Building? Why the specification document trumps them all
There is no user manual for all aspects of homeownership, from moving, to taking occupation and to maintaining and understanding common and uncommon defects. Albert van Wyk has more than 38 years’ worth of building experience and has put all he has learned into a concise, easy-to-use reference book entitled, The Proud Home Owner. He has granted HomeTimes exclusive access to republish portions of his book to help homeowners make better decisions around buying and selling, as well as maintaining their properties.
Documents on application of building loan
- Proof of income and employment, all the FICA documents and many other requirements that vary from bank to bank.
- Offer to purchase for the vacant stand, if applicable.
- A written quotation or tender from the builder who you have selected to do the work.
- A building plan (signed by both parties) not necessarily approved.
- A schedule of finishes and materials which will be used on the project.
Documents prior to registration of the bond
- Builder’s NHBRC registration certificate.
- NHBRC enrolment certificate of the house (not in all cases, but this is required before the first payment is made).
- Builder’s waiver of lien as well as the bank’s minimum specifications and other documents needed which differs from bank to bank.
- Builder’s all risk insurance policy on which the name of the bank must be recorded.
- Duly signed building contract.
The following might be required in the case of a new township:
Proof of township proclamation.
Approved surveyor general’s diagram, but the stands not necessarily pegged.
Proof that the township register is open.
Services certificate from local council. This entails that water, electricity, sewer, storm water and roads are installed and approved by the council.
Some of the documents could have been handed in already, because banks have different requirements.
- The contractor must sign a waiver of lien. This means that the contractor has no right to keep control of the property but the bank has control. In other words, the contractor cannot lock you out.
- Copies of the approved plans.
- NHBRC enrolment certificate.
- Builders all risk insurance policy for the contract sum; the bank must be mentioned in these documents as the mortgager.
- A document with the minimum building specifications from the bank, to which the building must comply.
- From your side, make sure that public liability insurance is in place.
- Engineer’s certificates for work done up to that stage, e.g. foundations, slabs or any structural work done.
What to expect from contract documents
- Certain contractors have their own contract documents, but documents are also available from NHBRC and other institutions.
- When a project is managed by an architect or an engineer, then they will insist that the JBCC (Joint Building Contracts Committee) documents be used. This contract is widely used by many professional people and has been successfully defended in courts because of it being very complex and comprehensive, and because of the fact that it is recognised by everyone.
- Take the time and study it before you sign the contract, or if in doubt get legal advice as it is not an easy contract to master. The abovementioned contract is the only contract which makes provision for retention.
- Download a building contract from gautenginspect.co.za
The specifications document is a separate one in which everything is specified to the finest detail, from the bricks and sand to the texture and colour of the paint and I would dare to say as important as the plan or even more important.
- Do not take anything for granted about what the contractor will do or not do, or even what he has promised to do. Rather include more items than forget to omit just one tiny detail.
- Do not leave any detail unattended to, because the confusion will cause unnecessary friction between you and the contractor and it will cost you
- Look at the house you are currently living in and make sure that you have detailed everything you can see in the room: plaster, paint, skirting, cornices, ceilings, door frames, doors, door handles and locks, architraves, lights, plugs, light fittings, cupboards, floors. Go through every room and ensure that it is all detailed.
- Keep a paper trail of all discussions with him or his supervisor.
- You can download a specification schedule from gautenginspect.co.za.
Let’s talk about money
Your budget must be your limit and should not be exceeded. The total construction cost of the building will always be more than the contract price, because of so many unforeseen and unexpected costs. You should allow an amount equal to 10% of the contract sum for contingencies because it will always be necessary to make some changes during the building project. However, do not disclose this to the contractor as he will find ways to spend it. Remember, it will be cheaper to have extra plugs and light points installed during construction than having them installed afterwards.
Must-haves in your budget
- The NHBRC enrolment fee.
- Architect’s fees.
- Plan submission and approval fee.
- Engineer’s fees, if not included in the building contract.
- Interim interest on your bond on the amounts which are paid to the contractor during construction.
- Relocation costs, curtains and some appliances.
Next time: How to pay for your new home