Understanding JCT contracts and the role of a PM

Engaging with a contractor to undertake works at your property? Have you considered a build contract for the works?

Property owners frequently put themselves inadvertently at risk by failing to ascertain a necessary build contract prior to starting their project. While works vary from project to project, examples can include structural alterations, new services, or cosmetic finishes.

It is imperative that both parties minimise risks to prevent project setbacks. These risks typically fall within one of the core categories; financial, contractual, operational, health and safety, and environmental. Issues from a contractor’s perspective can include failing to meet deadlines, errors in cost estimates, financial difficulties, and faulty materials. These can leave property owners out of pocket and behind schedule.

What are Joint Contracts Tribunal / JCT Contracts?

The Joint Contracts Tribunal (JCT) is one of the UK’s most recognised producers of standard forms of contract. Whether you are a residential or commercial property owner, the basic principle of a JCT contract is the same; it is a contract made between the ‘employer’ (property owner) and a ‘contractor’ to facilitate the process of constructing buildings. The JCT has a series of standard form contracts that are suitable for most construction projects and procurement methods.

JCT contracts are produced to provide two key services:

  1. Minimise the transaction cost of entering a contract
  2. Provide benchmark provisions in standard form contracts

What type of JCT Contract do you need?

Alex Hurn, Managing Director of Sillence Hurn Building Consultancy, explains: “A JCT provides protections that both parties deliver on what they have agreed. One of the most common types of JCT contract is the Minor Works Building Contract. While JCT does not set a value limit on the minor works contract, it generally applies to projects with a value of less than £250,000 or simplistic in nature.

"Other contracts are available depending on the size and nature of works. As with all contracts, the nature of the project is key to determining which contract is required. Things to consider include project length, client, contractor responsibilities, insurances, design management and risk appetite. Ensuring the correct contract from the outset can save time, control transaction costs, and distribute risks fairly between all parties.

Who can help with a JCT Contract?

Alex continues: “Understanding contracts is key. Property owners and developers should seek professional advice to ensure they are protected. The role of a project a manager or contract administrator can be invaluable, particularly if engaged from the outset. They will oversee the entire project, from drawing up all required contracts, arranging valuations, monitoring, ensuring final and practical completion certificates and then settling final accounts.”

Alex added: “When it comes to works on a listed property, Listed Building Consent will almost certainly be required. This should be completed pre-works. Typically, a building surveyor will arrange for all necessary form submissions and liaise with the local authority’s conservation officer. This can also be completed by a project manager or other competent person. If you are unsure of what you require, we highly recommend seeking professional advice as it is a legal requirement to seek Listed Building Consent if it is needed.”

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