Construction plans? Good agreements make all the difference.
The Curaçao housing market is on the rise and with it, the number of renovations and new construction plans is also increasing. Whether you want to realize an extra bedroom, renovate the kitchen or a complete renovation: sooner or later you will meet with a contractor. All too often an offer is then quickly signed, with the idea: "So, that's settled", but in practice this is where it often goes wrong. Signing a contract seems like a formality, but if you are not careful, you can soon be in for a surprise.
The contracting agreement
Contract for work is referred to in Article 7:750 of the Civil Code ("BW") as an agreement whereby one party, the contractor, undertakes to the other party, the client, to construct and deliver a work, for a price in money to be paid by the client. Behind that simple agreement lie countless questions. What happens if construction takes longer than agreed? Who pays for rising material costs? How will additional work be handled? And what if the work is defective? Many conflicts arise because nothing or too little was agreed in advance. Then the law applies, but it does not always match what the parties had in mind.
The quote
A common mistake is to think that a quotation offers sufficient security. Quotations are often brief, they contain a price and a general description, but rarely concrete agreements about, for example, the planning, additional work or liability. Legally, an agreement is established by an offer and its acceptance (Article 6:217 of the Civil Code). The offer qualifies as an offer and after acceptance the contract is concluded. Nevertheless, it is wise not to leave it at an offer, but to lay down additional provisions in a (contracting) agreement. After all, laying down exceptions and unforeseen circumstances can prevent much discussion.
Deadlines and partial deliveries
Anyone starting a construction project knows that time is money. Nevertheless, deadlines are still often agreed on too vaguely: "within three months after the start" and "delivery in the fall" are common provisions. Article 6:83 of the Dutch Civil Code stipulates that exceeding a fatal deadline constitutes immediate default, without the contractor having to be given notice of default. It therefore pays to include fatal delivery dates in the building contract. In addition, it is advisable to divide the work into several phases and agree on partial payment for each phase - preferably after delivery of the work. An inspection can then take place after each phase and, if approved, another partial payment can then follow. This way it often becomes clear in time whether the planning is still feasible and whether the completed work is of good quality. Payment after each phase can also be an incentive to complete the phase, so that the work does not linger too long. Including a penalty for exceeding a construction deadline can also be an incentive for timely compliance.
Additional work
Additional work regularly causes surprises and discussions in practice. Pursuant to Section 7:755 of the Dutch Civil Code, the contractor must warn the client in a timely manner about necessary extra work and the resulting price increase. If he fails to do so, the client does not have to pay for it. The law states that this may not be deviated from to the detriment of the client. In practice, it often happens that a contractor does extra work and presents the bill afterwards. Clear agreements about additional work can prevent such discussions and problems.
Liability for subcontractors
A contractor often hires subcontractors, for example for installation work, the electrics or tiling. According to Article 7:751 of the Civil Code, the contractor may have others perform the work under his direction. He may also leave the direction to others. However, this does not affect his liability for proper performance of the contract. This is reassuring for the client: the contractor is responsible, even for the subcontracted work. Should something go wrong, don't be tempted to get into a dispute with the subcontractors yourself. Let this be the contractor's responsibility in order to avoid misunderstandings and discussion about instructions given.
Completion and final inspection
A crucial moment in the construction process is delivery. Article 7:758 paragraph 2 of the Civil Code stipulates that at that moment the risk passes from the contractor to the client. After delivery, repair can no longer be demanded for defects that the client should reasonably have discovered at the time of delivery. Therefore, put any defects in writing at the final inspection. You can prepare a completion report - preferably with photographs - jointly with the contractor. Make sure that prior to construction, the contract already stipulates the period within which the inspection will take place and defects must be remedied. This prevents later discussions.
Conclusion
Anyone hiring a contractor would be wise to look beyond the signature on a quote. It pays to make clear agreements in advance about the price, deadlines, additional work, subcontractors and delivery. This may cost some extra time, but it prevents expensive and drawn-out procedures afterwards. It is much more fun to raise a glass with your contractor after completion than to see each other again in court, isn't it?
Do you have questions about your contracting agreement? Or would you like to have a model agreement drawn up as a construction company/contractor? We would be happy to help you!
Contact us at terpstra@stlegalsolutions.com or +5999 5121325.