Contacted Labour

Self Build Projects with Contracted Labour

Q- I am about to start my first self- build and will be using contracted labour but I will provide all the materials. The house is 170 square metres with a detached garage and I have an overall budget of £120,000. I have a quotation for the labour of £14,000 but wonder if my budget is big enough.

A - The figures you quote represent a square metre price of £705 per square metre and that is about £200 below the current rate. Your labour quote seem unrealistically low - it is the equivalent of only 35 man weeks so there is something wrong there.

Take your drawings to the builder's merchant you intend to use and ask them for a quotation for the supply of the materials. Then talk again to the firm or individuals supplying the labour and make sure that they understand the scope of the work involved. Better still, obtain quotes from other firms because the £14,000 is plainly wrong. Only after satisfying yourself on these two items of cost should you proceed. Otherwise you run the danger of running out funds half way through the work.

Q - I am considering a self build but am concerned about contracting out the work. What process should be followed? And should a formal contract be written between the two parties?

A - It depends upon whether you are going to employ one contractor to do all of the work or use a series of firms (bricklaying, joinery etc). If the former, you will probably need to enter into a formal contract using the RIBA Minor Works form (ring the RIBA on 0207 580 5533 for a copy) or the builder may have his own standard form.

Using individual firms would not require a formal contract but you should make sure that important matters such as the cost of the work, when payments will be made, how long the work will take, starting and completion dates are written down and agreed by you and the firm you intend to use.

You should also, if possible, obtain quotes from three or four firms for each trade. Remember that if you decide to use a number of firms you will be responsible for co-ordinating the timing of the work to make sure that the job flows smoothly. It may sound daunting but most self-builders have no construction experience yet are able to manage a project successfully by applying common sense.

Q - We have heard about a couple that built their house by using a contractor who charged them for the basic cost of the labour and materials plus an agreed percentage for profit and overheads, Would you recommend going down this route and what would be a fair percentage to add on?

A - This system of working is sometimes used on large projects and is usually called a ‘Cost Plus' contract. It involves a close examination of all timesheets and invoices and this can be quite onerous. It would be very difficult for you to administer this type of contract unless there was a strong bond of trust between you and the builder because the opportunity for fraud is obvious. However, if you did go ahead, an additional 15% for overheads and profit would be reasonable.

 



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