Even before purchasing design documentation, you should think about selecting the method for constructing a single-family house. If you decide for “turnkey” construction, we recommend you order design documentation in 6 – 8 counterparts – “prints”.
The method of constructing a single-family home is based on the home builder’s financial capacity, time constraints and professional ability. We admit that if a home builder is professionally capable, it is possible for him or her to do the construction alone, chiefly saving the cost of construction labor that another home builder would have to pay to a construction firm. The person who is going to build a home has to be aware that if he or she is not a professional craftsman or cannot handle the construction trades fully, the work that is going to be performed will be far more time-consuming and, in such a case, he or she should consider whether more money would be earned at work during this period than would be saved by doing the work alone. A home builder would not anyway be able to avoid having some supplies professionally done, such as electricity, heating, gas, etc. In this case, the home builder would be accountable for any unprofessional handover of the above supplies and will not be able to obtain a warranty for the construction as a whole.
The main advantage of doing the construction yourself is that you are able to interrupt construction anytime and react flexibly to opportunities for financing it. If a home builder does not have the professional capability and his or her workload affords no opportunity to do a lot of work at the construction site, even though the opportunities for financing the construction of a single-family house are good, we recommend having the house “turnkey” built by a construction firm. This method, of course, costs more but also has several advantages. Usually, the house can be constructed quicker, with a higher quality of technical construction work performed, and the possibility of obtaining a warranty for the entire construction, usually 32 – 60 months.
In recent years, the most common method of constructing a building has been a combination of these methods, either through a construction contractor who manages smaller subcontractors and craftsmen from raw structure until completion. In this case, it is necessary if you are not a professional in this area to have a highly qualified construction supervisor who will be observing the quality and taking over any individual work. An overwhelming majority of construction firms who today offer turnkey construction do not have all the work done by their own staff and generally all professionals order work and set their prices to include a “management fee” or “procurement surcharge”, which runs from 10-20%. If you are a professional or have an excellent construction supervisor, enough time and good nerves, this money can be yours.
Once you have properly selected the land and chosen a home, standing in front of you is the third and most difficult task, choosing a turnkey construction contractor. At present, there are an inexhaustible number of construction firms who build single-family houses, from large construction firms to small-time entrepreneurs whose businesses are based on trade licenses.
The most appropriate method of choosing a construction firm is by competitive bidding. Our company will deliver you several sets of design documentation (counterparts) for a single-family house. Send one counterpart to selected contractors (at least 3) and ask them to quote you a price and the time for completing construction of a turnkey single-family house. In the quote, ask them not only to state the price and the final completion date but also the payment terms and conditions and, what is very important, also the warranty they offer for the entire project. Reliable firms currently provide warranties that run from 36 to 60 months. Any firm offering you an 18-month warranty probably has problems with the quality of the construction work performed. Be aware of the lowest prices quoted, since it often happens that a firm in trouble will quote the lowest price but will not be able to complete the project, bringing you no small problems. It is quite practical with quotations to also ask the construction firm for references to all construction projects it has completed in the last 2 years (a reliable firm will have no problem providing this information) and to talk at random with at least three previous home builders to find out how satisfied they were with the firm that had built their houses. You will find out in many cases that you will hear the opposite of what the representative had told you. Do not be disappointed, however, since there are a sufficient number of reliable construction companies today, so devote an appropriate amount of time to selecting a company. Check from as many sources as possible the construction company’s reliability, its current financial situation, the number of permanently employed staff it has and how long the firm has been operating in the market. Firms who have been in the market for five years but have changed their names and company identification number three times in this period probably do not have everything in order. A firm asking in its payment terms and conditions for an advance of more than 50% does not necessarily have to be supplying the entire turnkey construction, but is subcontracting some smaller supplies. Such a firm has mostly had poor experiences with the quality of its work and generally its customers, in many cases, are not willing to pay what they owe, therefore the firm wants to cover at least its direct costs.
Every reliable construction firm today builds from its own money and then invoices the work that has been constructed after certain stages are reached. The invoice should include not only the final price but also a detailed recapitulation of the work that was done, signed by the construction supervisor. Individual work stages and the price for each phase need to be agreed in the job contract. It is best to agree on the stages based on individual phases of construction recapitulated in the budget, such as earth-moving work, laying the foundations, vertical construction of the ground floor, horizontal construction of the above ground floor(s), roof trusses, etc. Any construction company which builds on its own money has declared it is solvent.
If you have chosen a construction company through competitive bidding, pay attention to having a proper job contract drafted, where the purpose of the job is exactly specified, at best with an extensive appendix where all items pertaining to the purpose of the job are stipulated in detail. To avoid any disputes about what was and was not the purpose of the contract, it is even better to have the project documentation attached, including all materials, technical procedures and a draft of all details.
A business trick quite often used by unreliable construction companies is to prepare for you an itemized budget which they attach to the job contract. You believe the price is excellent, the itemized budget is there and everything is in order. You select this firm and then in the end you discover there is more and more work appearing which the construction company somehow either forgot to include in the itemized budget or the item from the uncompleted budget was not clear enough, so it was not included. Finally, the firm invoices you all the items which were not included in the itemized budget i.e. the purpose of the contract and you learn the favorably low price eventually becomes the highest of all the quotes you received when you were selecting the contractor. Another trick often used is to have extra work done. This will certainly arise during construction. The contract should state that the price for additional work will be agreed in advance in a written amendment to the contract and only afterward can such work be done. If you do not take this step, you will become very surprised how fast the construction company will invoice you for extra work.
It is very important to exactly specify the way the work will be handed over and assumed, how any possible faults or defects will be corrected and unfinished work done, to define a complaint period and the exact method of making a complaint and include a time for feedback. It is very common outside Slovakia to have the final payment of approx. 5-10% deposited in a bank using a letter of credit for the construction’s warranty period. In the case of any legitimate complaint and failure to begin repairs within the agreed period, the building owner may ask another firm to correct or remove the defects and the bank will pay the firm from the amount retained in the bank, once records are submitted. Unless there is a complaint, the bank will remit the entire amount to the construction firm’s account after the warranty period expires. Unfortunately, we have rarely encountered in Slovakia such a reliably approach to resolving complaints.
Likewise, you should not forget to include in the contract which party covers fees for power and water used during construction as well as insurance for the structure. The job contract may have very many specifics, so it is necessary to have it drafted by a lawyer who practices in this area. Unfortunately, with enforcement of rights today, no really good contract can safeguard you from a legal dispute, where even though you win after several years, it does not necessary mean that you have actually won. Therefore, a job contract is necessary, even if the selection of the contractor has been conducted in a maximally responsible manner.