Law defines construction and reconstruction as work
Whether we’re discussing a flat reconstruction, painting the facade of a block of flats or a family house construction, both the customer and contractor will be bound by a contract for work.
Tip: If you’re lodging a claim regarding custom-made furniture where the seller provides both the material and manufacturing, then a contract of purchase applies.
Paragraph 2604 of civil law states that “the work is deemed complete once it has been finished and handed over.” But what can you do if the (re)construction shows signs of severe faults? The matter is further complicated by paragraph 2628 of civil law: “The buyer is not entitled to refuse the handover if the work shows only occasional faults that do not render the real estate unusable.” This article will guide you through such a situation. One of the crucial steps is to negotiate the conditions of the completion, handover and eventual claim in the contract itself.
1) Prevent problems, draft a detailed contract for work
In a standard contract, the contractor is bound to carry out the work and you’re obliged to take it over and pay the agreed price. However, in this instance that doesn’t suffice. Prevent problems and specify the work in detail, that is list each and every particular piece of work that is to be done, define its final outcome and say how much you’ll pay for it.
The price listing especially, is essential and we advise you to take great care here. Ideally, you’ll negotiate the successive payment conditions, so that only a completed piece of work is paid for, barring perhaps a previously paid deposit.
Solicitor advises: When the work is being ordered, many companies or self-employed tradesmen will argue that the law doesn’t require a written contract for work and that an order suffices. That’s true, however, since particularly a house reconstruction can prove quite complicated, it’s strongly recommended that you insist on a contract. In this case it holds true that the more detailed your contract for work is, the lesser the risk of eventual disagreements and legal actions. A good contract proves itself worthy no sooner than at the court.”
What else to include in a contract for (re)construction work?
- If your contractor intends to hire subcontractors, the contract should hold the company you hired fully responsible for their work.
- Ideally, the contract will list any and all participating subcontractors.
- Negotiate a schedule of the individual pieces of work. It’s also important to specify the conventional fines for not meeting the deadlines.
- Provide detailed work specification such as project documentation, where the materials and techniques will be described. If dealing with a large order, have a binding visualisation made.
- Negotiate the form and date of running work inspections as well as the handover of the completed work and include them in your contract.
- In our practice we often deal with situations when both parties forgot to agree whether the contract for work includes obtaining the required permits or carrying out preparatory work. This can be crucial especially if you’re constructing a house. Sometimes the devil is in the detail, for instance a parcel can be defined as a building site but may not house a building taller than 72 feet.
When (re)constructing, in most cases it would be to your disadvantage to accept a contract drafted by the construction company, craftsman or architect supplying the work. They will draft it in a way that will favour them in case of a dispute. However, prior to signing a contract for work with a craftsman or company, if possible have it examined by a solicitor who will be able to warn you of any discrepancies.
We’ll draft a bulletproof contract for work for you
A properly drafted contract will cost you far less than the eventual expenses for repairs of any faults. We can examine or draft one within 3 days.
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However, the work may still contain faults despite a well-drafted contract. Let’s have a look at your rights in such a case.
2) What steps to take if there are defects in the (re)construction
As mentioned above, by law you are obligated to take over the work unless the faults prevent (functionally or aesthetically) the house or flat from being used.
You have two options at this point:
- To take over the work without reserve,
- To take over the work under reserve – you’ll list them in the handover protocol in detail.
Tip: Never rely on a verbal promise to remove the defects. The contractor can only be held responsible for such faults that they’ve been notified of in writing during the handover or that have manifested themselves later on.
At this point we’re obviously dealing with manifest faults. With concealed defects (such as a leaking roof or the wrong type of cladding adhesive applied) you are entitled to lodge a claim within 5 years from taking over the work, unless specified otherwise in the contract. However, you should never postpone the complaint without a sound reason.
If you take over the work under reserve and list your objections in the protocol, you needn’t pay the price until the defects have been repaired, of course only unless agreed otherwise in the contract.
3) What can you demand from the contractor regarding the faults?
Here we must differentiate between a major fault substantively breaching the contract (i.e. if you had known about it in advance, you wouldn’t have entered into the contract at all) and a minor fault.
- Typical examples of major faults include using a wrong kind of material (e.g. a toxic material) or deviating from safety standards; both prevent the building from obtaining a use permit.
- A shallow scratch in the floor or an abrasion on a sealing classify as minor faults, as they can be fixed subsequently and don’t prevent the building from being used.
Minor faults can also include design inaccuracies unless the contract clearly states that these are deemed major defects. Sometimes the look of a railing in an Art Noveau style villa is essential.
On the other hand, so-called legal defects are deemed major faults. These can include the failure to obtain the building licence or omitting the fact that the developer owns only a part of the construction parcel.
When dealing with major faults, you may demand from the contractor:
- their removal,
- a discount,
- substitute work,
- or you may withdraw from the contract and demand a refund.
When dealing with minor faults, you are entitled to:
- their removal,
- a discount.
4) How much time do you have to file a complaint?
The law doesn’t specify any construction or reconstruction warranty periods. Therefore it’s essential to include everything in the contract for work or to obtain warranty in the form of a certificate of guarantee. By drawing a guarantee of quality the contractor certifies that the (re)construction will be fit for use or that it will retain its usual properties for a specified period of time.
However, even if the contract doesn’t specify the warranty, the contractor is responsible for concealed defects for 5 years from the time of handing over the work. Thus you’re entitled to lodge a claim within that term.
During our practice we’ve been dealing with e.g. rotten floors or other groundwork where the defects didn’t manifest themselves until a few years later.
5) What’s the term for handling the claim?
Handling the claim mustn’t exceed 30 calendar days, unless you haven’t agreed otherwise with the contractor. The fault must also be removed within this time period.
Tip: The term may be extended by another 30 days if the fault requires an expert opinion. These additional 30 days aren’t considered a part of the term.
In our practice we often deal with cases where the contractor doesn’t handle the claim within the 30-days term required by law and doesn’t even try to negotiate its extension. If this occurs, you have the right to demand a reasonable discount from the (re)construction price or to back out of the contract.
6) What to do if the contractor refuses to handle your claim?
If the contractor doesn’t reply in any way or refuses to remove the fault, you have the right to demand a discount and to enter into a contract of defect removal with a third party.
But before you do that, you’re obliged to notify the contractor in writing that you’re claiming your right to a discount. Take care to state the particular figure. This must come reasonably close to the difference between the price for a flawless piece of work (for example a tight-fitting window sealing) and the faulty piece of work.
In some cases, the repair costs can exceed the agreed discount. Then you may claim damages. However, the repair should be carried out in a standard way. For instance you may not claim an overpriced luxurious service if you originally ordered a standard quality.
Solicitor advises: “If your claim is justified, the contractor must compensate any and all expenses connected with lodging the claim. These typically include expert opinions supporting your contentions regarding the (re)construction defects.”
7) The construction company has gone bankrupt. What now?
Don’t be alarmed, such situations are also taken into account by law. Subcontractors may be responsible along with the contractor and so may the construction supervision or project documentation providers. It depends on the contract, but a remedy can often be demanded directly from these subjects. This takes us back to the importance of a flawless contract for work that lists all companies and individual self-employed tradesmen participating on the (re)construction.
The managing director or executives of the supplier’s company may also be responsible, but it depends on the specific circumstances.
Especially the last point, along with all the others, stresses the magnitude of the contract for work. It can either save you many a trouble, or it can discriminate you in favour of the contractor, who could botch up their work and get away with it. Start with the contract and have it examined by a solicitor before you sign it.