RIAI white form retention builder issue

CJDoyle

Hi,

We are at the stage of finalising contract for our new build. Our architect recommends using RIAI white form given the scale and complexity's of the build.
Our contractor does not want to entertain a payment retention clause. Would this be a red flag?
Any advice would be appreciated. We want comfort that the builder will stay honest but we’re also under pressure to get going and other contractors have approached have said no after looking at the plans due to it spec and complexity.

baxterooneydoody

https://www.boards.ie/discussion/2058364619/riai-white-form-retention-builder-issue

What's the retention percentage and for how long. With all the work out there any builder would be crazy to accept a retention order unless it's very small, any quotes I give states no retention will be tolerated on the quote sent to the client.

CJDoyle

Thanks for your opinion. 5% with half paid after 6 months and the balance after 12 months.
So without retention what comfort do the we have that any defects will be made good? Just the builders word?

baxterooneydoody

https://www.boards.ie/discussion/comment/122508626#Comment_122508626

Isn't that what contracts and solicitors are for? Have your architect sign off on each stage with thorough inspections at regular intervals.

As with every business you deal with there's consumer rights in place to protect the consumer.

Do you try to hold 5 percent on any other business you deal with just in case something is wrong, there will be snag list as long as your arm as there is with most builds but make sure your architect stays on top of it and everything should be fine

CJDoyle

I think where the architect is coming from is regards to defects that won’t be apparent until months after. Yes it is a requirement for the bank that architect and engineer will sign off on each stage before payment is released.

Yes I understand you comment regarding other businesses and not having a retention in place for other services but on the other hand the cost of building a home is unlike any other purchase most people would make in their lifetime.

It’s really because of the complexity of the build that we would prefer that retention comfort. It’s not your standard house.

I appreciate you taking the time to provide your opinion.

baxterooneydoody

I suppose it all depends on how big the builder is and if he can afford to take retention, if they're a big company with multiple jobs on then the cash flow would be there to keep things going, if it's 1 man with a few employees doing less jobs then I think it's a bit much to ask as 3 or 4 jobs all holding 20 or 30 k in the year amounts to quite a large sum. My own experience is if they ask for retention I walk away

crybaby

I'd be cautious about a contractor refusing a retention clause. It’s there to protect you if something goes wrong after the job's done. If they’re pushing back on it, I’d be wondering why. Maybe see if there’s room for a compromise? Like reducing the retention period or amount. But if they’re completely against it, that could be a sign to rethink things.

CJDoyle

Yes of course I understand the company size and available cash flow is important.

CJDoyle

Thanks for your comment. That’s exactly what we’re thinking and wondering why. The company isn’t a large scale developer but not small scale either - 3 directors and 8 full time staff. Hopefully we’ll be able to negotiate on this.