Building Contracts for domestic Works

[taxing]

Hi,

I'm toying with the idea of setting up a business which produces building contracts for homeowners who are looking to have major works done to their house.

What surprises me is when I talk to people who are having works done to their house and spending
££££'s of pounds, their isn't a robust contract in place. If there is a contract in place normally what I find is an agreement written by a builder on some scrap piece of paper laying out the terms and quite frankley it's not really worth the piece of paper it written on as it doesn't really capture the entire works and mainly it favours the builder.

I've written a few contracts for people just to test the waters but finding it hard to market the idea to gain more clients. Is this something people will take up on?

 

[Darren_Ssc]

There are already off the shelf contracts available for building works of every size and value. Written by experts and, in many cases, with every clause rigorously tested in the courts.

What are you offering that's going to be better?

 

[taxing]

There are already off the shelf contracts available for building works of every size and value. Written by experts and, in many cases, with every clause rigorously tested in the courts.

What are you offering that's going to be better?

Hi Darren,

Totally aware the contracts are off the shelf however their isn't much room within these contracts to write a fully detailed scope of works. The service I will be offering is a fully completed industry recognised building contract which incorporates the following numbered documents within the contract:

1. Fully written bespoke Scope of Works document tailored to a specific project which will cover the following elements:

a) General overview of the scope of works
b) Amplification of extent of design Responsibility
c) Responsibility of Statutory approvals
d) List of free issue materials by the client
e) Amplification of a particular section of the works where the design is lacking detail
f) details of any Interfaces with other trades employed by the client/owner
g) Access details for carrying out the works
h) General House keeping arrangements whilst works are being undertaken
i) Delivery/parking/congestion charge arrangements and responsibility
j) general protection requirements
k) responsibility of Making good areas outside of the scope but affected by the works

2. Detailed Attendance Matrix - (Checklist of all items expected to be provided by the builder & client)

3. Drawing register which lists out all the drawings and specification

4. Trade specific check list to ensure high quality finish by the builder.

5. Marked up design drawings especially where trades are employed direct by the client.

 

[Darren_Ssc]

Great, now how ar egoing to sell this service to people who already don't know or care about existing options?

I think the concept is great btw

 

[Alan]

In theory I would have been one of your potential customers.

In my life I have had two domestic building works > £50k and in the end I have written the scope of works myself, mainly as it is impossible to know what a builder is quoeting forunless you write it down.

I think you have some good extras like design ambiguities that I hadn't really considered.

One factor would be cost, what cost would you be talking about for this work.

Given planning drawing for an extension would be around £1k and building regs drawings about £1k ?

How would I know about such a service? I think that the point of contact would be the architect / designer. If the guy that did my planning diagrams said I have a great bloke that can scope your works for estimates & negotiate final contracts for £xxx? I would have listened.

 

[taxing]

In theory I would have been one of your potential customers.

In my life I have had two domestic building works > £50k and in the end I have written the scope of works myself, mainly as it is impossible to know what a builder is quoting forunless you write it down.

I think you have some good extras like design ambiguities that I hadn't really considered.

One factor would be cost, what cost would you be talking about for this work.

Given planning drawing for an extension would be around £1k and building regs drawings about £1k ?

How would I know about such a service? I think that the point of contact would be the architect / designer. If the guy that did my planning diagrams said I have a great bloke that can scope your works for estimates & negotiate final contracts for £xxx? I would have listened.

Last month I created a facebook page just to get a feel of the kind of interest I would receive. Over a 5 day period of boosting the post I was quite surprised as to the number of reactions I had received. I got about 150 reactions on the post which I thought was not bad considering.

I've also gone a ahead and created a website over the last two days to see if I can drum up interest, great shout regarding contacting architects.

I have decided to charge the following to start of with which in my opinion is quite affordable.

Projects ranging between:

up to £60,000 - I will charge £75
Up to £100k - I will charge £130
up to £150k - I will charge £150

 

[AllUpHere]

First thing that jumps out is that you aren't charging enough. What's the reasoning behind having a scale of charges linked to the cost of the job?

