Building a new home is an exciting journey that requires careful planning and consideration of various factors, including costs and timelines. When embarking on this adventure, it’s essential to understand the two terms that often crop up in the contract: prime costs and provisional sums.
Prime Costs
Let’s start with prime costs, which are the upfront expenses associated with completing a specific scope of work. These costs typically include materials, labour, fixtures, fittings, and other expenses related to the building process. As every project is unique, prime costs may vary depending on the size and complexity of the project. It’s important to note that if you end up spending less than the allocated prime cost for an item, your builder will reduce the final contract price accordingly. However, if you exceed this cost, you will be responsible for paying the difference.
Now, let’s talk about provisional sums, which are estimates provided by surveyors to complete a certain task. These costs are not yet known because the work in question is yet to be completed. Provisional sums can be used for items such as labour, materials, and any other expenses that may be incurred during the building process. This term is often used for large construction projects rather than ‘off the plan’ house builds, where the exact costs are hard to determine beforehand.
Provisional Sums
Provisional Sum allowances are often used for ground works in house builds, as it’s hard to know what the builder will encounter until they start digging. The builder will estimate things like how much concrete they’ll need and include a Provisional Sum allowance for this in the contract. If the full Provisional Sum isn’t used, the difference will be deducted from the final contract price, just like a Prime Cost. If it exceeds the estimate, you will be liable to pay the difference.
It’s crucial to work with a quality custom builder who can help you navigate the complex world of construction costs and contracts. At Conrads, we have the expertise and experience to guide you through every step of the process, ensuring that you are fully informed and satisfied with the outcome. Whether you are building your first home or embarking on a new custom build project, we have the knowledge and resources to make your dream a reality.
In conclusion, when building a new home, understanding the terms prime costs and provisional sums is crucial to ensuring that your project runs smoothly and within budget. By working with a reputable and knowledgeable builder like Conrads, you can have peace of mind knowing that you are in good hands. If you have any questions or want a walk-through of our process, timings, and costs incurred, please do not hesitate to contact us.
More information on why you should choose a quality custom builder such as Conrads can be found here – and here.
