Building a home is a significant undertaking, requiring thorough preparation. A key part of this is drafting a construction contract. This legal document governs the relationship between the investor and the contractor, outlining their rights, obligations, and crucial construction timelines. What should a Croatian home construction contract include? Which clauses deserve special attention? How do you define the scope of a general contractor’s responsibilities and the investor’s rights? Is it worth including a warranty period for construction work? This article will answer these questions.
What is a Home Construction Contract?
This type of agreement, professionally known as a construction works, is signed between the investor – the person financing the project or their representative (e.g., a professional supervising the works) – and the contractor. The contractor can be a general contractor for single-family homes or a contractor working with subcontractors. It should always be concluded in written form. This contract serves as proof that the contractor commits to executing the building project in accordance with the attached architectural design, and the investor agrees to provide the necessary financial resources for timely project completion.
What Should a Home Construction Contract Include?
Given its breadth and complexity, a construction works contract should ideally be divided into several chapters. The first includes the details of both parties and a description of the subject of the agreement, including the scope of work. It’s best to describe this as precisely as possible, especially the expected state of the building upon completion – whether it will be a “rough construction stage” (roh-bau), “closed rough construction stage” (visoki roh-bau), or a “turnkey” (ključ u ruke) finish.
The next part of the home construction contract outlines the responsibilities of both the contractor and the investor. This section also establishes the construction company’s remuneration, significantly impacting the final home building cost. It’s also crucial here to specify who is responsible for the timely delivery of materials to the construction site. Inseparably linked with the rights and obligations of the parties are penalties for non-compliance with contract provisions or delays in project execution. If a contractor is unwilling to agree to such clauses, it might be a sign to consider working with a different company.
Construction Contract: What Clauses Deserve Special Attention?
Once we understand how to clarify fundamental issues like the home construction cost estimate, the construction schedule, and the scope of responsibilities for both parties, let’s delve into the details – elements that an investor should be particularly attentive to when signing documents in Croatia.
One critical aspect is the payment method. With a general contractor, this usually involves an upfront payment of a specified amount, which allows for smooth financing of a given construction stage.
Another crucial point is the possibility of introducing changes to the contract after work has begun. Sometimes, unforeseen factors (usually independent of both parties) arise, so it’s wise to allow for certain adjustments to the original agreements.
It is also highly advisable to specify issues such as:
- The warranty/guarantee period for home construction.
- Responsibility for costs associated with errors and detected defects.
- The right to investor oversight on the construction site.
- The responsibility for site clean-up after major works are completed.
- The client might also request a clause prohibiting the specific construction team from undertaking other projects concurrently, as this could negatively impact project timelines (this clause does not apply to a general contractor, who manages multiple projects professionally without compromising timelines).
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