Contracts for London Home Extension and Renovation Projects: What You Need

A building contract is the legal document that governs the relationship between a client and a contractor during a construction project. Without a written contract, disputes about scope, price, variations, delays, defects, and payment are significantly harder to resolve — and significantly more expensive.

• **What happens without a contract:**
• Projects that proceed on the basis of a verbal agreement or a quotation letter alone often run into problems around:
• •Scope creep — the client expects work that was 'discussed' but not written down; the contractor says it was never agreed
• •Variation disputes — additional works are carried out but the client disputes that they were agreed or that the price was fair
• •Delay disputes — the contractor claims the delay was due to client changes or lack of information; the client claims the contractor was simply slow
• •Defect disputes — a defect appears after completion and the contractor denies responsibility; without a documented specification and defects liability clause, the client's position is weak
• •Payment disputes — the contractor demands payment faster than the client believes is due; without a payment schedule in the contract, neither party has a clear reference point

**The value threshold:** For a project worth £10,000 or less, a detailed letter of instruction and quotation acceptance may be adequate. For projects worth more than £10,000 — and certainly for any extension or loft conversion — a proper written contract is strongly recommended.

Several standard form residential building contracts are available in the UK:

• **JCT Home Owner contracts:**
• The Joint Contracts Tribunal (JCT) produces two standard forms specifically for residential works:
• •**JCT Homeowner Contract** — for straightforward residential works where the homeowner engages a contractor directly without a professional contract administrator
• •**JCT Homeowner Contract with Consultant** — where the homeowner has engaged an architect or project manager to administer the contract

JCT Home Owner contracts are widely used and cover all the key commercial provisions: price, payment, variations, completion date, defects liability period, and insurance.

**trade body consumer code contract:** The recognised trade bodies produces a consumer-focused contract for residential works. trade body member contractors are expected to use this contract form and to operate under the trade body consumer code, which provides an additional layer of consumer protection.

• **Contractor's own terms:**
• Many contractors use their own terms and conditions. Before signing these, check they cover:
• •Fixed or agreed price, and a clear process for variations
• •Agreed start and completion date, with any programme attached
• •Payment schedule (stage payments or monthly valuations)
• •Defects liability period
• •Insurance obligations (both contractor and homeowner)
• •Dispute resolution process

**Bespoke contracts:** For high-value or complex projects, a solicitor may draft a bespoke contract. This is typically warranted for projects over £200,000 or where there are unusual risk allocations (phased delivery, client-supplied materials of high value, listed building complications).

Regardless of which contract form is used, the following provisions should be covered:

**1. Scope of works:** The works should be clearly described — ideally by reference to a scope of works document or a set of drawings. Vague descriptions ('extension to the rear of the property') are not adequate. The scope document should be an attachment to the contract.

**2. Contract sum:** The agreed price should be clearly stated. If the contract is on a fixed-price basis, state that clearly. If it is on a schedule of rates or a provisional sum basis, explain how the final sum will be calculated.

• **3. Variations:**
• The process for agreeing variations (changes to scope) should be clear:
• •All variations should be agreed in writing before the work is carried out
• •The price of a variation should be agreed before it is instructed where possible
• •If the price cannot be agreed in advance, a basis for valuation (rates, daywork, or time-and-materials) should be stated

**4. Programme:** The agreed start date and completion date should be stated. Any float (built-in contingency) should be noted. The process for extending the completion date where the contractor is not at fault (client changes, third-party delays, force majeure) should be explained.

• **5. Payment schedule:**
• Stage payments or a payment schedule should be set out clearly. Typical stage payment structures for a residential extension:
• •Mobilisation payment (10–15%): on signing of contract
• •Structural completion (25–30%): on completion of structure to weathertight stage
• •First-fix completion (20–25%): on completion of first-fix M&E trades
• •Plastering completion (15–20%): on completion of wet trades
• •Practical completion (10%): on certified practical completion
• •Final payment (5%): on expiry of defects liability period and completion of all snagging

**6. Defects liability period:** The defects liability period (typically 6–12 months) should be clearly stated. During this period, the contractor is obliged to return and rectify defects that appear in the works at no additional cost.

• **7. Insurance:**
• The contract should specify:
• •The contractor's public liability insurance (minimum £2m, preferably £5m or £10m)
• •The contractor's employer's liability insurance (required by law)
• •Who is responsible for insuring the works during construction — typically the contractor holds a contractors all-risk policy. For an extension to an existing house, the homeowner's buildings insurance may need to be notified and an extension to works endorsement obtained.

**8. Dispute resolution:** A clear process for resolving disputes — adjudication, mediation, or arbitration — protects both parties. Under the Housing Grants, Construction and Regeneration Act 1996 (as amended), either party on a qualifying construction contract has the right to refer a dispute to adjudication at any time.

Before signing any building contract:

**1. Read the full document:** Read the entire contract before signing. Ask your contractor to explain any provision you do not understand. If you are uncomfortable with any clause, take independent advice before signing.

**2. Check the scope is complete:** Compare the scope of works in the contract against your understanding of what is included. Are there any items you expected to be included that are not mentioned? Check the exclusions list carefully — it is common for certain items to be excluded (client-supplied materials, landscaping, external works, items requiring third-party specialist contractors).

**3. Check the price ties out:** Make sure the contract sum ties out with the estimate or quotation you received. If there are differences, ask for an explanation before signing.

**4. Check insurance:** Ask your contractor for a copy of their insurance certificates before signing. Verify the policy levels and the expiry date.

**5. Notify your buildings insurer:** Before building works start, notify your buildings insurer that works are being carried out. Some policies require notification and may exclude claims arising from building works if the insurer was not told. An endorsement to the policy for 'works in progress' may be required.

**6. Agree the programme in writing:** If the contract does not include a written programme as an attachment, ask for one and attach it to the contract. A programme showing key milestones helps both parties track progress and identify delays early.