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This is for a (labour + material) building contract and got a few questions:

a) what is the standard "defect liability period" in bangalore (to mention this in the contract agreement)?

b) is it a norm to pay the contractor the final payment only after the end of the defect liability period? In other words, if the defect liability period is 12 months, then you make the final payment after 12 months from the completion of the house?

c) what is the standard (if any) for the initial advance (in %) to be paid to the contractor?

thanks a ton in advance.

tendlu wrote:This is for a (labour + material) building contract and got a few questions:

a) what is the standard "defect liability period" in bangalore (to mention this in the contract agreement)?

b) is it a norm to pay the contractor the final payment only after the end of the defect liability period? In other words, if the defect liability period is 12 months, then you make the final payment after 12 months from the completion of the house?

c) what is the standard (if any) for the initial advance (in %) to be paid to the contractor?

thanks a ton in advance.

there must be several different formulae for this. But ours was, 10% of estimated cost for civil work to initiate the project. Once work commenced, billed as per material / labour costs (but the bills cannot be smaller than rs. 2 lakhs), and during each payment, you with hold a portion (for liability security) and deduct a portion of the 10% already paid. (to make it clear we had 5 running bills for the 1 year 2 months of construction period). So by the end of construction, all your upfront 10% paid has been taken care of, and you will only owe the liability amount. (that I think was 5% of the estimated cost - I may be incorrect on this number though). We waited for one whole year, so the house has gone through all the seasons for weathering / settling. The contractor fixed any issues (there were not that many) and we paid the balance.

Hope this helps.

Hi,
Could you share the copy of agreement that you have/are signing with the contractor?
I am starting construction and looking for a good agreement with the contractor.

Thanks and Regards