What Type of Contract Should You Use for a London Building Project?

Most homeowners commissioning building work in London operate without a formal written contract — or with nothing more than a few quoted figures in an email. When a project runs to plan, this informality does not cause problems. When it does not — and in construction, things go wrong more often than they go right — the absence of a proper contract can make an already difficult situation significantly worse.

Why a Written Contract Matters

A building contract does several things that verbal agreements and email chains cannot:

• Sets out exactly what scope of work is included (and excluded) for the agreed price
• Establishes a programme and completion date, with provisions for delay
• Sets out the payment mechanism — when payments are due, how much, and what triggers release
• Defines the process for variations (changes to the agreed scope) and how they are priced
• Establishes what happens if there are defects — who remedies them and by when
• Provides a dispute resolution mechanism if the parties cannot agree

Without a contract, all of these questions are answered by the courts applying general contract law — an expensive, slow, and unpredictable process.

The Main Contract Options for London Homeowners

1. JCT Homeowner Contract (previously JCT Building Contract for a Home Owner/Occupier)

The Joint Contracts Tribunal (JCT) publishes a contract specifically designed for homeowner clients commissioning work on their own home. It comes in two versions:

• Without consultant: Where there is no architect or other professional administering the contract
• With consultant: Where an architect or project manager is involved on behalf of the client

The JCT Homeowner Contract is straightforward, written in plain English, and appropriate for most residential projects from extensions through to refurbishments. It is widely used, well understood, and supported by a dispute resolution process (adjudication).

Best for: Most London residential extension and refurbishment projects — approximately £20,000–£500,000 in value.

2. JCT Minor Works Building Contract

A slightly more detailed contract for projects where a consultant (architect or contract administrator) is administering the works. Provides more comprehensive provisions for interim valuations, retention, and defects management than the Homeowner Contract.

Best for: Projects with a professional contract administrator, typically from approximately £50,000 upwards.

3. FMB (Federation of Master Builders) Building Contract

The FMB publishes its own contract for use between homeowners and FMB members. Similar in intent to the JCT Homeowner Contract. If your contractor is an FMB member, they may prefer to use this.

4. Bespoke Contractor Terms

Many contractors use their own standard terms and conditions, which they ask clients to sign. These terms are written by the contractor and naturally favour the contractor. Before signing a contractor's own terms, have a solicitor or experienced contract administrator review them.

5. No Contract (Letter of Intent / Email Exchange)

Some projects begin on a letter of intent — a brief document confirming the intention to proceed, often while the formal contract is being prepared. This can be appropriate for very small works or where there is genuine time pressure to start. However, a letter of intent should always be followed by a proper contract before substantive works begin.

Key Clauses to Look For (and Insist On)

Whatever contract form you use, make sure it addresses:

Scope of works: The contract should incorporate or refer to a detailed scope of works document. Vague descriptions create disputes about what is and is not included.

Contract sum and variations: The fixed price should be clear. Variations (changes to the scope) should have a defined pricing mechanism — typically a day rate and/or requirement to quote in writing before proceeding.

Programme: The expected start date and completion date should be stated. Provisions for extension of time (where delay is caused by events outside the contractor's control) should be defined — otherwise, any delay is the contractor's breach.

Payment: The payment schedule should be agreed — either a fixed milestone-based schedule or interim valuations by a consultant. Avoid front-loading payments (paying a large deposit before materials are on site or work has begun).

Retention: Standard practice is for the client to retain 3–5% of the contract sum through practical completion, with half released after practical completion and the remainder released after the defects liability period (typically 12 months). This retention provides security for defect rectification.

Defects liability period: The period after practical completion during which the contractor is obliged to return and remedy defects at no additional cost. Typically 12 months.

Dispute resolution: A good contract provides for adjudication — a statutory right to rapid, binding interim dispute resolution under the Housing Grants, Construction and Regeneration Act 1996 (as amended).

RCB Design & Build

RCB issues a proper written contract for every project — setting out the agreed scope, price, programme, payment terms, and defects liability provisions before work commences. This protects both the client and RCB and is part of what distinguishes a professional contractor from an informal arrangement. Contact us to discuss your project.