 

[taxing]

First thing that jumps out is that you aren't charging enough. What's the reasoning behind having a scale of charges linked to the cost of the job?

Hi,

Thanks for your reply and feedback on the scale of charges.

The reason for the scale of charges is that the higher the value of a contract the more time it will take to produce a well written robust contract as there will be more design information such as specifications,specialist reports and drawings to trawl through to ensure the scope is well captured in the scope of works document.

Someone building a simple loft conversion built in an area where there are no local restrictions will be straight forward contract to produce compared to someone making major internal and external alterations to a domestic property somewhere near a city which is in a conservation area for example or to a listed building for that matter.

In regards to the charges being low, I actually thought this myself but thought it will be a good starting point to drum up interest and awareness of the company.

I also offer to carry out credit checks on behalf of customers so people are aware that before they award a £150k renovation project to a company for example, they are fully aware of the company financial stability to ensure they are a bonafide company and have enough assets to recover any losses should something go wrong during the project.

 

[intheTRADE]

A scale of charges is definitely the right model for this service. It is a current trend especially in construction to have a scale of charges based on either project value or in some cases turnover of the contracting company.

I would echo that of the charges being to low however. I feel you should be aiming towards at least £500 minimum for anything over £50k - The small cost of £500 for a robust contract on large scale high value jobs can save thousands for both the contractor and customer in the long run

 

[AllUpHere]

Hi,

Thanks for your reply and feedback on the scale of charges.

The reason for the scale of charges is that the higher the value of a contract the more time it will take to produce a well written robust contract as there will be more design information such as specifications,specialist reports and drawings to trawl through to ensure the scope is well captured in the scope of works document.

Someone building a simple loft conversion built in an area where there are no local restrictions will be straight forward contract to produce compared to someone making major internal and external alterations to a domestic property somewhere near a city which is in a conservation area for example or to a listed building for that matter.

In regards to the charges being low, I actually thought this myself but thought it will be a good starting point to drum up interest and awareness of the company.

I also offer to carry out credit checks on behalf of customers so people are aware that before they award a £150k renovation project to a company for example, they are fully aware of the company financial stability to ensure they are a bonafide company and have enough assets to recover any losses should something go wrong during the project.

I worded my question badly. I understand the idea of a scale of charges, but a more expensive job doesn't always mean a more complicated job.

However you decide to price it, you shouldn't be doing anything for 75 quid (or 150 quid) for that matter, unless you can have the whole lot done and dusted within the hour (including initial contact, emails back and forth, actually doing the job and getting your invoice paid).

You certainly don't want to be pricing too low and it shouldn't be thought of as a way of getting a few jobs in quick. Pricing is one of those things that pretty much every small business gets wrong because they don't understand the basics. How many hours do you think it would take to draw up the contract for a 75 grand extension?

The credit check is a good idea. You need to consider though that it doesn't always give an accurate and up to date picture of a company's finances.

 

[taxing]

I worded my question badly. I understand the idea of a scale of charges, but a more expensive job doesn't always mean a more complicated job.

However you decide to price it, you shouldn't be doing anything for 75 quid (or 150 quid) for that matter, unless you can have the whole lot done and dusted within the hour (including initial contact, emails back and forth, actually doing the job and getting your invoice paid).

You certainly don't want to be pricing too low and it shouldn't be thought of as a way of getting a few jobs in quick. Pricing is one of those things that pretty much every small business gets wrong because they don't understand the basics. How many hours do you think it would take to draw up the contract for a 75 grand extension?

The credit check is a good idea. You need to consider though that it doesn't always give an accurate and up to date picture of a company's finances.

Great point you have made and you are quite right and quite honestly setting a price for my service is the most hardest part. I don't want to set the price too low and at the same time not turn away potential business. Realistically a £75k project will take me around 3 or 4 hours to put a detailed contract together provided I have all the necessary information. Putting a £100k order on the other hand will take me around a day and a half.

Think I need to seriously think what is a fair price and at the same time not under cut myself. Thank you for your honest feedback much appreciated.

In regard to the financial checks although it may not be totally up to date it will give people an idea as to the stability and existence of a business.

Thanks again.