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THE BUILDING PROCESS
BUILDING BASICS

  • Overview
  • Finance
  • Contract Documents
  • Building Specifications
  • Cost of Building
  • Architectural Drawings
  • Building on a site
  • Project Management

Overview

There are a number of factors to be taken into account before beginning a building project, these range from finance and drawings to project management and building on a site. This section offers an overview of what one should be aware of, to ensure the basics are covered before the build commences.


Finance

Once you have decided to buy or build, the next step is deciding on a budget. Looking at a home loan, it is important to note that banks generally do not offer more than an 80% loan. Therefore, one must have at least 10-20% of the purchase price before approaching a bank for a loan. Banks do sometimes offer a loan of the full purchase price, but this is rare and the interest rate implications are very high. Please note that when purchasing a home, it is the seller’s responsibility to ensure that the municipal rates and taxes are paid up to date and all the necessary must be produced.

It is important to note that with building loans, banks are reluctant to offer more than 70% of the cost of the contract. The purchase price can comprise the land and cost of building. If the land is paid in full, this can be used as security for a loan for the cost of building. Before one is able to secure a building loan, plans must be presented along with at least three quotes from a reputable building contractor (the building contractor must present proof of all risk insurance cover, and NHBRC enrolment certificates), an engineers report is most often required – this can be obtained through the contractor, the design professional, or directly from an certified structural engineer. Coupled with this, one must present a comprehensive document outlining how and when the building contractor will be paid.

We can assist and refer you to a bond originator that specialises in securing loans from a range of financial institutions. Contact us today!

Contract Documents

There are various types of contracts to suit different circumstances and copies of contracts can be obtained from a range of institutions depending on the size and magnitude of the building project:
  • NHBRC (National Home Building Registration Council),
  • MBA (Master Builders Association)
  • JBCC Series (Joint Building Contracts Committee)
  • CIDB (Construction Industry Development Board)

Dial a Contractor can also provide you with a basic building agreement at a very reasonable price. Contact us today!

No matter how well a contract may be legally written, it is incomplete without specific information. This information, and most importantly, the specification described in Building Specifications, must be put into the contract by the parties concerned, as well as the building plans. We suggest annexing the following documents to the contract:
  • specification and drawings,
  • a clear description of what must be done and
  • the materials and services to be used.

How much will it cost?
The contract amount that will be paid at predetermined and agreed intervals.

How long with it take?
The contract period – a contract must allow for extension and should have a penalty clause. It is a good idea to employ the services of a lawyer to at least check the contract before signing. The legal fees compared to the average contract amount are negligible.

LIST OF RELEVANT CONTRACTS/ AGREEMENTS WITHIN THE JBCC SERIES AND FORMS:

THE PRINCIPAL BUILDING AGREEMENT (PBA)
The document is the cornerstone of the JBCC Series 2000. The Agreement is made up of nine sections starting with the definitions of all the primary elements and phrases. The next sections are ordered as closely as possible to the project execution sequence. State substitution clauses are listed in the penultimate section. The final section is a schedule of all the variables required to complete the Agreement The Agreement is designed to be used with or without bills of quantities. The building industry, like almost every aspect of modern life, does not stand still, and in the ensuing seven years JBCC found it necessary to publish three further editions – in 2003, 2004 and finally edition 4.1 in 2005 – to deal with changing circumstances.

The Nominated/Selected Subcontract Agreement (N/S) See Principal Building Agreement. The document covers both nominated and selected subcontractors and is modelled on the Principal Building Agreement with all common clauses retaining the same numbering.

PRELIMINARIES
The document covers all generally recurring aspects of preliminaries for most types of projects and therefore simplify tendering and administering of building contracts. Users should note that this document has been specifically formulated for use with all editions of the Principal Building, N/S Subcontract and Minor Works Agreements and maintains the same definitions and numbering style as are consistent throughout the JBCC Series 2000 and further editions.

MINOR WORKS AGREEMENT
The Agreement is designed for use where the works are of a minor and simple nature. The employer appoints a principal agent to administer the contract and direct contractors appointed for specialised work and installations that will not fall within the contractor’s responsibilities or liabilities.

ADJUDICATION RULES
Adjudication is an accelerated form of dispute resolution in which the adjudicator determines a dispute as an expert and not as an arbitrator. Adjudication is now the default dispute resolution process for the Principal Building and N/S Subcontract Agreements and these Rules are to be read in conjunction with the dispute clause of the Agreements. The State does not make use of this form of dispute resolution.

FORM OF TENDER
This document is for use with the Principal Building Agreement, Nominated/Selected Subcontract Agreement and the Minor Works Agreement. The form sets out the primary Conditions for Tendering, the Tender Sum and the tenderer’s choice of Preliminaries and Security options.

SITE POSSESSION CERTIFICATE
This certificate records the hand-over of the site to the contractor which is an act that is contractually signifi cant and should be formally recorded.

CONTRACT PRICE ADJUSTMENT PROVISIONS (CPAP)
Escalation adjustment based on a workable formula method rather than on actual cost changes simplifi es claims and accounting procedures. To achieve this objective it is necessary to agree on a “basket” of work groups and the weighting of the elements of the work group. The agreements require that the contract value shall be adjusted according to the procedure laid down in a CPAP listing the appropriate base month.

