Why Produce Two Separate Documents for a Building Contract Review

When we review a residential building contract before signing, we produce two separate documents. That is deliberate. The owner needs one document to understand and manage the contract, and a different document to use in discussions with the builder.

The first document is the owner’s review. It is written for the owner to use privately. Its purpose is to explain how the contract works, what is likely to happen during construction, what the owner must manage, and where the main legal, technical and commercial risks sit.

That document helps the owner understand payment stages, approvals, selections, variations, extensions of time, communications with the builder, and the practical steps needed to manage the relationship during the build. It is also intended to help the owner understand what records should be kept, what approvals should be given in writing, and what issues should not be left informal.

This first document is not designed as a letter to the builder. It is a working guide for the owner. It gives the owner a clear explanation of the contract before signing and helps them understand what to watch during construction.

The second document is different. It is a discussion document that can be issued to the builder. Its purpose is to identify the points that should be clarified, completed, amended or discussed before the contract is signed.

That may include proposed changes to special conditions, incomplete documents, missing information, unclear allowances, exclusions, unresolved specifications, items the owner wants added, and issues that cannot safely be left unresolved.

Some matters are internal risk points for the owner to understand. Other matters need to be raised with the builder before signing. Combining both into one document can make the process harder, because the owner’s private risk assessment is not the same thing as the document that should be issued to the builder for comment.

The practical aim is to give the owner two useful tools. The first is a private guide to understand the contract and manage the construction relationship. The second is a focused discussion document that can be sent to the builder to deal with unresolved issues before the contract is signed.

This approach keeps the process clear. It helps the owner understand the contract, and it gives the builder a practical list of matters to answer, clarify or amend.