Discussed the construction contract

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The VTM program 'Save my house' caused quite a bit of commotion. Pascale Naessens and co are going on the attack against cheaters in the turnkey sector. Together with Gregory Grouwels of the law firm Monard-D'Hulst, we look at how to draw up a good construction contract.

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Before you make the biggest investment of your life, it is important to put the agreements on paper properly and clearly. In this way you easily avoid discussions. In principle, an oral agreement also applies, but who is going to prove what has been agreed in the event of a dispute?

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The following elements are important for the private client:

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Who?

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Specifying the identity of parties is important. The message is to write down the name, first name or company name and company form correctly, including the contractor's KBO number. Whether the contractor is registered is especially important if you believe you are entitled to a reduced VAT rate, if you want to receive premiums or other renovation allowance. The contractor's registration is a confirmation that the contractor has historically been in order with financial, technical, and administrative conditions to obtain that registration.

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Price

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It is also important to keep an eye on the object and price when contracting works in immovable property. Both elements together form the core of any agreement where the parties must mutually perform.

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• The object is the building being erected, the electrical installation... As a builder you have to make sure that you get all the necessary permits, that the contractor can carry out his work, that he can be paid, that you have all the useful information you have and in general that you cooperate with the contractor.
   

• The price is essential for the client, but also for the contractor. When contracting work, you have various ways in which payment can be made. The most advantageous for the client is the absolutely fixed price. The disadvantage is that you cannot deviate from the assignment without the approval of the contractor. With a relative flat rate, the quantities of some items are not yet fixed, but the price per unit is. In case of works against price list, all works are determined without a predetermined quantity, but the price per unit for each item is fixed in advance. Working against direction or free account is used, in principle for smaller works. The contractor settles materials and hourly wages afterwards. It is important here that the delivered goods and the hours worked are regularly recorded between both parties to avoid discussion afterwards.

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Tip! Agree carefully on how to arrange any additional prices or additional work. It is best that you ask that this is only possible after a written agreement about the additional work and the price. If not, you can easily end up in a common discussion.

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Interim payments

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It is also possible to agree on interim payments, instead of paying at the end. It is best to agree on a sufficient payment term. Also specify that the advance is not an agreement or acceptance of the works. That will only follow later with the deliveries. 

Please note, the type of contract discussed is not valid for the Purchase on Plan Act, where different rules apply.

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Request a guarantee ​

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It is recommended to request a deposit from the contractor. This is often done by withholding 5 or 10% until provisional acceptance. Then half of this is released, the other half when the works are accepted (final acceptance). Such withholding can also be replaced by a bank guarantee or other forms of security by the contractor vis-à-vis the client.

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Date and duration

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It is recommended that both the commencement date and the duration of the works be determined. If you determine the execution term in calendar days, the contractor will have to respect it in any case, regardless of weather. When the execution time is determined in working days, the periods for collective leave, weather absence... are added to the execution time in working days. This is the most common and often cannot be otherwise for certain works (eg structural work...). For private residential construction, it is customary to determine the penalty for exceeding the term in function of the normally foreseeable loss of use/rental value of the home.

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Tip: be realistic in determining the execution times. As a client, do not terminate an existing lease prematurely, and take the usual unforeseen circumstances into account. Determine in your favor that the fine starts to run by operation of law, without notice of default.

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delivery

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At the end of the works, the parties will meet to determine this end. In practice, the agreement often provides for a double delivery.

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• a. The provisional acceptance establishes the end of the works. In principle, visible defects that are not mentioned are covered. Small imperfections do not stand in the way of provisional acceptance. The provisional acceptance is requested by the contractor. From the provisional acceptance, the client is liable for the destruction of the structure or the installations due to force majeure, e.g. fire. Prior to this, the contractor is in principle liable for this, unless otherwise agreed.  
   

• b. The contractor can, for example, request the final delivery one year later. It counts as acceptance of the works and forms the starting point of the contractor's 10-year liability. Have the provisional and final acceptance drawn up in writing.
   

These rules correspond to what is common in practice. If there is no provision, it is assumed that the works have been accepted at the time of payment.

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Injury

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Point out to the contractor that you can hold him liable in the event of damage or nuisance to the neighbors. Not only in the event of a breach of contract, but also when the nuisance or damage has been caused without any fault (art 54 of the Dutch Civil Code). Otherwise, the client will be responsible for this alone.

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Safety

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As a client you have to cooperate in maintaining safety on the site, of course this is also a main concern for the contractor.

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Ensure as many signed agreements as there are parties.