Choosing and Using a Building Contractor

(This article is courtesy of Paddock Press - an ad-hoc free digital newsletter published to educate and update the sectional title community).

Building maintenance is an essential reality for anyone living in a sectional title scheme. All buildings suffer wear and tear due to the effects of wind, sun, rain and the activities of their occupants. Even buildings that have been built to the highest standard require needs regular maintenance work in order to maintain the building standard required by the owners and the Sectional Titles Act 95 of 1986 (“the Act”).

Section 37(1)(j) of the Act obliges the Body Corporate to properly maintain the common property, and keep it in a state of good and serviceable repair.

There are a couple of things you should keep in mind when choosing a good contractor for the job: The trustees, as the elected representatives of the body corporate, are the persons empowered in terms of the Act and the prescribed rules to choose a maintenance contractor for the scheme on the body corporate’s behalf. It is possible that the owners many give the trustees a specific direction at a general meeting, but more usually a majority vote or the trustees will determine which contractor is chosen. But the rules do exclude a trustees from voting in certain circumstances – Prescribed Management Rule 23 disqualifies a trustee from voting in respect of any contract or proposed contract in which he/she has a personal interest. This doesn’t mean that a contractor in which a trustee has a personal interest cannot be used to do the scheme’s maintenance; it simply means the trustee with the personal interest is excluded when it comes down to the vote.

Ensure that a least 3 written quotes, based on the same specification, are obtained for the job. It may be sensible to get more quotes, but getting at least 3 will ensure that the trustees have a good basis for comparison.

Once the trustees have an acceptable quote, they should ask the prospective contractor for references, ranging from work done when they started their business to projects they have just completed or are still working on.

With smaller contractors the trustees should try to obtain some indication of financial stability, perhaps in the form of a reference from a bank manager. Contractors’ financial situations can change very quickly and financial difficulties will almost certainly impact negatively on the level of service the scheme receives.

The trustees should try to obtain as much information as possible. It is not good enough if the contractor is only prepared to give the trustees a cell phone number. If possible, the trustees should go and visit the contractor’s premises to see where it is operating and how professional it appears. The bottom line – you are about to spend all owners’ money, so try to get as much information about the proposed contractor as possible.

Once the trustees have decided on a contractor, they should insist on a sighed contract. This contract should be very specific:

1. Explaining the detail what the job entails, no detail is too small
2. Tool and material storage, ablution facilities, rubble removal

3. Commencement and completion dates, daily work hours

4. Penalties if terms and conditions are not met

5. Breakdown of how money will be paid

The proposed contract should be tabled at a trustee meeting and two trustees should be specifically authorised to sign it as well as to authorise payments. If there are any clauses in the contract that the trustees don’t agree with they should put a line through them and all persons signing the contract must initial these and any other alterations.

It is advisable to stick as close as possible to the work quoted for. But during the course of the maintenance work, the trustees may find they need to request that the contractor complete extra tasks. Always ensure that these extras are quoted for and put in writing, as this will avoid conflict down the line.

In most cases, deposits are required. Although there is not a hard and fast rule, the following is a guideline.

1. 20% of the full contract price on the signing of the contract

2. 30% on delivery of material to the site

3. 30% can be used as “progress payment”, and

4. 20% should only be paid after completion and when the trustees are completely satisfied with the work done

5. In larger jobs that involve building from the ground up, a retention fund for defective work should be kept for at least 6 month after the job has been completed, this amount will normally be 10% of all payments made.

Maintenance contractors should ideally be registered with some form of regulatory body, these boards serve to regulate their respective industries and usually offer some form of compensation for defective work done by its members. For example, if your scheme is having electrical work done the trustees should ensure that the contractor is a member of the Electrical Contractors Association of SA. The Association regulates the electrical industry and guarantees to rectify defective work or materials on contracts by its members of up to R15 000.

This may sound like a lot of work, but it is far preferable to do the investigative work upfront, closely monitor the carrying out of the maintenance and be left with a good finished product, rather than rush through the planning stages and then spend a lot of time tracking down and fighting with contractors.