Signing a contract with a builder

The Blonde One

Hi All,

I have searched the forum for these questions, but can't really find an answer (probably because they're stupid questions!).
We are about to commence a major renovation of an older property and our engineer has recommended signing a contract with the builder. I was wondering what happens if we are able to source some things for cheaper, but we have signed on an agreed sum in the contract. For example, the builder has included a PC sum for windows, but we are probably going to source them ourselves. Should we remove that cost now, or does it matter? I feel like I'm not explaining this very well! Can builds come in for less than the agreed sum, when a contract has been signed, or does the fact that we have a signed agreement in place mean we have to pay the builder that amount, even if we manage to source things for cheaper throughout the build?

Peregrinus

If you're going to source the windows yourself, don't sign a contract under which the builder will source them, or include a clause that says that, if you can source windows at less than the contract price, the builder must use those windows and charge you only the lower price. (Note that the builder may be reluctant to agree to this, or may demand the inclusion a clause that says that he is not responsible for quality problems/defects associated with the use of windows that you have directed him to use - once you start negotiating the terms of the contract things can get messy.)

The bottom line is that, once you sign the contract, you are bound by it unless the other party agrees to a variation. So don't sign a contract which provides for the project to be carried out in a way which is not, in fact, the way you want or intend it to be carried out.

The Blonde One

Many thanks for your reply Peregrinus. Now I am thinking that maybe we shouldn't sign a contract. I can see why no one else I have asked has signed one, if it removes all wiggle room on costs. Much to think about.

The Blonde One

The Blonde One wrote: »

Many thanks for your reply Peregrinus. Now I am thinking that maybe we shouldn't sign a contract. I can see why no one else I have asked has signed one, if it removes all wiggle room on costs. Much to think about.

Just bare in mind, not having a contract for agreed price is a double edged sword, you may find during the build that the builder may wish to renegotiate some items which may take longer/cost more than anticipated. Also, if the builder supplies all materials, they are responsible for them, if you buy the windows yourself, they are your babies, if they don’t fit, have to go back etc and delay the build, you pay.

Peregrinus

If you don't sign a contract with the builder, you'll have an oral contract with the builder - just as binding, but with less certainyy as to exactly what has been agreed. In so far as it leaves any wiggle room on costs that cuts both ways - you may think that the agreed price covers things that, it turns out, the builder does not think it covers.

A written contract is better, because there is greater clarity about what, exactly, each party wants/expects, and less likely that they will disgree about the terms on which the build is to proceed. But you do want a written contract which reflects the project you want to execute.

sydthebeat

A PC sum by definition allows the client to select the item.

If the cost is over the PC sum, the client pays the difference, if its under the PC sum the client gets the savings.

Ensure all costs of install, delivery etc are either separate from the PC sum, or there an agreed figure independent of the product selection

Suckler

The Blonde One wrote: »

Now I am thinking that maybe we shouldn't sign a contract. I can see why no one else I have asked has signed one..

You're asking the wrong people.

TheBoyConor

This is what drives me mad about house builds. Owners making it up as they go along, awarding a contract and commencing construction and not having decided on fairly significant things like the windows and chopping and changing their minds about things half way through the job and then throwing a hissy fit when there are claims.

Even if you set the contract up in a way that you supply the windows and the contractor prices just for the fitting, you still run a chance that the contractor will lob in a claim when you deliver the windows because "oh we didn't think the windows would be like this, we only priced for fitting bog standard PVC windows, this will cost extra because it takes longer to fit or is more complicated because of X,Y,Z reason".

A lot of contractors lob in claims for every little thing, even seemingly trival items, that isn't as exactly said in the contract. It can be a significant amount by the end of the job. Then at the end there is a period of horse trading over it all and there is an agreement to pay over some part of the overall amount of the claims.

The Blonde One

TheBoyConor wrote: »

This is what drives me mad about house builds. Owners making it up as they go along, awarding a contract and commencing construction and not having decided on fairly significant things like the windows and chopping and changing their minds about things half way through the job and then throwing a hissy fit when there are claims.

