The harsh reality is that this is a common occurrence in South Africa. However painful and tedious this seems, it is avoidable by properly vetting your contractor.
Tips to prevent yourself from falling victim again:
- CHECK IF THEY ARE A REGISTERED COMPANY
Being a fully registered company would make it more difficult to incur fraudulent transactions, as there would be a way to trace the company back to the owners.
- ARE THEY AFFILIATED WITH THE RIGHT COUNCIL?
The NHBRC (National Home Builders Registration Council) requires builders to register with them. Financial institutions ask for a valid NHBRC certificate for the builder contractor and the actual project when the first request for payment out of the building loan is submitted. If this can’t be produced, it should be raising concern with you, as the client.
- DOES YOUR CONTRACTOR CARRY INSURANCE?
South African Law as well as financial institutions requires all works undertaken by contractors be fully insured for the following:
- All Risk
- Third Party Liability
Any reputable contractor should fully insured, as per requirement by law. You can request this information from your contractor.
- CAN THEY SUPPLY YOU WITH REFERENCES?
Request a few references from your contractor and be sure to contact them. If possible, ask if you can come and see the work that was done. A contractor that is hesitant to provide you with references, is most likely hiding poor work, or a poor review from their client.
- REQUEST A SIGNED CONTRACT FOR THE PROJECT
A signed contract is binding. It also makes it easier for you, as the client, to have recourse, should any mediation or litigation take place.
- DO THEY REQUIRE FULL PAYMENT UPFRONT, OR A VERY LARGE DEPOSIT?
Even though deposits are the norm in certain sectors of the construction industry, large deposits or full upfront payments are not. A reputable contractor should not require more than a 10% security deposit from a client. With this being said, most reputable contractors would not require deposits, as made provision for in the Joints Building Committee Contracts (JBCC).