Building Contracts for Home Extensions: JCT, Fixed Price, and What You Actually Need

**The most common causes of building contract disputes in London residential projects**:

1. *Scope disputes*: 'That was included in the price' versus 'that was an extra' — where the original scope of works was not clearly defined in writing, both parties may have different (and honestly-held) views on what was agreed 2. *Variation cost disputes*: Changes to the design or specification during construction that are agreed verbally but not documented with an agreed cost; by the end of the project, the total of undocumented variations can be substantial 3. *Delay disputes*: Who is responsible for the delay — the contractor (poor management, not enough resources) or the client (late design information, slow decisions, client-supply items arriving late)? 4. *Defects disputes*: What constitutes a defect, who is responsible for fixing it, and by when? 5. *Payment disputes*: Non-payment for completed work; contractor walking off site; client withholding payment pending resolution of other disputes

A properly drafted building contract addresses all of these issues by defining: the scope of works; the contract sum; a payment schedule; a variation procedure; a programme and delay provisions; a defects liability period; and a dispute resolution process.

**The consequence of no contract**:

Without a formal contract, disputes are resolved under general contract law — which requires the court to imply terms from the correspondence, emails, and verbal discussions. This is expensive, slow, and uncertain. Even if you are clearly in the right, proving it in court without a documented contract costs more in legal fees than most domestic building disputes are worth.

**What a contractor's quote alone does not provide**:

• A written quotation is a contract offer — it states the work to be done and the price. But a bare quotation typically does not address:
• •The payment schedule (when interim payments are due and on what basis)
• •What happens if the contractor causes delay
• •What happens if the client makes changes (the variation procedure)
• •How long the contractor's defects liability lasts and what it covers
• •What happens if either party wants to terminate the contract
• •Whether the contractor has appropriate insurance
• •A dispute resolution mechanism

**JCT (Joint Contracts Tribunal)** is the industry body that publishes standard-form building contracts used across the UK construction industry. JCT contracts have been developed over decades and cover virtually every project type. For domestic residential projects, the most relevant JCT forms are:

• **JCT Minor Works Building Contract (MW)**:
• •Suitable for: straightforward domestic projects where the works are simple, well-defined, and the contractor is responsible for carrying out the works (not designing them)
• •Typical use: kitchen/bathroom renovation, structural alteration, basic extension where an architect or designer has produced full drawings and specifications
• •What it covers: contract sum; payment schedule (interim valuations at agreed intervals); variation procedure with contractor pricing and client approval; practical completion; defects liability period (typically 6 months); adjudication and arbitration for dispute resolution
• •Length: approximately 22 pages; designed for use without a lawyer
• •Cost: the JCT MW 2016 is available from the JCT website for approximately £40

• **JCT Homeowner Contract**:
• •Specifically designed for use by homeowners directly with a contractor (no architect required)
• •Simpler than the MW form; designed to be understandable by non-professionals
• •Suitable for: smaller domestic projects (extensions, conversions) where no architect is involved
• •Covers the key protections: clear scope of works attachment, payment schedule, practical completion, defects liability, dispute resolution by mediation
• •Cost: approximately £15 from the JCT website; comes with a Homeowner Contract/Consultants version for use with an architect

• **JCT Design and Build Contract (DB)**:
• •Suitable for: projects where the contractor takes responsibility for both design and construction (not just construction to an architect's design)
• •The building owner provides an 'employer's requirements' document; the contractor provides a 'contractor's proposals' document; the contract sum is based on the contractor's proposals
• •Most appropriate for: complex extension/conversion projects where RCB Design & Build is appointed as the design-and-build contractor
• •What it covers: all of the above plus design liability provisions; the contractor is responsible for ensuring the design meets the employer's requirements

• **JCT Sub-Contract forms**:
• •For use between main contractor and subcontractors — not directly relevant to the homeowner/client, but worth knowing that the main contractor should use appropriate sub-contract forms with their subcontractors

**When JCT is not used**:

Many London domestic contractors do not use JCT forms — they use their own standard terms, a brief written quotation, or nothing more formal than an email exchange. This is not necessarily dishonest, but it does mean the client loses the protection of a balanced, industry-tested document. Where a contractor is unwilling to sign a JCT contract, the minimum acceptable alternative is a written agreement covering the key protections below.

Whether you use a JCT form or a bespoke written agreement, the following provisions are the minimum for any significant domestic project:

**1. Scope of works**: A detailed written description of what is included in the contract price — either a full specification and drawings package, or a detailed scope of works document that lists every element of work to be done. Vague scope ('extension to rear of property') is insufficient — the scope must be specific enough that both parties have the same understanding of what is included.

**2. Contract sum**: The total agreed price for the scope of works as defined. If the contract sum is a fixed lump sum (the contractor carries the risk if the works cost more than estimated), this should be stated clearly. If any elements are priced as provisional sums (estimated costs to be confirmed when the work is actually defined), these should be identified separately.

• **3. Payment schedule**:
• Agreed payment milestones: what triggers each payment, how much each payment is, and when it is due. A typical payment schedule for a £60,000 extension:
• •Deposit/mobilisation: 10% on signing (£6,000)
• •Foundation complete: 15% (£9,000)
• •Structure/superstructure complete: 20% (£12,000)
• •Roof complete (weathertight): 15% (£9,000)
• •First-fix complete: 15% (£9,000)
• •Second-fix/practical completion: 20% (£12,000)
• •Release of retention after defects period: 5% (£3,000)

**4. Retention**: 5% of the contract sum withheld until practical completion, and 2.5–5% withheld until expiry of the defects liability period. Retention is the client's financial protection against the contractor failing to return and fix defects.

**5. Variation procedure**: No instruction for additional work should be given or acted on without a written variation order specifying: what work is to be done; the cost (agreed before the work is done); any impact on the programme. Verbal instructions for additional works are the most common source of end-of-project dispute.

**6. Programme and delay provisions**: A start date, a target completion date, and a provision for extending time where delays are caused by matters beyond the contractor's control (Relevant Events — adverse weather, late information from the client, statutory undertaker delays). The contract should specify that the client can claim for delay-caused costs if the contractor fails to complete by the extended date.

**7. Defects liability period**: Typically 6–12 months from practical completion. During this period, the contractor must return and remedy any defects arising from the contractor's workmanship or materials at no additional cost to the client. The second half of the retention is released at the end of the defects liability period.

• **8. Insurance**:
• The contract should confirm that the contractor holds:
• •Employer's Liability Insurance (compulsory if any employees)
• •Public Liability Insurance (minimum £2 million; £5 million for significant projects)
• •All-risk insurance for the works during construction
• Ask for a copy of the insurance certificates before signing — not the broker's letter, the actual certificates.

**9. Dispute resolution**: Adjudication is the statutory right under the Housing Grants, Construction and Regeneration Act 1996 for construction contracts over £1 (but there is an exception for 'residential occupier contracts' — where a homeowner hires a contractor to carry out works on their own dwelling, the statutory adjudication right does not apply). For domestic projects, the contract should include a mediation clause as a first step before litigation.

**RCB's approach**:

RCB Design & Build issues a written scope of works, a payment schedule, and a deposit invoice before any project begins. For larger projects, a formal contract document incorporating the provisions above is issued before the first payment is made. The commercial discipline of a properly documented contract protects both RCB and the client — and removes the scope for misunderstanding that costs both parties time and money.