The problem of neglecting contractors.

Contractors leaving or abandoning jobs seem to be cliche stories today. Customers are left hanging as contractors run off immediately after the constructions complete or not even so. Nevertheless, one cannot simply avoid hiring contractors for construction services as it is a specialized job in which expertise is required. We ourselves do not have any knowledge of construction. The contract agreement proposed by contractors usually includes the term of annuity payment schedule. In other words, up front payment before work is done, one of the main causes leading to them abandoning jobs.

Today Invest:MaN recommends some quick considerations in building your own home or property.

Step 1: Before construction begins

  • Review the plan thoroughly. Pay close attention to the BOQ which will include a list of materials stating the amount of material, unit price. Separate the cost of goods from the labor cost if its match with the construction contract price as specified in the contract.
  • Any changes regarding the details of the job should be agreed in writing and updating in the contract as a safeguard. This will come in handy when clients wish to adhere to the additional costs reduced by the BOQ.
  • In the case of using bank loans, payment installments should be made according to loan payment schedule. Do not allow the contractor to take over the management of financing of the job.

Step 2: During construction

  • Clients without any knowledge of construction should procure someone with appropriate knowledge as consultant or even acting on one’s behalf to oversee the entire length of the construction operations.
  • Part of the required construction materials clients wish to procure themselves should be agreed in the BOQ attached to the contract. However, keep in mind that part of the contractor’s expense also incurred from coordination with their vendors or sub-contractors, hence, it is only fair to have sympathy for them and be reasonable when attempting to cut cost through self effort on finding supplies.
  • There is no perfect way of defining the disbursement of the job. Usually, it can be determined by measuring the amount of work in %, which requires specialized skill as a person with direct construction experience. Therefore, having a specified consultant to help take care of is advised.

Step 3: After construction finishes.

In an event where contractors abandon the jobs or refuse to put in extra effort as according to the client’s wish as the construction is completed, steps must be prepared to bring the matter to court’s attention. According to the Invest:MaN’s experience in such circumstances, the clients will be asked to prepare appraisal reports to be used as a written reference from certified public appraisers. The report must state the price estimation of the job which will then be used in the litigation decisions. Appraisal price according to the time of construction halt and the % completion of the job. Therefore, in an event like this, the smart move would be to appraise the job value to-date before hiring another contractor to finish the remaining job right away. The appraisal will become much more difficult when separating the works done of 2 contractors. The process of investigating witnesses is complex and will consume more time.

Invest:MaN hopes this will be helpful for people who are looking to hire contractors for their constructions.

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Independent Valuation Company Thailand

We provide property valuation services listed on the stock exchange and all banking institutions. We thrive to maintain performance standards and continually develop the property appraisal profession in Thailand to match that of the international level while upholding etical practices in which we instilled in our appraisers.

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