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Decoding your contractor’s money talk

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Unsuspected budget extensions when building or renovating your home can be financially crippling. You could very well be left with a stomach ulcer caused by stress, half-finished kitchen and an empty bank account.

There are many reasons budget extensions are required by your contractor; this might be as a result of the project running longer than anticipated, increasing costs, or unforeseen damages and accidents, or a combination of all these factors.

As a consumer you can take steps to guard your wallet and sanity. Ensuring that the contractor is accredited by the National Home Builders Registration Council, asking for references from your contractor for previous work done and including a late-delivery clause in your contract to ensure you are protected in the case of time-delays are just some of the ways.

It is, however, also important that you understand what you are being told by your contractor. Whether written in contracts or said in passing one afternoon while you visit the site there are some terms that your contractor will use that directly affects your bank balance, best you cut through the jargon.

Five building mistakes that should never happen

Albert van Wyk, author of The Proud Home Owner and owner of Gauteng Home Inspections explains what your contractor really means when he says these seven things.

Bank’s minimum specifications

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Be the applicant your bank wants. Click the pic to find out how

All building work must be completed to at least this specification as required by the bank.


A Quantity Surveyor manages all costs relating to building and civil engineering projects, from the initial calculations to the final figures. Surveyors seek to minimise the costs of a project and enhance value for money, while still achieving the required standards and quality.

Bill of quantities

A bill of quantities is a document in which material costs and labour rates are itemised. A quantity surveyor will calculate the quantities from the plan and the tenderers must add their labour rates and material costs.

Here’s how to draw up a bill of quantities

Interim interest

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Want to know if you should put all your extra cash into your bond? Click the pic

This is the amount of interest charged by the bank on the progress payment to the contractor during the construction period.

PC amount

Provisional Cost amount or Prime Cost amount.

This amount is included in the contract when the quantity is unknown or which product will be used. It refers to material or goods to be delivered on site and does not include the cost of fitting or installing it.


This is the Provisional Sum, an allowance in the contract for work not defined, and for which separate tenders will be called for. This amount will include the cost of installing or commissioning a product or item.

Wavier of lien

The banks require a contractor to sign a document “Waiver of builder’s lien”. With this he waives his right over the building in favour of the bank. He has no right to retain possession of the building until he has been paid in full.


Mariette Steynberg is a qualified economist with a post-graduate diploma in financial planning. She has enjoyed working on holistic financial plans for clients in various stages of life, as well as a development economist assessing the socioeconomic impacts of new developments. When she is not working, Mariette enjoys parenting her quirky, delightful toddler girl. Cloth diapering, Eskimo kisses and the importance of reading to your child are all causes close to her heart. Mariette is passionate about financial education and hopes to use the experience she has gained to share knowledge with HomeTimes’ readership. Her goal is to provide information that is implementable by everyone.

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