Skip breakfast not the contract
Research shows intermittent fasting offers health benefits. Skipping breakfast can be a great way to go. Skipping the contracting process in your property and construction projects will have the absolute opposite effect.
Contracts can feel time-consuming and overly formal, especially on smaller jobs and when working with people you know. But neglecting them can lead to costly mistakes that derail your projects and cause an administrative headache down the line.
Verbal agreements or poorly papered contracts leave room for assumptions to creep in:
What you consider a ‘complete finish’ might be different to your contractor’s definition, for example including or excluding painting.
You may have different views about who is sourcing materials and the quality standards to which they should be supplied. One may result in delays when materials aren’t ordered and the other in subpar work that does not meet expectations.
What is included in the work may also be assumed or unclear. For example, what does ‘renovate a kitchen’ actually mean? Is demolition required, plumbing and electrics, cabinetry installation or is the latter done by a kitchen company?
When you say ‘finish in 6 months’ and delays occur, what do you each expect to happen? If you see a problem coming and agree a workaround together, are you clear of the impacts and keep a record of it all?
And what about price increases on building materials and payment schedules? Who is carrying the risk and are you on the same page with milestone payments or do you want to pay in smoothed installments. Disputes over prices and non-payment can stall jobs.
69% of property projects run over budget by more than 10%. The average is 28%. 75% run over time. This all eats into profit margins, timelines and stress levels. Disputes often centre around administrative issues, inadequate paperwork, misunderstandings of who is expected to do what, how and when. Contracts allow you to set clear expectations, agree on the consequences of missed deadlines or standards, and keep everyone accountable to ensure projects stay on track.
People often overlook that the contract is not just clauses on a page. It is made up of a number of things. For example the main contractor contract will include the following ‘pack’ of contract materials:
Scope of work
Costs schedule
Payment schedule and related incentives
Specifications and designs
Terms and conditions e.g. RIBA or JCT
These elements are of equal importance and they all need to be in place. They provide a neutral reference point for what has been agreed and what should happen if things don’t go to plan. In fact, even when budgets are low, every property project is underpinned by a series of legal agreements and promises exchanged between all the various people, organisations, professions and trades. Whether those agreements are verbal or written, shaky or solid, they are the foundation upon which the project stands.
The most successful projects see contracts as a tool of success not an inconvenience to ignore or put in the drawer and hopefully never refer to. However, contract establishment and management are typically a clunky, paperwork-heavy exercise and the one that gets lost or groaned about on the to do list.
ClearBuild takes care of the contract foundation with minimum fuss. It is one of the most unique features of the platform. You can get industry standard terms agreed with ease and stored in your project environment - no need to rely on copy paste or something borrowed from a friend. You can suggest, track and control changes seamlessly, updating your contract ‘pack’ and ensuring changes are documented in a way that aligns with contractual best practice, in case disputes ever do arise. And you can securely share access to contract documents and other compliance information, so everyone can stay up to date on the latest version, removing the need to ferret about looking for files and emailing them back and forth.
As the technology develops, so the functionality also increases, where the platform can generate reminds about contract requirements, milestone dates and payment terms, and can take action on your behalf, such as requesting or checking progress reports and submitting planning documents.
Skipping breakfast might leave you a bit hungry, but skipping your contracts will leave your entire project starving for stability. So before your project gets going, take pause to get your contract foundation in place and take care of that foundation until the very last dust has been cleared and payment exchanged.