Getting from quote to sub-contractor agreement.
We're super excited to launch our ‘Think like a builder. Act like a builder' series of Q&A's with Neil because our intention is to get you doing exactly that – thinking and acting like a builder!
Neil's a Melbourne based builder who can be described as meticulous, thorough, super-experienced and above all, extremely willing to share his builder's brain.
In this series, we'll be structuring the Q&A's around each stage of the build but to start, we'll cover from quote to sub-contractor agreement.
Where to first Neil?
Before you start contacting trades for quotes, you first need to be clear on what you want quoted.
If you’re not clear, it will make it difficult for a trade to give a thorough and accurate quote.
Here’s a summary of Neil’s tips to get quotes:
- Make a list of trades required for your build.
- Once you know the types of trades you require quotes from, here’s what you’ll need to give them – a copy of the final plan; Building Specifications (more on specs below) and; the electrical plan for electrical quotes (a little on this below)
- You want to make sure that when you request three quotes, the information you provide is identical for all three. This will ensure you are comparing apples with apples when quotes come back.
- If you can, at the time of requesting a quote, know the estimated date you’ll have your permit and ask the trade to specify their availability around this date. Also ask them how long they’ll require.
A little info on the electrical plan
In addition to the final plan and building specs, you’ll need to provide a room-by-room electrical plan.
To do this, photocopy your plan and use the copy to mark the position of power points, lights, light switches and fans (if required) and any other electrical requirements specific to your home.
Be sure to include power points (single or double) for items such as the oven/cooktop, dishwasher and fridge. Even if the fittings have not yet been selected, the electrician will need to allow for labour cost.
Smoke alarms will be on the final plan as they’re compulsory by law.
BIG TIP: If this seems out of your comfort zone, ask for expert advice!
How about plumbing?
Plumbing is per the plan because it’s a requirement to get a building permit.
Okay Neil, what next?
Once you’ve received the quotes, it’s time to select. Some tips here are:
- Be prepared for quotes for the same trade to come in at different prices.
- Don’t always go for the cheapest! Do your homework.
- Ask the trade to give you a customer (or 2) to contact. This will help you get a feel for who they are and how good an operator they are – will help with your process of elimination.
- Also consider who you feel most comfortable with – this is really important. Ask yourself, who do I feel like I can communicate with better and go with your gut feeling.
- If you’re struggling to find trades e.g. plumber, electrician – ask your carpenter for recommendations.
- If you’re struggling to find a good tiler, ask the tile supplier you’re purchasing your tiles from to recommend a tiler.
Once an OB accepts a quote, what else should they ask?
It’s worth asking the trade if they can see any issues in the building specs that could cause a variation.
Bear in mind a concretor’s quote is likely to be subject to variation because every site is different and every sub soil is different. If it’s an easy dig, there should be no variation but if he hits a soft spot and needs to go deeper or wider, or things need to be added like extra reinforcement, this will cause a variation.
BIG TIP: Any variation that a contractor requests must be in writing and accepted by the OB. That should be spelt out in the sub-contractor agreement i.e. variations to be authorised before carried out.
How does an OB complete their building specs?
Go to a building association such as Master Builders Association and you’ll find they have their own Residential Building Specifications pro-forma booklets (for purchase). Natspec is also another organisation you can buy specs.
Building specs are general so an owner builder needs to customise to their build.
For example, specs for carpentry work can be straightforward – frame, lock up and fix. The specs will detail things like whether you’ll be using pre-made wall frames and a truss roof (which are easier for OBs to handle).
For electrical work, the spec will go through GPO’s (power points) how many singles, doubles etc, how many light switches etc. You’ve got to write it all down in the specs and give to the electrician (along with your electrical plan).
This will help prevent variations during the job.
Again, know what you’re doing. If you know, the trade will know.
BIG TIP: If specs seem too overwhelming, ask your Draftsman, Architect or Designer to point you in the right direction!
What else should an OB be mindful of when getting an A team together?
For me it’s about reliability and neatness of work.
(Neil strongly dislikes an untidy site).
A clean site is a good site and is paramount in building. It reflects on the tradesman that works there. If it’s clean when a trade arrives they usually leave it as they found it. Don't be afraid to ask this when you contact a trade's customer to a reference check.
When it comes to electrical work, keep in mind that if you go with a bigger business, it may guarantee that electricians will be there when they’re supposed to be there. They may cost a little more but it may be worth your while vs going with a one-man show as a one-man show might also do service work that they get called away to which means they’ll need to leave your job.
NOW FOR THE SUB-CONTRACTOR AGREEMENT
As an OB, you won’t be hiring a builder as such instead you’ll be sub-contracting out to various trades to get your house built and you’ll be supervising these sub-contractors – just like a builder.
Here’s a summary of Neil’s tips:
- You may well get a licensed builder who is happy to contract out and do carpentry work but he/she will still be under a sub-contractor agreement.
- A sub-contractor agreement should be done with every trade. This covers the OB as they’ll have it to fall back on if anything goes wrong. It will be a challenge with some contractors but that will need to be a consideration when an OB is making their decision of who to go with.
- Billing and payment terms will be in a sub-contractor agreement. Recommended payment term is 7 days but extend out if you can. The last thing you want is for a trade to finish the job and want payment straight away. It’s hard to get someone back to fix something once they’ve been paid.
- Attach the final quotation that the trade has supplied to the agreement.
- Have your wits about you when it comes to employing contractors.
- Both the OB and contractor should have identical copies of documents.
To get your hands on a sub-contractor agreement template, head to your state government site (find your state link here).
Well OBs, that's the end of our first Q&A. Want to join a thriving private Facebook community of Owner Builders click here.
QLD STATE GOVERNMENT ADVICE FOR SUB-CONTRACTOR AGREEMENTS
In Queensland, the Queensland Building Construction Commission (QBCC) recommends OBs use one of their contracts as it has the benefit of being compliant with legislation.
The QBCC states that ‘you can use a contract developed by an industry association but you must check that it complies with current laws’. If you opt to use an interstate contract (outside of where you’re building), be aware that they don’t usually meet requirements under Qld legislation.
The QBCC also warns about using your own contract and highly recommends you get legal advice first.