Think Before You Build

Private Property South Africa

After sifting through the property market for months, you come to the conclusion that the only way you are ever going to have the home you truly want is to have it custom built.

Building your own home carries with it a number of pros and cons. On the plus side, you will be able to tailor design your dream home down to the last detail. As such it will undoubtedly mean that much more to you than the average ‘Mcmansion’ ever could.

However, before you get caught up in the whimsy of designing your own home, you need to realistically consider who you are going to contract to build your home and the legalities pertaining to such a scenario.

There are good and bad practitioners within every profession. The building industry is no different. ‘Fly-by-night’ builders and poor craftsmen are a very real risk. As such, it is in your best interest to ensure that any builder you contract is registered with a regulatory body such as the Master Builders Association South Africa (MBSA) or National Home Builders Registration Council (NHBRC).

The MBSA functions as a federation on behalf of registered employers’ organisations which represent contractors and employers operating in the building and construction sectors. The MBSA aims to “promote quality and standards through excellence in service to its members.” It also supports national building policies and promotes a sustainable building industry.

The MBSA has standardised a number of building contracts for the use of its members as well as the general public. These have been compiled according to various applications and are regularly updated.

The following contracts are currently available:

• House Building and Small Contracts Agreement

• Domestic Subcontract Agreement

• Labour Only Subcontract

• Agreement for Renovation and Refurbishment Work to Existing Premises

The MBSA discourages amending these contracts. However, if amendments or alterations have to be made, they should be listed under the relevant clauses and should be carefully assessed by all parties. In addition to contracting registered builders, it’s advisable to obtain references and physically view a few of the builder’s past projects.

In terms of non-performance or faulty workmanship, owners should first approach the builder regarding the issue. If the builder refuses to correct the problem, the incident should be recorded in writing, following which the owner can approach the relevant provincial Master Builders Association (if the builder is a member) to lodge a complaint. The association will then endeavour to act as mediator.

In terms of the NHBRC, this body was established to protect the interests of housing consumers by ensuring homebuilders comply with regulated building industry standards. The NHBRC maintains a register of builders, performs inspections, provides training programmes, issues warranties and handles disputes.

All homebuilders must register with the NHBRC and all homes must be enrolled 15 days prior to the commencement of building. Once enrolled, the house falls under the protection of the NHBRC’s warranty scheme which protects housing consumers by providing a five year warranty against major structural damage, 90 days defect liability warranty cover and 12 months roof warranty cover.

All homes constructed by registered NHRBC builders must comply with the NHBRC’s Home Builders Manual which prescribes minimum quality standards. If a defect does occur in the absence of an NHRBC inspector and an owner encounters problems with the builder, the owner can contact the NHBRC for assistance.

The NHBRC will investigate the complaint and if found valid, will contact the home builder and insist that the problem is attended to within a specific time frame. If the builder does not co-operate, the NHBRC may hold a meeting on site between the owner and the home builder. Such an ‘intervention’ usually results in the builder honouring their warranty obligations.

It’s worth noting that no building contract should be signed without the inclusion of the following aspects:

• Anticipated completion timeframes. Define what is expected for completion of the building plan such as sign-off of final snag lists along with definitions of excusable delays. Crucially, information concerning penalties and fines for failure to comply with contract deadlines must be included

• Deemed warranties such as that stipulated by the NHBRC

• All initial cost estimates as well as a final figure for the entire cost of completion, the financing term and importantly, the contractor’s payment schedule. Do not agree to make payments ahead of certain milestones being met and be wary of requests for large upfront deposits unless the contractor provides security against absconding with the money

• List any insurance requirements that might be necessary to cover unforeseen accidents or problems that may arise during or after the building’s construction

• Clearly define the procedures for substitutions and any exclusions

• Clearly state the rights of all parties in terms of access to the project and inspection procedures

• Request submission of all relevant certificates such as the electrical and occupancy certificates

• Conflict resolution: an arbitration clause, the terms of settlement and procedures for formal notification need to be included. Ensure that all warranty and service policies are listed to deflect conflicts that may arise from warranty disputes

• Specify, in detail, what materials are to be used and where. This will help avoid disputes later on by preventing either party from taking unilateral decisions

• Attach any documents required by law to the building contract. Each page must be reviewed and signed by all parties, including your attorney and be witnessed

Of course you don’t have to be a qualified builder to be able to discern whether or not a builder is performing a good job. Keep an eye out for the following when inspecting your building site:

• The site should be clean and tidy

• Timber should be adequately treated to withstand the elements

• Joinery should be stored under cover in a dry, well-ventilated area

• Doors should be stored flat not on end or on their edges

• Cracks and uneven surfaces should be questioned immediately

It’s worth mentioning that while the onus may be on the builder to perform, compliance works both ways. Those embarking on building projects must ensure they have sufficient funds to see it through. If an owner funds a build themselves, builders are entitled to stipulate a ‘builder’s lien’ which essentially entitles them to seize a property if payment isn’t made.

Owners should also ensure builders utilise the services of quantity surveyors to ensure the boundaries of a property are clearly marked. This is necessary as there have been instances where builders have built over the boundary of an owner’s designated plot. Needless to say this causes major problems as neighbouring plot owners can sue for land encroachment.

Finally, do not negotiate in good faith without documentation and visit the site frequently. Doing so will enable you to gauge whether or not the house is being built according to your expectations.

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