Are you a private individual considering a minor building project such as an extension to your home or an attic or basement conversion?
You may have decided on a builder for your project but at that point it’s time to nail down the scope of the work and the costs included on paper.
To try and avoid any issues arising at the end of a domestic building project it is key to record as much as possible in writing as to what was agreed between the parties.
Disputes in contracts are always inevitable and building contracts are no exception.
Stephen Thompson, Senior Chartered Legal Executive in the Property Litigation and Dispute Resolution team at Wake Smith Solicitors in Sheffield, advises private individuals.
“A building contract is, put simply, an agreement to carry out building work in return for payment.
“What this means in reality is that if a private individual has agreed to pay a builder for some work and you accept the terms proposed by them, then both parties have entered into a legally binding contract, whether or not it is written down or recorded in any way.
“Whilst a verbal or oral contract is just as valid as a written contract, it can be much more difficult to enforce. A written contract at the outset is intended to embody all the material terms including the extent of work to be carried out, the timescale involved and the sum to be paid for that work.
“However, in the case of a verbal contract, there can be a fundamental difference of interpretation between the parties and particularly if there have been changes along the way.
“If any issues arising cannot be resolved between the parties then it would be for the Court to determine and with the inherent risk that the court may determine in favour of the other party.
“Documents always assist the court in evidencing the terms of a verbal contract including any written quotation and any correspondence including emails or text messages.
“So, for example, if there is any doubt as to whether a quotation includes VAT then that should be clarified in writing before acceptance. Once clarified, then one potential issue is eliminated.
“Again, if there have been changes to the project along the way then that should be recorded in writing. If the changes are simply substituting any originally planned works so that there is no additional cost, then that can be confirmed by an exchange of emails. If any revisions are to be at an additional cost, then the approximate sum can be agreed and recorded by email.
“By recording in writing as much as possible along the way then that should avoid or cut down on the number of issues arising upon receipt of a final invoice.
“Once done the parties should not be surprised whether or not the sum total includes VAT and as to what, if any, additional work was chargeable under the ‘extras’ column.
“It is therefore prudent to record in writing anything relating to the performance of a building contract, however minor, as otherwise a great deal of time and effort may be necessary if proceedings have to be issued, and in persuading the Court.
“To summarise, formal contracts are useful instruments to cement relationships between builders and private individuals. They should be easily understood by both parties and can clarify any issues faced along the way, and are a means of avoiding future conflict.
“Formal contracts between a builder and client do offer more protection than an informal contract when work starts, but they are not a replacement for an effective working relationship.
“Wake Smith can review any proposed draft contract to ensure, as far as possible, that the rights and duties of the parties are fully set out, in case any terms need to be enforced later.”
For further information on building contracts and disputes contact Stephen Thompson at [email protected] or on 0114 224 2040.