It's not that we're making it up as we go along, it's that we are about to commence and I want to have things decided upon in a timely fashion so there are no delays on our side. Turns out our windows are not your standard uPVC and will need to be aluminium (we did not know this at the design stage) and now they are going to be far more expensive that we had originally thought (alot greater than any costing provided to us by a builder). So we need to do some serious research now. But many thanks for your reply!

TheBoyConor

I didn't mean that you were, i was just saying that it often happens with one off house clients. Sorry if I wasn't clear.

Anyway as others said, if the cost of the windows is different than the PC then you pay or get back the difference.

However, deciding on things after the contract is awarded you run the risk of the contractor coming back with a claim anyway along the lines of things like "oh I see these windows need more fixings or different fixings, or are otherwise more costly or time consuming to install than what we priced for" and wanting to charge extra for that. Expecially likely if the contractor priced the job very keenly in order to get the job and then wants to claw some if it back by making claims for anything and everything. Sometimes claims are for completely off the wall stuff and everyone knows that but still everyone knows that it is all just a charade and a prelude to the horse trading to agree an amount at the end of the contract.

The Blonde One

TheBoyConor wrote: »

I didn't mean that you were, i was just saying that it often happens with one off house clients. Sorry if I wasn't clear.

No worries. Tone does not translate well on t'internet!

Thanks to everyone for the responses. From all your replies, it would be foolish not to have a contract in place, so that's what we will do. Thanks again.

Are you going for aluclad windows?

The Blonde One

Dav010 wrote: »

Are you going for aluclad windows?

No, we are going with aluminium. We were advised against aluclad by a number of people. We were told the frames can turn black, and there was another issue I can't remember off the top of my head. We were told this by a uPVC supplier who wouldn't quote us due to the sizes and advised us to go with aluminium instead of aluclad. He didn't refer us to one of his buddies, so I took him to be genuine. A QS told us the same thing, and a BER assessor.

Gumbo

Remember, if you source products cheaper, you are now part of the design. You have to ensure CE standards, fit for purpose etc

Also, the builder can charge attendance while these are being fitted by your cheaper crew.

Also, windows for example, You may find them cheaper.
But who delivers, who accepts delivery and checks them for damage and signs the docket. Who prepares the openings? What if they are too big / small?

The Blonde One

Gumbo wrote: »

Remember, if you source products cheaper, you are now part of the design. You have to ensure CE standards, fit for purpose etc

Also, the builder can charge attendance while these are being fitted by your cheaper crew.

Also, windows for example, You may find them cheaper.
But who delivers, who accepts delivery and checks them for damage and signs the docket. Who prepares the openings? What if they are too big / small?

All very valid queries, but I have no concerns about the window company. They are a well respected commercial glazing company who are doing us a good turn.

TheBoyConor

That's all fine and good but if there is a mismatch like a wrong measurement of an ope or if a window frame gets damaged during delivery there is going to be a problem unless you have it written down in the works requriements exacly who is responsible for what.

The Blonde One

TheBoyConor wrote: »

That's all fine and good but if there is a mismatch like a wrong measurement of an ope or if a window frame gets damaged during delivery there is going to be a problem unless you have it written down in the works requriements exacly who is responsible for what.

That's something we will have to iron out prior to ordering. The window issue is new, so i haven't figured it out fully yet. I'll keep your advice in mind though.

The Blonde One

The Blonde One wrote: »

That's something we will have to iron out prior to ordering. The window issue is new, so i haven't figured it out fully yet. I'll keep your advice in mind though.

I have aluclad sash windows, they look perfect, it’s the customer care and warranty of the supplier that is the problem.

I did what you are considering, I contracted a main builder to do construction, but subcontracted electrics/plumbing etc, I got the windows myself, but the builder was very specific about the supplier measuring and fitting them, he would take responsibility for any problems.

Op, I’ve been involved in building/development for nearly 30 years, and I always have a written contract with builders.

