Constructing a house is an extremely important decision in anyone's life. There is a lot of planning that goes into the execution of any construction project whether small or large.
A lot many factors one has to consider while planning to construct a house. These crucial factors are often overlooked due to improper planning.
The factors you should keep in mind when choosing to construct a house are :
- Construction Cost
- Quality of Construction
- Timeline of Construction
Constructing a house generally involves the following activities
- Engineering (Architecture, Structure design, Electrical & Plumbing design etc.,)
- Liasoning (Site Plan approval, Electricity & Water connections, etc.,)
- Procurement (sourcing raw materials, tools and tackles etc.),
- Construction (hiring la-bour, quality control on various jobs to ensure that the work is completed as per specification)
After putting all the important points and considerations on paper , the next step is to choose the contract type of how you wish to get your house constructed.
There are different types of contract that a homeowner can choose from. Each of these construction types have their own set of advantages and disadvantages.
In this particular blog we discuss in detail about the two primary contract types that are Trunkey and Labour Contract and which is better and a wiser choice.
Turnkey Contract or Lump Sum Contract
In Turnkey or Lump Sum Contract the complete responsibility of Engineering, Liasoning, Procurement and Construction is given to a contractor. Generally homeowners prefer to give construction projects to Turnkey contracts only. Where the agency is completely responsible to carry out the construction.
Before you give the contract to a Turnkey contract you must list all the essential requirements like materials specifications, external and internal finishing etc., to the contractor. According to the material requirements and detailing tobe imbibed during the construction, your contractor will quote a price per square foot of build up area depending on the specifications. This rate usually includes all the work till the project is completed.
Advantages of a Turnkey Contract:
- A turnkey contract ensures that all the responsibilities during the construction lies with the contractor, which saves a lot of time for the homeowner.
- The homeowners have to involve a lower risk as all the tasks are performed by the contractor itself.
- Since the contractor completes the whole project within the brackets of the previously quoted price, there's no chance of variability at any point of time during the construction.
Disadvantages of a Turnkey Contract:
- If you wish to quantify or inculcate some changes in the designing and execution after signing the contract, you might not be able to do that as the signed contract already encompasses the materials according to the specifications which has a set price that can not be changed or reformed.
- The project is supposed to be designed completely within a given set of timeline.
A labour contract is one in which only the labour has to be involved to undertake the construction of the project. The other added responsibilities like the requirement of material and other needs has to be taken care of by the homeowner itself.
On contractor’s suggestion the materials have to be procured by the homeowner to the labours. The payment in such contracts is done on a weekly basis as the work is done by the daily wage workers.
Homeowner has to take complete responsibility in such cases for the completion of the project. The homeowner has to involve and participate at every single step of the whole construction process to involve effectiveness and quality of work throughout.
Advantages of a Labour Contract:
- Overall construction expenses could be managed as the homeowners can save money on material purchases.
- Easy to compare quotations given by different contractors.
- Any in between changes in the contract could be safely executed by the owner.
- Least risk for the contractor as the project is completely handled by the homeowner.
Disadvantages of a Labour Contract:
- Contractor has no incentive to effectively utilize the construction materials. Wastage of materials could be involved.
- Contractor might sometimes blame the defects and discrepancies caused on the workers. s
- Hard to determine the total cost of construction.
We hope the above comparison helps you decide which type of contract works best for you and accordingly you can choose to give the construction project of your dream house to the right contact service.