Building a house or any other structure in Kenya is a huge investment that requires proper planning, budgeting and excellent execution. The type of building contract you choose can make a significant difference in the success of your project. In this article, we will discuss the different types of building contracts available in Kenya.
1. Lump Sum Contract:
A lump sum contract is a type of contract where the contractor agrees to complete the construction of a project for a fixed price. This type of contract is ideal for small projects where the scope of work is straightforward and well-defined. The contractor is responsible for all aspects of the project, from procurement of materials to hiring labor and overseeing the construction process.
2. Cost-Plus Contract:
A cost-plus contract is a type of contract where the contractor agrees to complete the construction of a project for the actual cost of materials, labor, and overheads, plus a fee for profit and risk. This type of contract is ideal for large projects where the scope of work is not well-defined, and changes in the project are expected.
3. Design-Build Contract:
A design-build contract is a type of contract where the contractor is responsible for both the design and construction of the project. This type of contract is ideal for clients who want a one-stop-shop for their building project. It provides more control and flexibility for the contractor to make design changes during the construction process.
4. Turnkey Contract:
A turnkey contract is a type of contract where the contractor agrees to complete the construction of the project and hand over the keys to the client upon completion. This type of contract is ideal for clients who want a hassle-free construction process and do not want to be involved in the construction process.
5. Joint Venture Contract:
A joint venture contract is a type of contract where two or more contractors come together to execute a construction project. This type of contract is ideal for large and complex projects that require specialized skills and expertise. Each contractor takes on a specific aspect of the project, and the project is completed jointly.
In conclusion, choosing the right type of building contract is crucial to the success of your construction project. Whether you go for the lump sum contract, cost-plus contract, design-build contract, turnkey contract or joint venture contract, ensure that the contract details are well-documented and clear to avoid any misunderstandings. Consulting a legal professional is also advisable to ensure that the contract complies with the laws and regulations in Kenya.