26.10.2017

Complete renovations and other contracts

From time to time a large home renovation can become topical for a private home owner. It may be for example a roof or drainage renovation. The subscriber of the renovation should pay attention to several things in order to take care of the renovation properly.

Often renovation starts by asking for bids from the contractors. It is important to provide the contractors with all the necessary information to avoid, for example, unexpected extra work. It is wise to receive the biddings in writing and compare them with each other.

It is profitable to make a written agreement of the contract. There are no actual formal requirements for the agreement of a contract, so the contract may also be agreed orally. However, verifying an oral agreement is practically impossible if the parties disagree on what has been agreed. A written and clear contract is an advantage for both of the parties in a dispute. On the other hand, the contract may consist of several parts, for example emails where the contract has been discussed.

It is possible for a consumer to make an agreement by accepting the offer made by the contractor. On the other hand, a separate works contract may be drawn up as well. There must be paid particular attention to the subject of the contract, in the contract agreement, in other words what the contract involves. Are all the necessary materials and work included in the contract price? What unpredictable may occur as the renovation proceeds? Also, the price and payment terms are important from the consumer’s point of view. When shall the contract be paid and in how many parts? Shall the entire amount be paid when the contract is completed, or little by little as the work proceeds? The consumer’s interest would be pay after the renovation is completed, but especially in large contracts this is often not possible.

Completing the work is particularly important when renovating prevents the use of entire house or the use of a bathroom. When is the contract to be ready and what will happen if the contract is not ready? Will the consumer get compensation for the delay and how much?

Consumer agreements are relatively broadly regulated by the Consumer Protection Act, which is, as a rule, a peremptory law for the benefit of a consumer.  Thus, the consumer has a right to invoke to legislation even though in the contract between the parties has been agreed otherwise. In any case, the consumer should agree on the matters in advance as accurate as possible. If the contract is accompanied by contractor’s general terms, the consumer should definitely familiarize/ get to know them before entering into the contract. By signing it, the consumer accepts the terms of the contract as a part of the agreement.

The consumer is entitled to an agreed contract with the agreed price. In general, the disputes that end up in court, relate to the outcome of a contract for which the consumer is unhappy for some reason. In the worst case, there occur significant construction defects in the work. Disputes may also concern delay of the work.

In case of dispute, it is important for the consumer to react in time and make a written complaint to the contractor. The defects of the contract must be identified in the complaint as accurately as possible. If the consumer doubts the quality of work, it may be wise to acquire a third-party expert as soon as possible to examine the outcome of the work and to share his or her own view.

As referred in the Consumer Protection Act a consumer may not invoke a defect if he/she does not notify the contractor within a reasonable time after the customer discovered or ought to have discovered the defect. The complaint should be done rapidly and the time of filing a complaint passes even when the consumer is not yet aware of the defect if, as a thorough person, he/she should have detected it. The consumer must inspect the outcome of the contract thoroughly after the work has been completed. If the defects are detected during the contract, they must be notified to the contractor without delay.

The concept of reasonable time is open to interpretation. Reasonable time can be considered as weeks rather than several months. If necessary, the complaint can be supplemented later if defects occur little by little.

In case of defect, the consumer has the right to withhold payment of the contract price, unless the remaining price exceeds the requirements that consumer would be entitled to because of the defect. In addition, the consumer has the right to require rectification from the contractor. The contactor also has the right to correct the defect on his own initiative. If the correction cannot be done for one reason or another, the consumer has the right to demand a price reduction, or ultimately dissolving of the agreement. The consumer is also entitled to compensation. Disputes concerning contracts can swell and legal costs can rise to several thousand euros for both sides. Reaching a reasonable understanding is often an advantage for both parties.

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