We’ve all heard the horror stories of tradesmen who disappear in the middle of a project or clients who refuse to pay workers at the end of a job. The good news is, there’s a way for both sides to protect themselves.

For jobs under $15 million, an Agreement for Minor Works (Building Works) is a good idea. It’s an easy-to-read 18-page document prepared after the terms have been negotiated.

“When both parties sign, then you take it to the Stamp Office and have it stamped [for a small fee]. When it is stamped at the Stamp Office, it becomes a binding legal document between the parties,” vice-president of Incorporated Master Builders Association of Jamaica Paul Williams told the Jamaica Observer.

He provides details about the agreement in this Q&A:

What are some of the areas covered in the Agreement for Minor Works?

Paul Williams (PW): “There are eight sets of clauses which address the obligations of the parties: the contractor’s obligations [and] the employer obligation. It sets out who is running the contract. It sets out, most importantly, dates for start and end. If the period of time is to be extended, it sets out how it can be done.

“If there is not completion within the period of time, it sets out if and how charges can be assigned. For example: We agree that this is the period of time that these works must take, I wanted this part of my house for rental so I am forgoing income. You have to pay me an amount agreed upon until you finish, because I’m losing income. All of this is preset at the signing of the agreement, so all parties are aware from the beginning.

“One of the other critical clauses in the agreement is what we call a defects liability period. At the end of this agreement, the contractor still will have some responsibility to ensure that what he has done works. So if it’s a bathroom faucet or a full bathroom that he has done, if it goes bad within the time frame agreed, he has to come in and fix it at his own expense — unless the owner has done something with it that he is not supposed to do.

“If there is variation in the cost, where things are over and above what both parties agreed to, there are clauses to state how that would be treated and how the monies for that would be treated. Of course, it would treat with payments and progress and those inconsistencies in numbers and the mechanics of contract.

“If there are any major changes in material costs, there is a set of clauses for fluctuation. For example, during the period of COVID-19, the price for lumber rose by 300 per cent — afterwards the price started going back down. If there’s a special circumstance like that, then there is a clause to cover the party that would be negatively impacted because you would have both agreed [that] this is how much the job is going to cost. Neither party expected any significant material in it to jump by a significant amount.

“The agreement also covers the issue of termination. If the employer wishes to terminate the contractor, there are clauses for that. But it’s a balanced contract; so if the contractor wishes to terminate the employer, there are clauses for that also.

“And at the end, if there are disputes, it sets up for adjudication and arbitration.

“It’s a comprehensive document without going through all of the long legalese, because it’’s worded in a way for simple usage. You don’t need a lawyer to go through it,
per se, because it’s worded fairly simply. It should be easily understood by both sides.

“It is recommended for values up to $15 million. If we go above $15 million, then it’s recommended that you use a bigger form of contract.”

How widely is the Agreement for Minor Works used?

PW: “It’s used extensively, but I think it is primarily from those of us who are part of the industry. People in the industry will insist that we sign some kind of agreement. It is usually people who are not really a part of the industry who will tell you, ‘Oh, let’s go ahead without any agreement signed’.”

Is this agreement something that should be used by a homeowner who is hiring someone to redo his house?

PW: “Yes, it is something that we recommend that you employ. In today’s Jamaica, a regular refurbishing for a two- or three-bedroom house would cost you about $5 million and above. It is definitely recommended that you utilise the agreement.”

Who created the agreement?

PW: “The Construction Industry Council (CIC), which comprises members from the Jamaican Institute of Architects, Jamaican Institute of Quantity Surveyors, Jamaica Institution of Engineers, Incorporated Masterbuilders Association of Jamaica, the Land Surveyors Association of Jamaica, the Jamaican Institute of Planners, and the Association of Land Economy and Valuation Surveyors — which would be really the valuators. The different arms of the profession have representation in preparing this document.

“The first edition was in 2000 and there have been reprints and amendments subsequently, a set of amendments in 2010 and again amendments in 2020.”

How can we obtain the agreement?

PW: This document is sold on behalf of the CIC by all the member institutes [mentioned above]. It retails for $3,000. Incorporated Masterbuilders Association of Jamaica is one of the organisations that sell these books, and sales are actually quite good.

Someone hiring a plumber for a job that is not a huge amount may not want to use the agreement as there are fees involved, though relatively small. What are other ways to protect yourself?

PW: “One of the tips that you can use for any job that you’re doing is to have a clear scope of the project. Write down specifically what it is that you want to accomplish. Agree with the tradesman how much he’s going to charge you. In the average case, have him put in writing the cost of labour and the cost of material. That way, you have the latitude to purchase the material yourself if there’s a trust deficiency, and it also gives you a certain amount of control. You know exactly where the material is and that it is available for the work when it’s required.

“At all times, indicate the payment terms. For example, you could say, ‘I’m going to buy the material. I’m going to give you a percentage down, and I am going to give you X at the end of your installation.

“It is also recommended that you do a ‘hold back’. Until you are comfortable that it works as it should, you withhold some percentage of final payment — be it a 10 per cent or five per cent.

“This is because a tradesman may install something in your house and after a day, the same day, less than a week, there is an issue. They may tell you, ‘I am finished. So if you want me to come back, you have to pay me again.’ By having a ‘hold back’ you get some reprieve. For minor works, the ‘hold back’ period would be three months, with reasonable use.

“It is a way for the tradesman to guarantee his work and the accuracy of his work.

“If it becomes a normal part of his system, he knows that every month, these are the retentions that he’s collecting. It’s really just resetting his collectibles, and it builds his reputation. It says that he’s trusted in his work. It is not intended to be something that swings the scales in either party’s direction. It is to give comfort to both sides.”