Word of Advice

21 April 2008

Building work and home improvements

With winter on the horizon you may be thinking about preparing your house for those long winter nights by making repairs or fitting double glazing.

But if you're getting building work or home improvements done, it can be hard to know if the company or contractor you’re using is being reasonable in their charges and services.

Quote or estimate?

Remember the difference between a quote and an estimate. An estimate is a price the tradesman thinks the work will cost, based on their past experience in that kind of work. It is not a firm offer to do the job for that price. A quote is an offer to do a job for a certain price.

Estimates are useful if you have never had to buy that type of service or product before and you want a ballpark figure of how much you are likely to be charged – e.g. getting a tap washer replaced or having a driveway laid.

The seller must use reasonable skill to provide the estimated price so that your decision to use the seller is based on sound information,

If you get an estimate and you decide to use that particular seller, make it clear before the work starts that you want to be informed if the final price is going to be higher than the estimate. If you can, get their agreement to do this in writing. Asking to be informed of cost increases will give you the opportunity to cancel the work before it costs you more than expected.

Once you have an estimate, and the work is likely to cost a lot – e.g. home renovations or building a fence – you should ask for the price to be fixed by getting a quote.

Agree before work starts

If you accept a quote, the seller has to do the work for that price. In most cases, it is best to ask for quotes in writing; if a problem arises you will have a record of what was agreed to. Before work starts, get a written quote showing:

• what work is to be done
• start and finish dates
• the hourly rate
• the cost for materials
• how long the quote is good for.

Quotes should include GST or state that GST is not included. Before you make any final payment make sure you are satisfied the work has been carried out properly and meets the terms of the contract.

Be suspicious if you are suddenly being charged for extra expenses. If you have agreed a price beforehand for the work, you should not have to pay for 'extras'. Don’t be embarrassed to ask for receipts. Sometimes unexpected extra work will be needed, but agree the additional costs in writing before the extra work starts.

Payment

Try to avoid paying deposits, particularly large deposits, and don’t ever pay the whole amount up front. There is a risk that the trader could disappear with your money and you will have less leverage over completion and quality.

But be fair about completion: pay promptly if everything contracted for has been completed to your satisfaction.

Paperwork

Keep all the paperwork which is given to you, including the invoice. Ask for a signed receipt for every payment you make - keep all the invoices and receipts.

More information

Visit Consumer Build [external website] - New Zealand’s independent resource for building, renovating and maintaining homes.

For consumer advice, visit the Ministry of Consumer Affairs website.