WAIVER OF CONTRACTOR’S LIEN
This form can be used for both the Principal Building and Minor Works Agreements and requires the provision of a Payment Guarantee from the Employer. The waiving of the lien by the contractor is of contractual significance.

Building Specifications

It is absolutely vital to create a comprehensive specification for any building project. To guarantee accurate costing, one cannot use general notes and specifications. As the word suggests, a specification contains specific information. For example, a door is not simply a door – it has a frame and furniture (hinges, handles, locksets) and can be made from a number of different materials.

To estimate the cost of a project without a specification is impossible and to enter into a contract without one is very short-sighted. Too many building contracts are entered into with vague information. The specification should form an integral part of the building contract. It is important to note that there is no such thing as a standard specification as no two structure are alike or use the same materials.

The format of the page and building process forms the basis of a specification. Each section and sub-section should be looked at separately and the information used to compile a specification for each particular trade or process.

For a small fee Dial a Contractor can assist with the preperation of a .

Cost of Building

We must categorically state that there really is no such thing as a standard building rate per square meter. Because no two structures are the same, no two building costs are the same. This does not just relate to the finishes in a building, as finishes on average only make up between 20 – 30% of the total building cost. Over the following pages, we demonstrate that design has a great infl uence on the cost of building, by taking two houses of different design and costing the project – the result shows two vastly different square meter rates, even though similar internal finishes have been specified. Below is a simple example showing four shapes, all 150m2 but with vastly different wall lengths.

It is obviously imperative to ensure that an accurate cost estimate is created before building commences. The more detailed a specification, the more accurate a cost estimate can be. For a very reasonable price we will assist you to prepare a in 24 hours or a .

Architectural Drawings

There are some basics that are required by all local authorities in terms of building projects. However, it is vital to check with your local authority in terms of what their specific requirements are before submitting drawings for approval. If drawings are not approved before building commences, the local authority has the right to stop all building activities and indeed, if the plans are not in accordance withtheir regulations, to order that the building be torn down. Please note that The Architectural Profession Act 2000, Act 44 of 2000 was published on 1 December 2000 and came into operation on 26 January 2001. This replaces the Architectural Act of 1970 which affects all persons practicing the architectural profession. Among other factors, The Act affects who is allowed to submit plans for approval. Please ensure that a registered architectural professional has signed off your drawings before submitting to your local authority. For more information on The Act and the changes affected please logon to www.sacapsa.com.

PLANS MUST BE SUBMITTED FOR THE FOLLOWING BUILDING ACTIVITIES:
  • Any wall 1.5m or higher
  • Drainage
  • Swimming pools
  • Any structure with a roof.
  • Any structure (when built) which deviates from the original plan must be re-submitted.

Please note that some plans, when approved, may have to be started within a year of approval and once started, may have to be completed within a specific time. Each plan submitted must contain certain information and this may differ slightly from area to area. Plans will need to be coloured according to colour codes specified by the local authority. All drawings should consist of as many plans, sections and elevations as may be necessary to indicate, where relevant, the position, form, dimensions and materials of the proposed building to be erected. Below is a list of the minimum requirements to be included on a set of working drawings.
  • Site Plan
  • Floor Plan
  • Elevations
  • Sections
  • General

It should be noted that working drawings (the drawings used on site) should far exceed the content of the plans submitted for approval. There are a number of drawings that some authorities don’t require, for example: roof plan and electrical plan.

Building on a Site

Building on a site is not simply a matter of fi nding a design and a site to suit ones needs. There are many aspects to consider and look out for; such as the gradient or slope, northern or southern hemisphere in terms of the western sun, entry, building lines and servitudes, view and shape. Climatic conditions determine the importance of orientation.

The combination of all these aspects on a site is more complex than one would imagine. Also take time to check out the soil conditions on the stand chosen – certain soils can pose difficulty for building and may also pose landscaping difficulties, adding costs to the build. Remember to check if the site chosen is in a proclaimed township and what municipal services are offered (for example, some areas do not have rubbish collection services). Also check what the rates and taxes are for the area as this will become part of the monthly cost of living and will be due for payment on transfer of the property. Our book Home Plans for Southern Africa – ISBN: 0 – 620 – 34919 - 0, offers examples of how to address the issue of site differences by stepping or orientating a design to suit the site.

One must take the following into account when choosing or building on a site:
  • Gradient or Slope
  • Entry
  • Building Lines & Servitudes
  • View
  • Shape

Project Management

Project management entails planning, organizing, co-ordinating or scheduling, controlling and directing the activities of a project. Project management can also be regarded as a planning and control mechanism for using resources to achieve specific objectives. As with any project, good organization and management are essential elements in ensuring the success of a project. From a simple check listm to computer programmes, there are various ways in which to ensure the smooth running of a project and tracking when, where and how activities are to be completed. Project management is also about overcoming obstacles which are numerous when involved in the building of a home, like unrealistic expectations of the owner and the limited number of skills available within the industry.

Project management has three critical elements: time, cost and quality. These elements interact constantly and a balance must be established and maintained between them. Remembering if time and cost receive priority, then quality will be neglected, and vice versa. The reality in South Africa at present is the emphasis on time and cost, resulting in many poorly built homes, which is compounded by the lack of skills.

For a small fee Dial a Contractor can assist with appointing an
 
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