Construction contract reviews: What New Zealand homeowners should know before signing
New Zealand homeowners can avoid a long and costly construction contract dispute by getting a contract review before work even begins.
Construction contracts help establish the basic expectations for a construction project and presents a series of rules that your contractor agrees to follow during the course of the project. Contracts include a lot of different clauses and requirements that can be confusing for the average person to interpret and understand. New Zealand requires a written contract for any building project that costs more than $30,000, according to the New Zealand Ministry of Business, Innovation & Employment.
Although most contracts are written fairly, there are some pitfalls that can leave homeowners stuck in a terrible situation. Before signing a contract, always have a professional look it over, like the team at Contract Control in Christchurch.
Here are five reasons you should get a contract review before your next home construction project:
- A contract is your most important document in the event of a dispute
Contract disputes are not uncommon in the construction industry, so you need to know what your contract contains and how you are legally protected under your contract.
Many homeowners jump into major home improvement projects not realizing they will be expected to sign a contract for the work. Although you want to get work on your project moving, you should take time to have your contract reviewed by a professional in the event that something with your project doesn’t go as expected.
If for some reason you do end up in a dispute with a construction contractor, an attorney will first ask to review your contract to establish whether you have grounds to bring a claim against the contractor. Homeowners who are not sure what their contract says – or worse, don’t have a contract – are at a major disadvantage going into a dispute with a contractor.
2. The contract includes the scope of work and important details about your project
Your contract should include every facet of your project and what your contractor is responsible for completing. There are various types of construction contracts, including full contracts, labour only contracts, and managed labour only contracts. These contracts each have different sets of basic expectations that you and the contractor agree to.
Homeowners who are not familiar with construction projects or legal contracts should always have a professional review the contract to at least ensure it’s thorough and there won’t be any surprises or unfinished work left at the end. A professional can explain what the scope of work is in the contract, ways you can improve the contract, and any other additions or revisions that should happen before work starts and you’re locked in to the agreement.
3. A well-written contract makes terms of payment clear and easier to budget for
Construction projects are often major financial investments, so having clear and fair payment terms is a must to responsibly manage the project. Payment terms are often laid out in the contract, and a professional should make sure all payment terms are defined to fully reflect the point at which payment is due. These terms are meant to benefit both you and the contractor from future disagreements or financial uncertainty.
In some instances, you can set a guaranteed maximum price, which requires the contractor to stay within a certain budget and avoid extra costs. If the project is done under budget, your contract can specify how you share any cost savings with the contractor. A professional can review your contract for these terms and offer an impartial explanation on how payments will work under your contract.
4. Professionals can review your construction contract quickly and thoroughly
Don’t try to take on your construction contract review yourself. Contracts can be highly detailed and specific depending on the type of work, location, type of contract, and more. Even if a contract appears to be thorough and fair, it could be missing important information or clauses that could further protect your rights as a homeowner.
Experienced professionals, like the team at Contract Control, are best at reviewing construction contracts because they are familiar with how contracts are structured and what they typically should contain. A professional contract review will also save you hours of your time and potentially a good amount of money down the road if you end up in a contract dispute with the contractor.
Professional contract reviewers are also well educated in the latest laws and regulations regarding New Zealand construction contracts, such as the Construction Contract Act 2002 and later amendments. that impact many construction projects.
5. You’ll love having an understandable timeline for your project
Lastly, a good construction contract will give you a clear and workable timeline for your project.
For homeowners, this is particularly valuable so you can plan for any major life changes that may come with your construction project, like moving to a new place, changing jobs, or starting school. Your timeline also helps you keep your contractor accountable and know whether the work is moving according to schedule.
However, there may be amendments to the timeline that your contract should clearly explain, such as weather delays, labor shortages, or unforeseen repairs.
Schedule your construction contract review
Our team of industry professionals can make sure you aren’t being taken advantage of by a contractor, and that you’re agreeing to a good, reliable construction service. Regardless of the size of your construction project, you should always have a skilled professional help you through the contract phase. We can also assist in construction disputes, expert witnesses, commercial reporting, and more.
Contract Control can help New Zealand homeowners get the best results from the construction contracts. Contact us at help@contractconrol.nz or at 03 669 4803 for your construction contract review. You can also find us on social media.
Links:
https://www.nolo.com/legal-encyclopedia/what-look-avoid-when-signing-home-building-contract.html
