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The Arbicon Guide to Householder Construction Contract Adjudication

Householder Construction Contracts are not covered by the Adjudication provisions of the Construction Acts and thus there is Statutory right to adjudicate without an agreement between the parties. There are also no strict procedural rules for householders to comply with other than what maybe agreed in the contract.

The HGCR Act 1996- (the Construction Act) at section 106 describes the contract type as that of the "Residential Occupier" and this is where consumers are excluded from the rights given by the Act in respect of payment and adjudication amongst other matters.

If the works relate to a property that you intend to use up to 65% of as your own private residence it is classed as a Householder or Consumer Contract.

If there is an Adjudication clause it must be fair and comply with Consumer Legislation. If the clause has not been individually negotiated with the Consumer there is a risk that the clause might be held to be onerous and void. To deal with this risk the Consumer must have either proffered the contract, used professional consultants in the contract procurement, consulted a solicitor or had the clause explained with evidence to comply with Consumer law.

If the Adjudication clause is deleted or there is no Adjudication clause, there is no contractual right to Adjudicate. An agreement to Adjudicate can be drawn up at any time, however both parties have to agree and there is no obligation to do so. The defending party is most certainly not going to agree to anything, thus in consumer contracts agreement is recommended at the outset.

The first rule for householders BEFORE engaging a builder to work on your home is to obtain professional advice from a firm like Arbicon. The procurement of the work must be carried out properly otherwise serious problems can and all too often do arise.

We receive countless calls from householders who have fallen out with their builder, who was their friend or close to them that has taken the money and run leaving an aftermath of destruction. In every case the victims have no contract in writing agreed with the builder and no adjudication clause. We also receive a lesser number of calls from builders who have not been paid. With no adjudication clause, the option is Court proceedings, which can take years and legal costs well beyond the value of the claim. Most householders do not have the resources or time to pursue the builder thus the matter has to be written off costing much more in rectifying the problems and misery.

When you buy a house you would never do so without professional help (solicitor, surveyor, etc), why would you spend a fortune on a builder who you must never trust without any professional help?

Here are 10 essentials you must do when employing a builder:

  1. Builder Identity, Credit worthiness Reputation Checks before you start.
  2. Written Contract properly drafted
  3. Payment Terms Defined - No advance payments or Front Loading of Charges
  4. Quality Control
  5. Work Complete and handed over on time
  6. Defects & Retention Procedure
  7. Design Insurance & Guarantees given
  8. Termination/Repudiation/Suspension Management if necessary
  9. Use Arbicon from start to finish to manage the process
  10. Adjudication Clause

Taking point 10 above a simple adjudication clause included in the contract can give the parties access to swift inexpensive justice whether too much has been paid or not enough!

If you are a householder or a builder in dispute please take your time to read the following FAQ's. Please do not hesitate to call us or e-mail us with any questions you may have the subject.

What is Adjudication?

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01733 233737 Peterborough

0207 406 1494 London

0121 262 4086 Birmingham