How to protect yourself from building nightmares

Building a house or any home renovations can easily turn into a nightmare if you are not careful. To avoid this, it is important to know where the pitfalls are and how to protect yourself against them.

We all know someone who had problems with a builder, but it is also true that there are good builders who complete the job properly and on time. The trick is to find one of the good ones and not sign an agreement with a builder who is a fly-by-night and will disappear with your money before the work is completed.

It is always better to use a contractor who is registered with a professional body to ensure that you have some recourse when things go south, although using a registered builder is not always required for home renovations.

However, builders who build a new home from scratch have to be registered with the National Home Builders Registration Council (NHBRC), while home improvement or renovation builders do not have to be registered, although banks will generally not approve financing for the work for someone who is not registered.

The only other recourse for consumers is the regional offices of the Master Builders’ Association if the builder is a member, or the redress offered by the Consumer Protection Act (CPA).

The NHBRC

The NHBRC is a statutory body established in terms of the Housing Consumers Protection Measures Act to protect the interests of housing consumers and ensure compliance to regulated building industry standards. The Act requires anyone who builds homes to register with the NHBRC which certifies builders who meet industry criteria for technical, construction and financial capabilities.

Unfortunately, the NHBRC only has jurisdiction over new homes and not building improvements or renovations.

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Master Builders’ Associations

Membership of regional Master Builders’ Associations is voluntary and members can only be disciplined by suspending or fining them, but it is always a better idea to use a member as there will be some recourse if the builder does not do the job properly.

The Gauteng Master Builders’ Association has these tips for consumers to avoid a building disaster:

• Although you work on a budget, do not immediately accept the lowest price. Make sure that you ask at least two contractors to quote on the work and compare the tenders to ensure that both contractors have priced all items before you decide Compare all prices against each other to evaluate why one tender is cheaper than the other.
• Do not sign any documentation until you are ready to award the contract.
• Ask the contractor to specify in his tender, in detail, the materials that will be used and where to avoid disputes later on and prevent anyone from taking unilateral decisions.
• Never sign a biased contract. Contractors price some items provisionally, generally because they are unsure of the quantities involved or to allow you to choose other products. Make sure that tenders allow for the same provisional quantities and products. The Gauteng Master Builders Association sells standard building contracts which protect both parties. If a contractor provides his own contract you can be reasonably sure that the wording is biased in his favour.
• Read the contract. It is amazing how many people sign contracts without reading them and being aware of their obligations.
• Never appoint a contractor without checking his references. You must ask for references and check them, but do not do this only by phone. Go and see work previously carried out. Check whether the quality suits you and find out how the contractor treated his clients before signing.
• Never pay deposits without security. Contractors often request large deposits up front, but beware of these requests and ensure that the contractor provides security against absconding with the money.
• Do not pay when the contractor asks for it. Schedule payments in the contract and beware of making payments outside of that schedule. Also keep a record of all payments, including deposits and let the contractor sign for each payment.
• Keep a full record of dates and times of all decisions reached. It is normal for decisions to be taken during the contract to change original specifications, but before the contractor implements any changes, make sure he has supplied a price for the additional cost or saving for the change and keep a tally of all additional costs. You will be amazed at how quickly these extras can mount up in value and may exceed your ability to pay.
• Do not negotiate in good faith without documentation. All decisions should be in writing and priced and accepted by you before the contractor carries them out.
• Never accept poor workmanship. If you are unhappy with the quality of any portion of the work, insist that it is rectified immediately and not left for the plasterer or painter to fix or complete.

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The Consumer Protection Act

You can also take steps in terms of the Consumer Protection Act (CPA) and lodge a complaint with the National Consumer Commission (NCC) or the provincial office of consumer affairs.

Your protection in terms of the CPA starts at the agreement stage. According to Sections 48 and 49, your builder is not allowed to charge a price or set conditions that are unfair, unreasonable, or unjust. However, a price is not unreasonable simply because it is higher than the price another builder will charge.

The builder can also not require you to sign a contract that makes you give up your rights or that frees him of any liability, including death or personal injury of you or your family and friends. Building workers are protected by health and safety legislation.

The builder can also not limit his vicarious liability, which means that he is also responsible for any substandard work done by his employees or subcontractors, which includes taking on his responsibility to his workers.

In the agreement the builder can also not require you to sign if the terms are unfair, unreasonable or unjust. You can usually spot these terms if they are one-sided in favour of the builder and so unfavourable to you that it is unfair and unjust. Regulation 44 of the CPA Regulations gives a list of unfair terms you should beware of.

The builder can also not remove or restrict your legal rights or your right to fair compensation if he does not deliver and this includes your right to withhold payment if you have a claim against the builder.

He can also not make you sign an agreement that shortens the time of three years before your complaint is considered to be prescribed or force you to take responsibility for substandard materials, unless you buy them yourself.

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CPA also protects you from higher prices

The CPA also protects you against one of the major complaints consumers have against builders: that the price charged in the end is higher than the price originally agreed on. The builder cannot increase the price without giving you the right to cancel the agreement. The builder, on the other hand, cannot just cancel the agreement without giving you the same right to cancel.

The builder can also not change the terms of the agreement as well as the nature of the materials and the building without informing you immediately and giving you the choice to cancel the agreement. The builder cannot decide by himself if the materials or building correspond to the agreement.

Builders who do not complete the job in a reasonable time can also be taken to task in terms of the CPA. They are not allowed to make you authorise them to remove building materials from your premises. This is a very important stipulation, because it has been reported that builders remove building materials to use at other projects or when consumers withhold payment. Agreements must also be in plain and understandable language and no fine print is allowed.

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Quality work done in time

Builders are subject to Section 54 of the CPA that gives you the right to expect that the work will be done and completed in time and that he will let you know in good time if there will be a delay. This section also requires the builder to deliver quality work using materials free of defects and of the expected quality and leave your property in at least as good a condition as it was before the work started.

According to Section 56, there is also an unspoken condition that the builder guarantees that the work, including the materials used, comply with the requirements and standards of section 55. If the building work is not of good quality, you can expect the builder to fix any defect, or refund you a reasonable portion of the price paid.