The Blonde One

Yea, we are definitely going to go with the contract. It would probably be mad not to.
I'm sure aluclad are fine for most people, but, and not to sound like a drama queen, if anyone is to have problems with them, it will be us! So we'll go with the option that has the least amount of possible issues

db

It seems to me that there is some over-thinking going on here. In my experience, the builder included a price for bog standard windows in his quote and told us we could go with that or we could source them ourselves, we pay the window supplier directly and he reduces his price by the amount quoted for the windows. Which ever way it is done, the window supplier will come out and measure the openings, manufacture the windows to size and install. That will be the same if it is the builder supplying the windows or you supply them.
Changes to design happen throughout the build and may be suggested by the builder, the client or the architect. As we were building, our builder suggested some interior layout changes that became obvious when we could see how the house flowed and we changed the position of a stove which required a chimney to be moved (minor alteration on planning thankfully). You may say that all these decisions should be made in advance but having the flexibility to make changes as the build proceeds with everyone working as a team can lead to a much better finished product.

db

db wrote: »

It seems to me that there is some over-thinking going on here. In my experience, the builder included a price for bog standard windows in his quote and told us we could go with that or we could source them ourselves, we pay the window supplier directly and he reduces his price by the amount quoted for the windows. Which ever way it is done, the window supplier will come out and measure the openings, manufacture the windows to size and install. That will be the same if it is the builder supplying the windows or you supply them.
Changes to design happen throughout the build and may be suggested by the builder, the client or the architect. As we were building, our builder suggested some interior layout changes that became obvious when we could see how the house flowed and we changed the position of a stove which required a chimney to be moved (minor alteration on planning thankfully). You may say that all these decisions should be made in advance but having the flexibility to make changes as the build proceeds with everyone working as a team can lead to a much better finished product.

I agree with everything you posted, but when disputes arise, which they often do over money, having a written contract is important.

TheBoyConor

Changing things mid way through the design is something that is a dicey business. I'd consider moving a chimney a fairly significant change.

You would be at the mercy of the contractor, depending on whether they want to be kind to you or claim the shít out of it for additional costs and delay if they can find any crumb of a basis to do so.

The Blonde One

db wrote: »

It seems to me that there is some over-thinking going on here. In my experience, the builder included a price for bog standard windows in his quote and told us we could go with that or we could source them ourselves, we pay the window supplier directly and he reduces his price by the amount quoted for the windows. Which ever way it is done, the window supplier will come out and measure the openings, manufacture the windows to size and install. That will be the same if it is the builder supplying the windows or you supply them.
Changes to design happen throughout the build and may be suggested by the builder, the client or the architect. As we were building, our builder suggested some interior layout changes that became obvious when we could see how the house flowed and we changed the position of a stove which required a chimney to be moved (minor alteration on planning thankfully). You may say that all these decisions should be made in advance but having the flexibility to make changes as the build proceeds with everyone working as a team can lead to a much better finished product.

It's good to hear that changes can happen throughout the build, so thank you for giving your experience!
We haven't gone with a cheap builder, he's a bit expensive to be honest, but our thinking behind going with him is he won't be adding on loads of extra costs to come to a better price for himself. We have a Bill of Quantities from him, so I think we've done all we can do in regards to researching prices etc. I'm sure lots of things will come up during the build, that we couldn't possibly have foreseen, but we'll learn as we go along. I'll be an expert by the time it's finished!

kkelliher

The Blonde One wrote: »

Now I am thinking that maybe we shouldn't sign a contract. I can see why no one else I have asked has signed one, if it removes all wiggle room on costs.

Just because you don't physically sign contract terms does not mean they are not automatically implied into your contract with the builder. It depends on the basis of tender documents and what was outlined.

Not signing a contract is utter madness....it the equivalent of buying an IKEA unit with no instructions on how to assemble the unit.....contract conditions are a rule book in respect to how you deal with anything that happens....You just need to control the breakdowns into what you wish to keep control over and what you dont...all easy stuff with the right advice...

With standard contract conditions if things go wrong you can never find yourself in court, without one you can. With, you set-out insurances requirements and responsibilities, without you don't. With, you have a programme mechanism that is managed and controlled, without you dont have any control on how long the project will take or how you insure it, With, you can control what happens with things like COVID and lockdowns, without your in no mans land....

I wish you well but like so many, you are underestimating the importance of one of the most important aspects of the project. You wouldn't buy new car without a contract and that would be a fraction of the cost of your build...

Calvin001

Sign a contract - RIAI Blue or Yellow.
With your architect or Qs, break out the BoQ into PC sums under your control, and "all other works" under his control, etc.
PC sums, builder is entitled to add attendances and profit.

