ᐅ Having a Construction Contract Reviewed / By Whom? Is It Necessary?

Created on: 13 May 2022 11:28
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Andreas_79
Hello everyone,

After endless reading, searching, discussions, and so on, we are slowly reaching the final phase of our house building project, although it really only begins at this point 🙂

We are now in the final stages with three providers and would like to sign something within the next four weeks if it fits, which looks likely at the moment. This brought up the question for me: who actually reviews the construction contract?

I checked online, and the consumer advice center in NRW currently does not offer contract reviews. Who else can I turn to? Is it even necessary to have such a contract reviewed, and do the major providers make any changes to the contract if we raise concerns? I suspect these are always the same standard terms and conditions, or do they vary from project to project?

How have you handled this? I am neither a lawyer nor an expert, and with such an amount of money involved, I would like to have a bit more security.

Best regards,
Andreas
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filosof
13 May 2022 12:33
I see it differently. Construction work is done by people. And wherever people work, mistakes can and will happen—no matter how reliable or local the building partner is.
I am not able to identify these errors myself, and considering the huge investment, I can sleep more peacefully if a professional is involved who ideally has nothing to criticize.
I also have great trust in our construction company—otherwise, I wouldn’t have hired them. Still, in my opinion, spending a few extra dollars is a good investment given the total cost.
11ant13 May 2022 12:41
For prefabricated houses—although he specializes only in those—there is also the "prefab house expert" Tobias Beutler. Hopefully, you don’t want to have a custom design built without an architect, right?
https://www.instagram.com/11antgmxde/
https://www.linkedin.com/company/bauen-jetzt/
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Prager91
13 May 2022 12:54
filosof schrieb:

I see it differently. People work on construction sites. And wherever people work, mistakes can and will happen—no matter how reputable or local the builder is.
I am not capable of spotting these mistakes, and considering the huge investment, I sleep better knowing there is an expert involved who ideally has nothing to criticize.
I also have great trust in our construction company—otherwise, I wouldn’t have hired them. Still, in my opinion, spending a few extra dollars is well worth it compared to the total cost.


This is not really about contract review... In my opinion, everyone can do that on their own.

Construction supervision... yes, I don’t think much of it either. I saw it with a neighbor. The supervisor came a total of three times and basically made comments about things you had already noticed yourself or had been informed about by the general contractor (GC).

Your construction supervisor is not on your site every week, checking every step…

If the GC has good references and works with reliable tradespeople, then there should be a certain level of trust. There will be far less poor workmanship that way.

However, your supervisor can only see what is visible. Anything underneath or hidden won’t be noticed either. In housebuilding, in my opinion, you have to be able to trust the GC (and obviously the subcontractors); otherwise, you might as well forget about building a house.

That’s why my approach is: carefully choose the GC, check the trades involved, look at references, then have a lot of trust and keep visiting the site regularly. In my view, you can notice a lot yourself if you take the time to learn about the process.
Tolentino13 May 2022 13:02
Sorry, but this is a recipe for frustration and a lot of tears.

Have the construction contract reviewed only by an expert—either a specialized lawyer or at least a building consultant.

Have the building inspected only by an expert—such as a building surveyor, or at least an architect, structural engineer, or master craftsman with extensive experience.

How often the expert visits depends on the contract, but at least 10 appointments should be scheduled. Especially at the critical stages, so nothing is installed without the expert’s review.

Even if the general contractor is your brother, always use an expert as your construction supervisor. The general contractor has subcontractors who work on their own account and are accountable not to you but only to the general contractor.
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Prager91
13 May 2022 13:09
Tolentino schrieb:

Sorry, but this is a recipe for frustration and lots of tears.

Review the construction contract only with expertise, meaning a specialist lawyer or at least professional owner’s advice.

Inspect the building only with expertise, such as a building expert or at least an architect, structural engineer, or master craftsman with extensive experience.

How often they come depends on the contract. There should be at least 10 appointments. At the critical points, nothing should be built where they cannot check afterwards...

Even if the general contractor (GC) was your brother, only use experts as construction supervisors. Because the GC has subcontractors who work on their own account and are not accountable to you, but at most to the GC.


Don’t exaggerate...

You also have to honestly tell the original poster what is “normal” or what they can/should/must do.

Sorry, but contract review and construction supervision is not normal.

In our new development, I only know two people who have done this (out of 80 homeowners).

Strangely, these two people still haven’t finished after what feels like a year and a half 😀

I have heard very few complaints from the neighbors, mostly only from those who had such construction supervision.
The GC is naturally not a fan of this either... In my opinion, it can also negatively affect the relationship with the GC.

But yes... it’s also a matter of personality. Usually, very cautious people use this service (which is not wrong in principle), but it doesn’t always have a purely positive impact on the building process.

I think it’s quite feasible to manage well without it.

Mistakes happen, and they happen even with supervision. In 90% of cases, problems are solved even WITHOUT supervision.
--> That’s why it’s important to choose the RIGHT GC who makes an effort, has decent tradespeople, and manages the construction properly.

Therefore, always check references, see which GCs build in your area, and choose a GC locally... They and usually all tradespeople (in our case, all come from within 20 m (65 ft)) have a reputation to maintain – this has a very positive effect on the build in our experience.
Tolentino13 May 2022 14:13
Prager91 schrieb:

I have heard very few complaints from the neighbors, mostly only from those who had construction supervision.

Yes, of course, because some don’t know what went wrong in their project, while others do and are now taking action.
Prager91 schrieb:

The general contractor (GC) is naturally not a fan of that... In my opinion, it can also negatively affect the relationship with the GC.

That wouldn’t speak well for the GC. As mentioned, the GC also benefits when an expert monitors the subcontractors. The GC does have a site manager, but four eyes see more, and above all, the site manager must maintain long-term relationships with the subcontractors. If he can say, ‘Sorry, the client’s expert requires this,’ he can easily shift responsibility.
Prager91 schrieb:

I think it’s quite possible to manage well without supervision.

That’s what you think. Either you don’t notice all the mistakes or you’re simply very lucky.
Prager91 schrieb:

Mistakes happen, and they also happen even with construction supervision. In 90% of cases, they are resolved even without supervision.

No, it’s more like you don’t notice about 70% of the issues. Maybe 50% of those get fixed, and of those, only 50% get fixed properly and according to technical standards. The 30% you do notice get fixed with a lot of fuss so the client sees how carefully the GC is handling things. Out of those, maybe 80% are done properly—if you’re lucky.
Prager91 schrieb:

That’s why you should choose the RIGHT GC who makes an effort, has reliable tradespeople, and manages the construction carefully.

How is a layperson without expertise supposed to judge that?
Prager91 schrieb:

Therefore, always check references, see which GCs are building in the area, and choose a local GC... They and usually all tradespeople (in our case, all come from within 20m (65ft) radius) have a reputation to uphold, which has a very positive effect on the project here.

That’s true, but it doesn’t help if there is misconduct later on.

Again, and sorry for being so blunt here, but when the total project volume exceeds half a million and more, it’s really borderline foolish to try to save maybe 4,000 USD on the fee of a construction expert. It’s fine that you believe you got lucky, but that can’t seriously be recommended to future homeowners.