Hello,
I was wondering if anyone could tell me, when contracting someone to build a house for you. Can you stipulate in the contract for the builder to post a performance bond eg. of $20,000, in-case the building schedule blows out.
Is this done in practice. The reason I ask is that you often see building companies promise they will have the property at final completion say after 5 or 6 months, and then this blows out to like 9 or 10 months, costing the owner in extra interest, rent etc.
Cheers for any help
Normally you would include something in the Liquidated Damages section of the contract. it would allow you to insert a rate per day or week to compensate you for the delays in completion.
They are not the easiest to enforce as delaing with construction delays is a whole world on its own.
However that is what the LD clause is for and if the contractor runs over time without reason, you are entitled to claim the rate in the contract.
Hope this helps a little.
Regards
Neil
Cheers Neil,
Just thought there maybe a quick way to access the funds.
Cheers
liquidated damages are just that. The amount in the contract has to reflect the loss/costs that you will incur eg: additional rent, interest etc applicable if the work had been completed.
Remember that the builder can legitimitely have the contract extended for inclement weather or for variations.
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