Write it down!

Are you using a written contract for every job? If so, why?

Firm: Little Pig Building
Principals: Nick Marer
Location: Port Nelson
Staff: 3 staff (including me)

Although we’re based in the Nelson area, we work across most of the top of the South Island – from Wakefield through to Nelson.

When it comes to written contracts, we’re about 50/50. New customers ALWAYS have written contracts, but when you get to a stage where there’s mutual trust, it becomes less important. However, it takes a while to reach that stage – I only feel comfortable not using a written contract for trusted, regular clients with whom I have an ongoing relationship and have done hundreds of thousands of dollars’ worth of work for.

At that point, they trust that I’m not over charging them and I trust that they’ll pay me the amount I charge them.

However, this trust really only applies to small to medium-size alterations or renovations. No matter how well I know a client, or how much I trust them, if I’m building them a new $500,000 home, we’ll be using a written contract. It’s just common sense, and it’s professional, which most home owners want to see.

Firm: Porter & Harper Builders
Principal: Clive Porter
Location: Hawera
Staff: 2 principals, 3 staff

While a lot of builders in larger centres may find it surprising, it’s pretty relaxed here in Hawera and, so far, we haven’t felt that we need contracts. We’re doing a $600,000 job at the moment, but we know the client has the money, so it’s not a concern.

I‘ve been working here for about 30 years, and my business partner grew up here, so we’ve known most of the people we work for and with for a long time.

The trust we have in most people, combined with good intuition, is generally enough to assess whether we decide to take on a job or not.

However, there’s no doubt that things are changing and documenting our work is becoming more important, so we’ll probably start using contracts some time in the not-too-distant future. There are also some cases where we’re already required to use them, such as when we’re working on educational builds.

Firm: Highmark Homes
Principal: Warren Whelan
Location: Alexandra
Staff: 23 employees (1 apprentice)

We use written contracts for all our work and, if I was a consumer, I wouldn’t work with anyone who couldn’t provide one.

For really small jobs, we use a single-page contract that has all the necessities, but for any work of significant value – alterations, renovations or new builds – we use the Registered Master Builders contract. By doing that, we can also offer the Master Build Guarantee.

We’ve used that contract since we became a Registered Master Builders company seven years ago, and before that we used a contract written up by our lawyers.

Before I started my own company, I was the general manager for a larger construction firm and we’d always insist on using written agreements.

In my view, it’s mandatory to protect both your client and yourself, and it’s seen as best business practice now, so clients should expect it. Most home owners welcome having a written contract, as
they see it both as a guarantee and a safety net.