The Building Process: Breaking Ground to Moving Day

This article is Part II of a two-part series that explains the building process. My aim by writing this series is to inform home (or land) owners building their own custom house about the building process, what to expect from their builder and what steps the building process entails.

In this article I will walk you through steps 10 – 20 of the building process. From when your builder “breaks ground” to the moment that you turn the key in the lock of the front door and finally get to make your custom-built house a home. I will give details about getting soil classification, registering the home build with the NHBRC, how progress reports, payments and variations are managed, inspections of the building, acquiring certificates of compliance, an occupancy certificate, and getting the final building snags fixed up. Your builder/ project manager will manage most of these steps but it’s important that you understand what’s going on and when things should happen.

Did you miss Part I?

In Part I of the series I discussed the first nine steps of the building process which include designing your custom home, getting a builder, deciding your budget, getting architectural plans and municipal approval, and getting basic utilities in place including electricity. Most of these first steps are driven by you as the home owner. Read the full article here: “What is the Process to Build a Custom Home: First Steps“.

PLEASE NOTE: I explained in my previous article that if you’re searching for instructions to actually build your house (from laying foundations to fitting the roof), this article is not what you’re looking for. What I will explain are the processes and steps that happen alongside the building of the house. You could call it the “administration” of the building process.

Part II

The Building Process Explained: Breaking Ground to Moving Day

Now let’s get into the good stuff! Remember that your building contractor or project manager will take charge of most of these steps but it’s important for you to understand what’s going on and why.

Your home builder will:

10. Have your soil tested and classified
11. Register the new home build with the NHBRC
12. Establish the building site and begin construction
13. Manage progress reports and payment schedules
14. Manage the variation order process in case of changes and amendments
15. Have the build inspected at key stages through the construction process
16. Complete the building process and acquire all of the necessary certificates of compliance
17. Manage the final account reconciliation
18. Apply for the Occupancy Certificate from the local building inspector

At this point your new custom home will be ready to move into! The final step in the building process comes one month after you have had occupancy of the house. You will:

19. Alert your building contractor of any snags that need to be rectified
20. Pay the final retainer amount

I will explain each step in detail below and offer advice based on our experience building custom timber homes in the Eastern Cape of South Africa, where Bosazza Roofing & Timber Homes is located.

10. Have your Soil Tested and Classified

“It’s not the beauty of a building you should look at; it is the construction of the foundation that will stand the test of time.”
David Allan Coe

Getting your soil tested and classified is 100% vital to the building process as it informs your builder about exactly what foundations or footings are needed to make sure that your new home is built to be stable and secure in the ground. The classification takes into consideration the make-up of your soil and how it is distributed around the land as well as how it reacts to the climate around it.

Samples of the soil are tested in a local laboratory and the results are sent to the assigned engineer on your project. This process is fairly quick and should take around 10 days.

Your engineer will design the depth and configuration of the foundations according to your plan and the classification results, to make sure that the land can accommodate your new homes’ structure. It is up to your builder to build the foundations to these recommendations. The engineer and building inspector will check this when he inspects the building at a later stage.

11. Register your New Home Build with the NHBRC

The National Home Builders Registration Council (NHBRC) is the regulatory body of the home building industry in South Africa. The organisation aims to protect home owners from rogue builders who build substandard homes, use substandard building materials or who do not complete projects which they have received payment for. The law in South Africa dictates that you must register every new home build with the NHBRC. You must also build your home using a registered building contractor.

Your builder will manage the enrollment of your new home build with the organisation but you will need to work with them to get together the supporting documents that are needed for the application. These include:

• Your certified identity document
• A signed and initialed building quotation
• The title deed for the land
• A valuation of the land
• A signed and initialed building contract between you and your builder
• EF003 form (provided by the NHBRC) which is for the registration of the building and the soil classification test results
• B1 form (also provided by the NHBRC) which appoints your chosen engineer

The enrollment process can take a few weeks to complete as often there are additional supporting documents required which can slow the process down. Be patient and assist your home builder in getting documents together as quickly as possible when they’re needed.

