You have a construction contract for your new home or alteration with a fixed price so you know how much you will be paying when your final payment is required, right, well not necessarily!
Previously we talked about PC Sums or Prime Cost Sum which are for parts of the contract that have a price attached to them for items not yet decided upon such as taps for example and how that can fluctuate the contract price depending on how realistic the builder was in attaching an amount for such items or whether you went over your budget by ordering the more expensive items than first planed for. Although exceeding your PC Sum is a type of extra, this is not what we are discussing here.
The extras we are referring to are generated very differently and can come from different sources which some may surprise you.
Extras are simply invoices for additional work to the contract that has been performed by your builder and this invoice or invoices can be presented to you at any stage but more often than not will be at the completion of the work. This is where you get that sinking feeling and then head to the bank to ask for more money while hoping you can still afford the repayments.
An extra is generated when you request the builder to do additional work that was not included in the original building plans that were used for pricing, such as changing a window to a set of bi-folding doors or where work was performed that may have been excluded from the contract such as interior painting and now you want the builder to perform this.
Extras can also be generated by unforeseen circumstances and a good example for a new home is the depth that load bearing ground is found. if the soils that support your building are deeper than expected or lack the correct bearing capacity then the additional excavation work or structural work to footings becomes an extra and this will be invoiced in addition to the total contract figure. Alteration work is often fraught with unforeseen circumstances due to the inability to see inside walls for instance. Hopefully you will have understood the need for a contingency sum which I will talk about another time.
What a lot of people don’t realize is that extras can be generated right off the bat when your plans are drawn. Not many people outside the building industry understand how plans drawn by different people and at different skill levels and cost can in fact generate extras even before they have been handed over to the client. This comes about in two or three ways as follows.
- Lack of detail and or information.
- Poor Architectural design.
- Poor structural design or understanding of construction methods, especially for older building types.
Lack of detail or information
Plans are not all created equal and the quality of the construction plans very much depends on the attitude and knowledge of the person preparing them. Sometimes it can even be traced right back to the client.
Plans are time consuming to prepare and alterations require a lot more investigation work than a new build for instance. In theory designers could just keep on laying down information on there plans until the cost was prohibitive so there is always a balance of what is detailed and what is left up to the imagination and this is where the extra is generated. A very poorly drawn plan would only give minimal information and worse leave out critical detailing that could even generate an impossible solution further down the process.
Why would someone provide plans of this nature; cost, it cost less to prepare plans that have little information or detail, while these plans appear to the client to be adequate. The builder having more experience will do one or three things in this instance.
- Inflate the contract price to cover the additional on site design work they will need to do plus any materials.
- Alert you to the lack of quality in the drawings you have provided while giving you an opportunity to rectify the situation.
- Provide a competitive price knowing they can legitimately make up the difference by invoicing you for extras. These types will explain to you that they provided a price based on the plans you provided and then point out that the additional work they have done was not on the plans (which it most certainly wont be). Having said that, a Building Contractor has an obligation to foresee certain issues with plans and is required to forewarn you as he is supposed to be the expert. Having said that some things are beyond even the best contractors and have to be accepted by the owner.
Poor Architectural design
Poor Architectural design is where you have been rushed by the designer or the design has not been explained to you. This type of approach generally leaves you desperately trying to make up for the poor design by requesting additional work on the run therefore generating an extra.
Poor understanding of structural design
While structural design is not the realm of the Architect or Architectural designer it is important that these disciplines understand the structural nature of their design and know when to employ a structural Engineer. This is another area where your building plans can lack this critical information such as beams, bracing and footings to take these loads. This again will lead to the builder having to charge you an extra for the additional work.
So where does the unsuspecting client play a roll in generating their own extras? In the first instance it is usually looking for the cheapest plans they can find, as the saying goes “you get what you pay for”. This early saving soon evaporates and then some, by the end of the project. On top of all the extras that the owner may have generated by investing in cheap plans there is all the angst remedying the situation during the project that leaves them exhausted. Another way the owner can create an extra is by putting unreasonable pressure on the Designer to complete the drawings early which leads to omissions and errors. Finally, clients that don’t stick to their own plan and start changing their ideas on what they want.
So how do you avoid these situations
Firstly, never engage in cheap plans or plans prepared by designers that demonstrate a lack of skill. This is hard for the public to fathom as often plans that look great can be fill of areas that will create extras. But what you can look for are Designers that draw to a standard. A good Architectural Designer will have very neat presentation. In the days before computers you could tell a professional designer by the quality of their lettering (assuming they weren’t using stencils which gave a lettering style as neat as any computer), you could even tell if they were left or right handed. In addition to the above, ask lots of stupid questions such as “how is that held up” or “how do you tell if a wall is load bearing” or even “can you guarantee your roof design will work in reality”. Don’t be afraid to ask for references where you can actually contact the person who wrote it.
Secondly, check your contract thoroughly, it’s not enough to just let your lawyer approve it, you need to understand these key points I have set out in my blogs. Understand the process of how extras are handled in your contract if at all. You need to know the following.
- Does the contractor have to have any purported extras approved by you the client, in writing before the contractor undertakes any extra works and if not why not. Don’t accept this situation if this is not a requirement of your contract.
- Does the contractor have to provide a quote prior to commencing any additional work, I would expect this to be the case before I signed any building contract.
- Has an invoice for an extra been presented with your written approval for the work to be done in the first place. If the invoice for the extra has not been presented in this way, don’t pay it.
- Don’t be afraid to tell your building contractor that you have passed the invoice on to your Designer for approval and once they approve it you will pay it. I once had a CEO of a University do exactly this and after I checked the invoice and approved it only then would he pay. Prior to him paying I insisted the building contractor answer a request on an item which they did and only then was the invoice paid.
Finally, insist that the building contract has all the above written into the contract before signing and and insist (if you wish) that your designer approves all your invoices for extras. In fact you can use your designer for approving progress payment also as they will know if the work has been completed to the correct point. You have a right to request amendments to any contract you are contemplating signing.
If you have organised a Quantity Surveyor to prepare cost for your project this is the ideal professional to handle approval of invoices and extras. A Registered Quantity Surveyor is able to go to court on your behalf if you find yourself in this position and usually the Courts take their word without question.
Hopefully this provides home owners engaging in building projects with yet another skill to add to their repertoire. Don’t be shy about requesting these items into your contract. A contract without your input is probably not going to serve you in the long run. And please do not use cheap building plans, you will be amazed at how much a professional set of building plans can save you in money and angst plus a good designer will keep making you money when the time comes that you wish to sell your property. in most cases it will sell quicker and for more.
Ross Newby Architectural Designer – Design 3 Licensed Building Practitioner









