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Work Stage 5 - Construction to Practical Completion
Your Home becomes a building site
Renting a property and how your Home changes into a Building site
On the agreed start date, the Contractor will take possession of the site.
Unless the works are detached from the house, or self-contained, we strongly
advise Owners to move out of the property. Many people initially decide they
wish to remain in the property, with the Builders working around them. But from
many years of experience, we have found that the 8.00 a.m. starts, tired children,
scared pets, dusty house, lack of water and electricity, constant noise etc. etc., soon
begin to take their toll, until the relationship between Owner and Contractor
becomes fraught. Basically your home becomes a building site, and we cannot
stress enough that most people soon recognise the best thing they did was rent
somewhere nearby, for at least the main section of the work.
The Contractor has possession and controls the site and house. For Health and
Safety reasons, you will therefore need to advise him of when you wish to walk
around the site. This sometimes feels a little strange for home owners, but so long
as you have a good working relationship with your Builder, access and safety on
site can be easily managed.
Contract Administration
For the first time in the project, the Architects role changes and they become
a Contract Administrator. This means they must legally act impartially towards
both the Employer and the Contractor. Therefore, the Contract Administrator is
required to fairly and impartially check the works on site are being built as per the
Contract documents, and provide the necessary Contract certification throughout.
A Contract Administrator must not be confused with a Project Manager (who is
employed directly by the Owner to act on their behalf, but has no Contractual
powers). It is important to employ a Quantity Surveyor to undertake the cost
control of the project, as this is not within the role of the Contract Administrator.
The role of the Contract Administrator is to regularly visit the site, either once or
twice a month and to check the works are being undertaken to the specification.
They will answer all the questions and queries that come in from the workmen
on-site, and will discuss those variations to the building works when opening up
occurs, such as how to undertake the repairs.
They also make sure that the Contractor has only applied for payment for those
works that have been undertaken. At the same time the Quantity Surveyor
will assess the applications for payment from the Builder . If the Contract
Administrator is content with the work undertaken, they certify them each month
with an Interim Payment Certificate. After this the Contractor will send you the
monthly invoice, plus VAT where applicable.
The Contract Administrator documents all the variations to the building contract
by writing Architect’s Instructions, which list the works to be added/omitted.
The Builder is then required to provide a price for these changes each month for
the Quantity Surveyor to assess.
Progress Meetings
Each month the Contract Administrator and Owner meet on-site to go through
the Contractor’s queries. On small projects, this is a fairly informal walk around.
On large projects the meeting is normally a walk around, followed by a sit down
meeting; with Contractor’s, other Consultant’s and Owner’s Reports being read,
and Minutes being taken.
Contingency Sum
There will be a contingency sum within the Contract to absorb the necessary
variation works to the project. This is usually 15% of the cost of the works. In our
experience, the contingency is always used up. It is very common for additional
desirable items to be added in during the course of the works. These will be over
and above the Contingency.
Niggles and Disputes
During the building process, there will undoubtedly be times when you feel
frustrated or worried about a particular issue(s). Over the years, we have found
the best way to deal with this is not by sending an irate e-mail, as this simply
upsets the team relationship; but instead, pick up the phone and chat through any
concerns or worries you may have. We can then discuss these and have a meeting
if necessary, to address them quickly and amicably.
Quantity Surveyor
On every project we recommend that a Quantity Surveyor is employed during
the construction phase, establishing the cost of the works and evaluating the
Builder’s costs for extra works as the job is on-site, and agreeing the final account
is a very high priority for Owners. As such, Architects are not qualified to provide
this advice, and therefore a Quantity Surveyor is employed to do this.
A Quantity Surveyor’s role on-site includes:-
- Evaluating the monthly application for payment.
- Producing a monthly cost report, this offers advice to the client regarding
the percentage of the work undertaken to date and the cost of work being
applied for. - Providing an assessment of the value of the variation prices submitted.
- Providing advice on the contingency sum left.
- Providing the projected estimated Final Contract Sum each month for all the
additions/omissions to date.
It is not unknown for Contractors to be slow in providing prices for additions/
omissions. The problem with this is that you will not know the projected final
cost until the end of the project, when it will be too late to omit items, or not
undertake extra works, and results in the project going over budget. This can be
the biggest downfall/cause of dispute in building projects, so we cannot stress
enough how important a Quantity Surveyor can be, as they will insert costs if the
Builder fails to do so.
If you wish to add work to the Building Contract, tell the Contract Administrator
so they can write an Instruction; and for larger items, make sure you get a price
before the work is undertaken to avoid unknown creeping costs.
Timing
When additional or variation building work is added into the Building Contract,
then an equal amount of additional time will need to be added onto the end of
the Completion Date.
Many building projects need to be extended by around 15%, and on an average
project, this often amounts to about two months additional time.
The Contract Administrator ensures the Contractor is working regularly and
diligently while on site, but they are not able to “hurry him up”. It is the Builders
responsibility to manage the programme through to Completion. The Building
Contract has liquidated damages, if the Builder overruns the completion date,
which the Employer can apply if they so choose.
Rather than rely on the liquidated damages to keep abreast of the timing, which
come in too late anyway, we recommend a monthly “Progress” Meeting with the
Architect/Contract Administrator, Employer and Building Contractor.
At this meeting the Contractor presents any issues and reports on the
programme.
Extension of Time
A Contractor is entitled to an extension of time to the Completion Date if
extra works have been added to the project. It is the Contract Administrator’s
decision as to the extension of time the Builder will be granted. This is usually
established through the percentage of work added to the original contract, and
the complexity of the new work.
Please be aware that if the Contractor requests, and is entitled to, an extension of
timetime of at least a few months. The Contractor will also be entitled to prelim
site and overhead costs associated with this additional time. However, if an Owner
needs to get back into the building by a certain date, the most productive way of
progressing works for a final date is to sit down with the Contractor and discuss
the options available. One option is Partial Possession of the building by the
Owner, which involves then moving into part of the building whilst work is finished
off elsewhere.
Non – completion and Liquidated Damages
If the Contractor fails to complete on either the contract date or the new
completion date, if there has been an extension of time, then the Employer may
choose whether or not they wish to charge liquidated damages.
Liquidated damages is calculated as the weekly sum of money agreed between
the Contractor and Employer before the contract is signed, which must represent
the actual sum of damages the Employer would incur if the contract finishes late.
Most Employers relate this to rental charges and additional professional fees for
attendance during the months the contract is running late.