3 Types of Residential Construction Contracts

Once you know when to hire a builder in Wellington, the next thing you need to know is your different options for residential construction contracts.

Whichever way you go, there will always be significant costs involved for your new build or renovation project.

Watch what our past clients had to say about working through financial issues with Maridale Construction:

Three Residential Construction Contracts

1. full contract
2. labour­ only
3. managed labour­ only

Full Contract

A full contract is where the builder is the project manager and is also responsible for the entire new build or renovation. This option will relieve you of the majority of stress normally associated with a building project since there is one price that covers all the work and there is only one person to go to if there are any problems.

On this type of contract the builder is responsible for:

• managing the entire building project
• the builders labour
• all materials
• subcontractors
• working with the architect/designer
• arranging inspections

Brian managing the building project in lower hutt

With the full contract option it is especially important you hire a qualified builder who is experienced in project management and is someone who you will be able to work closely with.

Labour Only

Labour ­only building contracts is where the builder is only responsible for the building work and you are responsible to manage the rest.

This means you will have substantial responsibilities and will be liable for the compliance of the building work. Clear and concise contract documentation will need to clearly spell out the responsibilities for everybody involved.

Just some of the things you will be responsible for are:

• supervising the building work
• organising sub­contractors and materials
• the Health and Safety Plan
• precise communication of what is required and when

The time investment for you in this situation will be significantly greater than a full contract, so factor this time consideration into your planning.

Managed Labour­ Only

Managed labour ­only is a hybrid of the previous two types of contracts, where you have an independent 3rd party responsible for filling the project management role. This is normally done by your architect or designer or you may have an arrangement where your builder is the project manager and the designer takes on an overview role.

Again, whatever you decide, make sure each party’s responsibilities are fully spelt out in the building contract.
Note: As I mentioned earlier, some builders in Wellington can also help you in the design and planning process. If you require this service, please let us know here.