Hire a builder - Avoid disputes, know that quotes do not replace a contractual agreement. A price quote does not specify the complexity of a job. Cover the risk that jobs are differently rated by clients and builders.
Hire a builder
What should you know about builder’s quotes?
When I heard the story from a house extension job to increase the living space quoted by $200,000, I could not believe that the finished job has been invoiced 100,000 Dollars above the quote. That case went to arbitration under the Construction Contracts Act and the ruling split the quote blowout in halves plus nearly $100k for remedial work. Because of the financial consequences both parties were devastated. Remarkable was for the entire building job—apart from the quotation no contract had been signed.
If you look for similar cases, you will find a large number of examples which suffer following symptoms:
· Accepting a quote and engaging the builder without written contract or any specifications for the job
· Taking a bargain-priced quote but not understanding that start, finish dates and deliverables have been left open
· Making up-front payments without agreed payment schedule and completed paperwork
Good business practice is signing an agreement that specified time frames, materials, and the expected results. Without completed paperwork before the job starts you take the risks being exposed to sub-standard work, unreasonable delays and disputes.
Common reasons for disputes
When reading about disputes, most complaints are made under the assumption that the job becomes too expensive, takes too much time, or is sub-standard and poor quality.
Understand a quote is to obtain a job/project—it is not a contract!
If you want to avoid disputes, try to understand the chosen quotation and ask for details. The complexity of a job is differently rated by you and the builder.
Remember, “quotes for free” are marketing tools and quotations very low in price have only one reason - the trader wants to get the job.
That is why after accepting a quote the scope of work, timeframe and a breakdown of costs need to be put on paper. I call it risk management and read here more about.
When confirming the quotation in writing, after discussing the details, it is good practice to attach those details like payment schedule and time frame for completion. In larger projects we always add a penalty clause if a party fails to deliver. Recording the progress of work is helpful for all involved especially when the plan/scope of work has change by mutual agreement during construction.
Communication and disputes resolution
If you have legitimate concerns about work progress, quality and workmanship - the basic rule is “communicate before the invoice arrives”. I heard stories from customers refusing to pay because of issues never discussed with the tradesperson before completion.
A dispute is always a dilemma that could have been prevented by good communication. Disputes also pose risks that people abandon a job half way through. Finding a new or alternative builder might be difficult because of warranty issues and - who wants to figure out other people’s problems?
With these considerations above you possibly realize that the quotation of a project is meaningless if you don’t follow through the negotiation process by getting the job/project description, price, timeline and disputes resolving remedies on a signed paper.
Having completed the paper work, managing the work will be much easier. Who does not like a smooth project and good results (value for money)? Good luck.
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