04 September 2018

The costs and complexity of building work continues to increase. Even simple extensions can now justify formal written contracts agreed with the assistance of lawyers. A property owners desire to ensure they get certainty on the duration and cost of the works leads to contracts that can be daunting in scope.

The architect can often be persuaded to provide contract administration services. However if an architect is not prepared to take the role there are other options.

The role of contract administrator is normally taken by a quantity surveyor, but almost anybody can do it who is prepared to put the time and effort into the administration of the contract in accordance with its terms. It’s tempting for property owners’ to cut costs by filling the role themselves, often with disastrous results. Helpfully, often this is not permitted by the contract terms.

The contract administrator, for a fee, will ensure payments are agreed for the work done, at the correct interval periods and not more, or more frequently. They also ensure that the contractual notices required to compel work, offer extensions of time, or variations in relation to payment are dealt with properly. They provide an administrative service that is of benefit to both contractor and employer, but they are paid for by the property owner and it is tempting to see them as acting for the property owner.

Which is not the intention.

Their role is not to drive the contractor’s price down, or interfere with how the contractor conducts the works. Any effort at either of these exercises would be both unreasonable and likely a breach of the contractual terms.

The larger the contract the more worthwhile professional administration of the contract is.

An alternative is for the property owner to appoint a project manager, instead of agree a main contractor. The project manager takes payment from the property owner and their role is to control the instruction of multiple contractors each of whom deliver specialised works, plumbing, bricklaying, groundworks etc.

Normally the project manager contracts only with the property owner and is tasked to control the works, drive them forwards and, where possible, reduce costs by gaining the best price for works/materials.

A property owner has far greater control over works where a project manager is engaged than when a main contractor is appointed, but they retain much of the responsibilities that a main contractor would shoulder.

Which leads back to the opening sentence of this piece and begs the question, when all work is expensive when can you afford not to know how your contract should be administered and when can you afford not to appoint somebody to do it for you.

The difference between the two options is that the contract administrator exercises control over the builder by reference to the contract terms, the project manager is the exercise of control over the works.

Depending on a property owners’ appetite for risk one option may be more suitable than the other.

If you have any question about the article or anything else related to building contracts and disputes please call Iain Cole on 01935 846465 or email and he will be happy to discuss your queries with you.