Building is not an exact science. Every Project is different. Personalities affect outcomes greatly, so how you deal with issues is important (hence why its a good reason to start off on a good foot). Changes are made all the time, but you need to have a back bone and make decisions quickly once you have the information. If you watch Dermot Bannon's show, you rarely see the every day changes (or the quick decisions), but always see the ones that drag on or come late.

Keep in contact with your builder by having regular update meetings and ask questions (no matter how silly), so you know whats going on.


P.S. - Get a programme for the works from the builder too which outlines cut off dates for decisions - and make sure all decisions are made before it effects programme.

The Blonde One

Calvin001 wrote: »

Sign a contract - RIAI Blue or Yellow.
With your architect or Qs, break out the BoQ into PC sums under your control, and "all other works" under his control, etc.
PC sums, builder is entitled to add attendances and profit.

Building is not an exact science. Every Project is different. Personalities affect outcomes greatly, so how you deal with issues is important (hence why its a good reason to start off on a good foot). Changes are made all the time, but you need to have a back bone and make decisions quickly once you have the information. If you watch Dermot Bannon's show, you rarely see the every day changes (or the quick decisions), but always see the ones that drag on or come late.

Keep in contact with your builder by having regular update meetings and ask questions (no matter how silly), so you know whats going on.


P.S. - Get a programme for the works from the builder too which outlines cut off dates for decisions - and make sure all decisions are made before it effects programme.

Thanks for this! Very useful information to have.
Just to reiterate folks, we are now going to sign a contract, so you can disregard what I said towards the start of this thread!

db

TheBoyConor wrote: »

Changing things mid way through the design is something that is a dicey business. I'd consider moving a chimney a fairly significant change.

You would be at the mercy of the contractor, depending on whether they want to be kind to you or claim the shít out of it for additional costs and delay if they can find any crumb of a basis to do so.

Most bespoke houses will have design changes during the build and it is only when you stand in the building as it comes out of the ground that you get a proper sense of the proportions. 3D models are useful but they are not the same as experiencing the space. The chimney was a minor alteration in terms of planning so we just needed to submit a new drawing for the record and not submit a full new application.

If I thought my builder was going to behave like you describe I would have a lot more to worry about then whether he would try to slip in a few extras.

howsshenow

Own recent experience, Builders are looking for alot of money these days and know they can get it.
When it comes to the job there is a huge focus on speed and getting the job done as quickly as possible. Job looks fine but..
wouldn't take few minutes to clean up eaves etc when reroofing.. hrs of crappy work for me,
asked to block up old doorway.. didn't remove bricks closing cavity is coldbridging,
wanting to fit replacement Windows from outside!
I'm coming to the conclusion that you would want to an engineer to specify the standards for each task cause these guys will do it the quickest way.
And the guys I employed definitely had the skills, imagine getting some chancers .

TheBoyConor

Definitely.

If it isn't spelled out in black and white, they will do whatever quick and handy way suits them.

TheW1zard

Your problem with the windows is theyll use a company which mostly deals with contractors, no customer service, not installed very well, and if you're not there on the day probably will all get hung upside down and back to front.
Oh they'll be cheaper by a few grand but its not worth it.
Sounds like -snip-.
So don't think you'll be saving money by sourcing your own.

The Blonde One

TheW1zard wrote: »

Your problem with the windows is theyll use a company which mostly deals with contractors, no customer service, not installed very well, and if you're not there on the day probably will all get hung upside down and back to front.
Oh they'll be cheaper by a few grand but its not worth it.
Sounds like -snip-
So don't think you'll be saving money by sourcing your own.

It's not -snip-. I didn't get a quote from them as I heard of a few issues with them. Anyone I have gotten quotes from have a good reputation. The company we are going with are excellent, the saving in costs comes from them doing us a good turn, not that they are an inferior company. The builder has stated he has no issues accommodating this company. From speaking to him, it seems most people source the window quotes themselves and then the builder deals with supplier. So I don't think we are straying too far from the normal process by going down this road.

