You need to have a written agreement with any trade firm before you finally accept a quote and work starts on the ground. For smaller jobs, under £1,000 or so, an exchange of letters may suffice. For larger works, you can purchase the Scottish Building Contracts Committee formal contract for around £35.
Scottish Building Contracts Committee (SBCC)
Almost every building contract in Scotland uses a format drawn up by the SBCC.
There is a version of this contract suitable for domestic owners who do not have a professional adviser and where works are of a lower value (it should not be used for large projects). It costs around £35 to purchase and is a very worthwhile investment.
What a good building contract should contain
These points are all covered by the SBCC Contract and should also be covered in any exchange of letters between yourself and your chosen builder.
Scope of the work
- description of work (from the quote/supplied drawings etc.)
- building warrants and permissions – who will obtain these permissions if needed
On-site arrangements
- what facilities the builder/s may use (toilets, power, water, etc.)
- permitted working hours
- insurance provisions (for both the client and the contractor)
- work conditions – builder’s competency, materials quality, use of sub-contractors, regular attendance on-site, what will happen about any damage caused, health and safety, changes in specification, client’s responsibilities
Timing
- start and finish dates, how extensions to the programme will be permitted
- how long the builder has to deal with ‘snagging’ problems (the SBCC Contract allows a three month snagging period)
Costs
- the agreed price, how any variations on the price will be determined, any VAT due
- when instalments will be paid (if required)
- if there will be a retention and for how long it will be held (the SBCC Contract allows a 5% retention which must be paid within 14 days of the snagging being complete)
Disputes and guarantees
- how disputes will be handled (the SBCC Contract allows for adjudication by the RIAS, Scottish Building Federation etc., with a maximum fee of £1000)
- guarantees (the SBCC Contract provides a five year guarantee on contractors’ faults)
- ending the contract, builder’s default or competence, cancellation, insolvency, client’s failure to pay
Signing the contract
This will need to be signed by one owner or the property manager, unless you have an owners’ association or development management association which is a corporate body.
The individual who signs will need to take responsibility for all payments and recover costs from other owners. So, advance payments should be in the common maintenance account from all owners before going ahead.