NHBRC Fees

Once all of the documents have been accepted by the NHBRC they will issue an invoice for the enrollment fee. To calculate the fees the NHBRC takes into consideration both the land value and the property value. We calculate a Provisional Sum for quoting purposes at around 1.3% of the entire value of the property, with a cap of R 34 000.00. The NHBRC provide an on line calculator to help work out your fees.

The NHBRC will provide an invoice for the enrollment fee which needs to be paid in full before they will issue the certificate.

Please note that your builder cannot break ground or begin building until they have the enrollment certificate from the NHBRC and if they do, they could face paying a hefty fine.

To check if your builder is an active member of the NHBRC visit their website – www.nhrbc.org.za

12. Establish the Building Site and Begin Construction

This step is all down to your home builder and it’s exciting to finally see something happening on site after your hard work so far! Expect to see site and safety signage pop up as well as a small site office and/or storage container. It’s important to have basic utilities in place by now so that your builder has access to electricity and water.

 13. Manage Progress Reports and Payment Schedules

As the home owner, it is important that you understand this step because it dictates when the builder gets paid and how. Your builder should run the process in a similar way whether you’re building with private capital or with a bond from the bank.

Pre-Building Expenses

The builder will incur costs associated with building your home before they even get to breaking ground. These costs include paying the NHBRC fees and handling the administration of the enrollment, paying for the soil classification testing and preparing the land for samples to be taken, as well as the engineers appointment fee. Your comprehensive building quote should list all of these costs (some might be Provisional Sums).

At Bosazza Roofing & Timber Homes we require a deposit to be made by the home owner to cover these expenses. If the deposit includes Provisional Sums they will be reconciled with the exact amounts at a later stage. Check out our article about the first steps in the building process to find out more about how provisional sums work.

If you’re building with private capital your builder may ask for an additional deposit to help with the purchase of initial materials to begin the build. If you’re paying with a bond the bank will only make payments on building progress.

Progress Reports & Monthly Payments

From here on you (or the bank) will make monthly payments according to progress on site. The builder will send you a progress report detailing the percentage of progress made on each task in that period. They may also correlate what materials they have on site. If you live near the site we recommend setting up a meeting to go through the report and make sure that you’re happy with the amount the builder is requesting.

If you’re building with a bond your builder will send the progress report to you and request that you get in touch with the bank to ask for a draw. The bank will send a representative out to site to inspect progress before they make a payment. This makes the payment process slightly longer.

14. Manage the Variation Process in case of Changes and Amendments

What happens if you change your mind? Or if the bath that you chose two months ago is no longer available?

Changes and variations happen often in custom home building projects. Sometimes this is because you as the client have a change of heart, it could also be due to availability of materials or an unforeseen issue that arises and needs to be solved in a different way to the original plan. We use the Variation Order process to handle these changes.

How does the Variation Process Work?

The Variation Process is an “open book” system. When something changes in the specification of the work that is being carried out your builder will get in touch with you to discuss it. They may offer a recommendation on what action to take next or they may need you to make a decision to allow them to continue working. The best way to explain this is to use an example.

We did a large renovation on a guest house in Chintsa for Mr. Parker. Our work included renovating various bathrooms and bedrooms. We had a concise quotation that was signed by both parties and formed our main works contract, but there were quite extensive changes to the scope of works along the way. These included items such as remedial work on a cement floor that we discovered was sagged and cracking when we stripped the original flooring out. We had to fix the original floor before going ahead with the planned work. We assessed the best way forward and advised our client of the work that needed to take place to allow us to install new flooring with a satisfactory finish. When we had verbally agreed on a way forward and the cost implications for this additional work, the changes were put in writing on our Variation Order. 

Additions & Omissions

The Variation Order itself reflects the original quotation with each work item specifically listed, along with it’s cost. Two extra columns are added including Additions and Omissions. When there is an extra task or item added to the scope of works (such as in the example above), the cost of this is put in the Additions column. 

There will also be instances when items or tasks are omitted from the scope of works. In our renovation at the guest house in Chintsa for example, the original scope of works included fitting built in cupboards in the pantry. Our client decided not to go ahead with this. The item therefore reflected in the Omissions column as a saving.

