplier directly).

So I am starting to feel OK about this - I do have other bids as well, one with a project manager so am waiting for his quote to come through as well, but the risk there is that I don't know the trades he uses whereas the builder I see regularly as he sees his parents in the house next door and I have people on the road being very positive about his work (he did not ask for a reference, I ran into one of his customers who volunteered the information on a single storey extension). 

DettaWalker

Doozergirl said:

DettaWalker said:

So it's around £95,000. I have architect's drawings, engineering specs, planning permission and am just submitting to building control for a full application. So doing everything by the book really.
Got detailed designs for everything - including electrics, where switches will be etc, light fittings, what insulation to use, what u rating for windows... so it's all detailed. I guess if he formally agrees to that spec, with his quote and a timeline then that might be ok?

So all of those documents will already form most of your contract in terms of what the specification is.  

If he's part of the FMB then they do produce a free one for members to use.  

Yes - I am coming round to that thinking as well. I don't want to put penalty clauses in for late delivery, I am OK with a more relaxed schedule as I don't think people do their best work under time pressure and especially with putting the shell up, there are external factors that can delay a build. With stage payments that should be protected as well and I am purchasing the materials so they are legally mine as well. I will take out self-build insurance and liability insurance and I will probably cough up for a 10 year structural warranty insurance. So not sure what other risk there is.

Doozergirl

Right, so you're not going to get one contract because you have multiple contracts!  

Every person you pay is a separate contract.   Any problem you have, the person you pay is directly responsible. 

He stays under the VAT threshold, he also avoids taking responsibility for anything other than that which he gets paid for.  

You pay for materials, they are your responsibility.  If someone damages something, they are not easily responsible for the product.  With a main contractor, they are responsible for the lot.    The risk is theirs.  

Be clear from the beginning.  The money you are saving here, if you are saving, is an insurance policy.  When stuff goes wrong, those savings pay for it.   If he is the same price as others who are VAT registered and cover the whole project, then you are actually paying him extra.  

One payment system to one specified contractor even without a piece of paper entitled 'contract' is a lot clearer than multiple non written contracts and materials bills.  

For someone who was worried about not having one contract, you're becoming pretty relaxed about not having many...  You need to be saving some money here or it's almost pointless, apart from the feedback being genuine and good.