Letters: Lessons from CM insolvency

Thursday November 14, 2019 Published in Letters to the Editor
The CM Contracting truck on-site in Rarotonga. 19110620 The CM Contracting truck on-site in Rarotonga. 19110620

Dear editor,

Although it is too late for those people who have already lost their money, it is important for anyone building a house to get a lawyer to prepare a building contract before they pay anything.

 

A building contract provides for progress payments to be made to the builder as each stage of the building is completed.

If the owner is absent from Rarotonga then an independent person can be appointed to check completion of each stage.

Payment for materials is made when they are delivered on site, or if they are consigned directly to the owner (and not the builder).

An amount of 10 per cent of the contract price is normally held back until 30 days after completion to make sure the builder fixes up any final bits and pieces.

These terms provide basic protection for homeowners as well as builders.

Make sure you follow the terms of the contract, and don’t do silly things like allow the builder to have progress payments ahead of due dates.

The Sheraton Hotel is a good example of this. If your builder asks you to pay him $100,000 upfront, find another builder!

Reuben Tylor
Vaimaanga

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