Middleage Fanclub

Revisiting this thread with a related question. We have a line item in our contract for windows for 20k We sourced the windows and the supplier will fit these for 20k. Our QS is now telling us that 1/3 of 20k is actually builders profit so we’ve exceeded our budget by €6,500 and owe this to the builder as a variance. Is this right? It’s very hard to source hardware if there is some arbitrary ‘profit’ figure to be factored in? If I’m right and there is no profit for the builder here, then where is his profit (in the wider contract). This is a house renovation. Thanks

kevgaa

https://www.boards.ie/discussion/comment/121213487#Comment_121213487

You need to be careful with the way the bill of quantities is documented but it should be broken down something like below..

EXTERNAL DOORS AND WINDOWS

Amount for supply and installation of external doors and windows - 20,000

main contractor's profit 1,250 00

attendances 500 00

builder's work in connection 3,250

While the total cost is 25K you only have 20k to purchase the windows and doors

P.S. also check is VAT INCLUDED

DOCARCH

33.3% profit and attendance would not be normal!

5 to 10% profit and attendance would be normal.

Is it your QS, or the builders QS, telling you this?

kevgaa

Sorry, Those are just sample figures I made up for illustration purposes.

Agree 5-10% is normal.

builders work is unique to me as we are changing a few openings, doorways and replace lentils etc that is where it’s added on the bill of quantises.

DOCARCH

https://www.boards.ie/discussion/comment/121215281#Comment_121215281

Really the associated builders work should be included elsewhere (e.g. in demolitions/alterations). If there's an item/cost in for windows, that's what it should be for.

kevgaa

Thats your opinion and thanks for the info but each job and bill of quantities is unique so we will leave it at that.

As I said figures are made up for illustration purposes to answer an earlier question so don’t read too much into them.

Middleage Fanclub

So the BoQ says: Budget total 20,000 (windows 15,000 - works (cills, flashing, lintels etc) 4,000 - allowance 1,000)

Actual window cost 20,000 (we upgraded)

Now my QS is telling me that he is allocating 40% of that 20k cost for 'profit', so 8k and so we are now 8k over budget (a variance).

For me, the 'works' looks chunky but it's in the contract I signed but this 8k profit is pulled from thin air as far as I can see ??

Tefral

https://www.boards.ie/discussion/comment/121215720#Comment_121215720

What form of Contract did you sign?

Middleage Fanclub

https://www.boards.ie/discussion/comment/121215740#Comment_121215740

as in yellow or blue? not sure, can ask architect, why do you ask?

kevgaa

40% profit is gouging and I can’t believe that’s in a contract. As outlined earlier builders profit and attendance is generally 5-10%

if you follow that logic and are contracted to if you put in a 25k kitchen then you will also owe the builder 10k profit for that also.

Your QS is meant to be advising you on costs etc doesn't sound like they did much negotiating on your behalf.

Tefral

https://www.boards.ie/discussion/comment/121215859#Comment_121215859

So you signed an RIAI form? Thats good. Clause 19 is the same in both

(a)Sums or rates included in the Contract Documents and marked “Prime Cost” or “P.C.” are provisions to

meet payments by the Contractor to Nominated Sub-Contractors or Nominated Suppliers. Such payments

shall be net of any commission or trade or other discount.

(b)Payments as aforesaid shall be made only in accordance with the directions of the Architect as to the work

to be executed by the Nominated Sub-Contractors or the goods to be supplied by the Nominated Suppliers,

the firms to which the payments are to be made and the amounts to be paid. If any amount so authorised

and properly paid is more or less than the relevant Prime Cost or P.C. sum or rate included in the Contract

Documents the difference shall be added to or deducted from the Contract Sum as the case may be.

Middleage Fanclub

https://www.boards.ie/discussion/comment/121215949#Comment_121215949

The contract doesn't state 40%, this is the figure my QS is telling me is builders profit and I can assume that I now owe him this as a variance as I've 'over spent' on the windows

kevgaa

Maybe I’m reading this wrong but from what you said earlier

So the BoQ says: Budget total 20,000 (windows 15,000 - works (cills, flashing, lintels etc) 4,000 - allowance 1,000)

I would have said the allowance was the builders profit at 5% as that would be normal.

overspend I reckon you owe the builder

5k overspend

5% profit on that is €250

plus vat at 13.5%

Unless there is something in the contract specifically I reckon you owe the builder just short of 6k extra not sure where the QS is getting 8k