Balancing the Cost of Variations

Variations will always happen during a custom home building project and you should always be prepared for this within your home building budget. We include a contingency sum in our quotations to give clients a bit of lee-way when changes happen. If you do not have any extra budget to play with then you will need to make decisions along the way carefully. You may also need to have some flexibility in your expectations. Adding items will always cost more so if you add things, be prepared to take others out. 

When the specifications of work change during the building of your home, your builder should always make you aware of it. You should be able to keep a track of the cost implications on the Variation Order so that you have your “eyes open” and are a part of the process. 

Some home builders do not follow this process and run the building works under a “closed book”. Be aware of this as you may end up with a bill for extra costs that you are not expecting and have not budgeted for. 

Another important point to remember is that if you change your mind after the work is completed, you will be expected to cover the cost of stripping the original work as well as the total cost of the new work.

15. Have the Building Inspected at Key Stages During the Construction Process

It is absolutely vital that your custom built home is inspected at specific stages during the building process. This will give you total peace of mind that the structure is sound and will also allow you to get sign off certificates for the building. You will need these documents for insurance purposes as well as to sell the house in future. 

Your home will be inspected by several people including your nominated engineer, a specialist roof inspector and the local building inspector. Expect your home to be inspected at the following stages:
– During the process or upon completion of the foundations and base
– Upon completion of the wall and roof structure (before the roof is loaded or the internal walls are clad)
– Upon completion of the entire building project

All of our new homes are inspected by the ITC-SA – the regulating body for timber construction in South Africa.

16. Practical Completion and Certificates of Compliance

When your home is close to completion, the builder will invite you for a site meeting to identify any snags. Make a list with the builder so that they can work through each item. When these are finished the building has reached Practical Completion.

At this stage the builder also needs to obtain the following Certificates of Compliance (CoC’s):
– Engineers certificate
– Roof inspection certificate
– Electrical certificate of compliance
– Plumbing and gas certificates of compliance
– Glazing certificate
– Termite treatment certificate

Your builder should collect all of these documents as tasks are completed and the relevant parties are able to supply their sign off. Ensure that the original documents are available to you. 

17. Apply for the Occupancy Certificate

Your home builder can apply for an Occupancy Certificate once work is completed and the CoC’s are available. The local building inspector will make an appointment to visit the house and check that it has been built to plan, that it is positioned correctly on the plot and that all necessary CoC’s are in place. Basic utilities including water and electricity must also be in place. The house needs to be totally finished and ready to live in.

The building inspector will sign off on your new home and issue you with the Occupation Certificate.

18. Mange the Final Account Reconciliation

Now that work has been competed the final account can be reconciled. There should be a detailed account available. This will include the original agreed quotation amount with any additions or omissions, minus the progress payments that you have made to date. 

If you agreed to hold a retainer amount in your original contract this will also be taken off the account. It is between you and your builder how much the retainer is. General practice is to have a 5% retainer with 2.5% payable on practical completion and 2.5% one month after occupation. See points 19 and 20 for more information on this.  

Finally – your home is complete and you can move in! There are two more steps in the building process which come one month after occupation. 

19. Alert your Builder to any Snags that need to be Fixed

Checking a house for visible snags is one thing but you’re almost guaranteed to find other small snags when you actually live in the house. You have a one month period of occupancy to alert your builder to these snags and request that they be attended to. 

It’s important to note that occupation is officially taken as the date of issue of the Occupancy Certificate. If you’re not going to be living in the house yourself it is important to spend time in it and find any snags that might need to be attended to within the one month retainer period. If this is not possible, a special arrangement may need to be made with your builder with regards to the retainer.

20. Pay the final Retainer

When the final “living snags” have been fixed your home builder will invoice for the final retainer.

And our work here is done 🙂

Can you think of any steps that I’ve missed out of the building process? Do you have questions about any of the steps? Please comment below and share them with us!

Find out more about custom homes built by Bosazza Roofing & Timber Homes >