Choosing between hiring a professional contractor or doing the construction of the office by themselves is one of the issues that every investor ponders upon during the initial stages of the business. In this article, from the perspective of a legal consultant, we shall explain, from a legal perspective, what to keep in mind when choosing between renovating your office by yourself or by hiring a contractor.
If self-construction is carried out, investors can proactively find a suitable supplier of materials, and it’s also easier to control the quantity and quality of materials, and minimize loss and wastage.
Besides, this method also helps investors to actively supervise the progress of the construction without having to depend on other parties. It also gives the flexibility to make changes to the plan, depending on the actual situation of the company.
However, the disadvantage of doing it yourself is due to lack of experience in the field of construction, it is not possible to prepare drawings of the construction, electrical layout etc. In addition, due to lack of expertise, personnel in charge have to spend more time searching for information, planning, finding and evaluating suppliers, selecting materials and preparing related documents. During the construction process, problems such as damage to existing parts or additional unforeseen work may arise leading to loss of time and increased costs.
The investor must arrange personnel to monitor progress, coordinate workers in each item, purchase materials, and collect necessary documents. This could affect the current operations of the company and subsequently, those of the responsible personnel. In addition, there are limitations in the warranty and maintenance after construction.
Self-implementation is only suitable for partial renovations, or for offices with a small area, which do not require professional drawings. Large-sale projects need a team of architects and designers to supervise, and specialized machines to meet the technical requirements.
Hiring a contractor
There are many contractors you can find who undertake construction and renovation works. They have professional staff who can provide the necessary technical drawings and help customers plan and create construction ideas. In addition, these partners have a scientific and reasonable construction process, and professional supervision to help ensure that the project is completed in accordance with the proposed drawings.
Contractors usually offer packages, enabling customers to have a clear budget and avoid unexpected costs. Documentation is also prepared with such packages.
Nonetheless, the investor will have to pay additional service costs to the contractor. At the same time, it is more difficult to control the cost and quantity of materials needed for renovation. Therefore, the investor needs to carefully monitor and supervise the renovation/construction to avoid unnecessary expenditure.
In fact, hiring contractors is the method that most investors choose because of several advantages like convenience, elimination of risks etc. However, investors should act responsibly and carefully by:
- Evaluating the contractor’s capacity based on the previous projects of the contractor.
- Reviewing the construction contract: paying special attention to the terms of the construction progress, the contractor’s commitment to the schedule of the construction, and issues related to acceptance and payment. The payment should be made in installments respectively proportionate to the work that has been accepted. Contract penalty due to delay or violation of other terms in the Contract is also a provision that should be included. Please note that fines in construction field are different from fines in trading.
- If the contractor is also in charge of the supplying materials, investors need to pay attention to “product quality”. This means that the investor needs to set the standards required for the project. It shall include name, type, size, manufacturer, origin, and related technical standards. All these details must be recorded in the contract or attached appendix. At the same time, contractor’s responsibility to compensate in the event of not meeting the prescribed quality standards must be clearly stipulated in the contract.
- Investors need to carefully research and select reputable contractors. The company’s capacity profile, history of the projects taken-up by the company/contractor and possible other pros and cons of different contractors/companies must be taken into consideration to have an objective view and assess the contractor/company before making a decision.
Besides, investors should pay attention to cross-check and review the terms of warranty and maintenance after completion.
It is important to note that whether the investor chooses to construct the office by himself/herself, or hire a package contractor, construction insurance must be purchased and the corresponding deposit must be paid to mitigate the risks associated with construction.
Writing time: 10 June 2021.
The article is based on the current laws at the time of drafting as noted above and may no longer be appropriate at the time the reader accesses this article due to changes in applicable law and specific cases that the reader wants to apply. Thus, the article is for informational reference only.