1. Overall
In this article we deal with four topics, namely;
- the length of the construction period
- quality requirements for what is to be built and delivered
- changes (additions)
- how the contractor should act if changes entail a claim for additional remuneration or an extension of the deadline.
2. Length of construction time
2.1 Freedom of contract
The Bustad Listing Act is silent when it comes to how long one can agree that the construction period should last.
The parties are therefore free to agree on what they need.
For an entrepreneur, it may often be desirable to have a vague formulation.
In project sales of apartments, often the situation will be that much remains to be clarified at the time when the apartments are put up for sale.
You probably have a framework permit, but construction loans are not opened until you have sold a certain proportion of the apartments (e.g. 70%). Consequently, it may take a long time before one has the funding to start construction.
Another circumstance is the order provisions or conditions in the framework permit that must be fulfilled before obtaining, for example, a temporary use permit, and where such conditions present challenges.
A third factor may be strict protection regulations, which mean that the developer has to deal with antiquarian authorities throughout the construction period, and where it is difficult to manage/predict the authorities' processing time.
In other cases, such conditions do not present any challenges at all. The contractor is, for example, a type house manufacturer and the house must be erected on the consumer's plot. What is to be listed is within the framework of the zoning plan, and the measure is simple. In such a situation, a consumer may be very keen to arrange a specific date.
2.2 Vague formulations
In 2011, two Supreme Court Justices were handed down, both laying down guidelines for how vague wording the parties can agree on in terms of the length of the construction time. The judgments also say something about the prerequisites for such vague formulations to stand up in practice.
These judgments are called “New Major” and “Kruse's Street” and is included in Rt 2011 s 670 and Rt 2011 s 679.
Both judgments concerned apartment projects at Majorstuen in Oslo, and the developer was the same in both cases.
Common to both cases was that the developer had adopted a very vague determination as to when the apartments would be ready for occupancy, and the Supreme Court came to the conclusion that neither of them gave a specific binding deadline for the completion (and takeover) of the apartments.
The developer thus accepted that one was not obliged to a specific date, but nevertheless sentenced to pay daymulk in the case called “Kruses gate”. The reason that the developer lost in this case was that the developer had not carried out the project “with rhyming momentum”, cf buofl § 10 last paragraph which we deal with below.
In both projects, the developer had used vague formulations about when the apartments would be completed. In “New Major” it said that the developer”aiming for completion (...) 2nd half of 2007”It was said that the houses were “planned move-in ready during Q3 2007” in “Kruse's Gate”.
In project sales today you can find similar formulations and the reason is that one does not want to commit on an uncertain basis.
It is often stipulated that the developer (seller or “contractor”) must notify the buyers a certain time before completion, and that the date notified is considered to be the daymulched takeover date.
2.3 A certain number of days
In smaller projects such as the construction of a detached house or a cottage, one is normally more concrete.
Some agree a specific date, while others arrange for the works to be completed within a set number of days.
Once you have agreed on a certain number of days it is important to think through what should be the start of the deadline.
We advise the contractor to start from the time of the commissioning permit with the addition of a few days for mobilization and start-up at the construction site.
We have learned that formulations based on “start-up construction site” It has created unnecessary disputes. Dispute because the consumer has considered the felling of trees and/ or the removal of loose masses to be start-up even if these are non-applicable measures carried out by the contractor pending the availability of a commissioning permit.
2.4 Saturdays, holidays and holidays
When specifying the construction time to a certain number of days counted from a start-up time it is important to take into account Saturdays, holidays and holidays.
It should be clarified that the construction time does not include Saturdays and public holidays, and that Easter, summer and Christmas holidays should be added to the construction time where applicable.
The fact that the construction time must be added to holidays is explicitly stated in the construction forms. From these it follows that the Easter and Christmas holidays entail an additional one week for each holiday, while the summer holidays provide an additional three weeks.
2.5 “Urgent advice (...) with rhythmic progress (...) without undue interruption”
If the parties — against presumption — have not agreed on anything, it follows from buofl. §10, last paragraph that the contractor shall carry out his works “urgent advice” after the consumer has said it is ready. Then the contractor should carry out his work “with smooth progress and without unnecessary interruptions”.
The part of the provision that links start-ups up against the consumer's message is presumably impractical today. When the bust registration law was created, it was very common for consumers to be responsible for some of their own efforts such as tree felling and the erection of lecamur etc. Then it was important that the consumer notified the contractor when everything was ready.
Today, this is probably not so common, but the entrepreneur must still be prepared to start up “urgent advice” starting from the conclusion of the contract unless otherwise stated (written).
Under any circumstances, contractor must work “with smooth progress and without unnecessary interruptions” as the Supreme Court came to in the “Kruse's gate” ruling, see paragraph 2.2 above.
Failure to do so may result in daymulch liability even if no specific completion date is specified.
3. The quality of the work performed
When deciding on the quality of contract work, one must always start from what has been agreed. What is agreed is normally stated in attachments to the contract, and it can be delivery descriptions, prospectus, etc.
Secondly, there is a lot that is not specifically agreed, and in any case, the bustad entry law has provisions that the contractor must take into account.
The central provision is buofl section 7 where it is stated in the first paragraph that the work shall be carried out “in a good professional manner”. In the second paragraph, it is stated that the materials used “It should be of good quality.”.
In addition, we refer to buofl § 25 second paragraph on deficiencies where it is indirectly stated that the contractor's works must comply with “public law requirements”. These are requirements stated by law or regulation (”in conhald of law”) and where TEK17 is the most central regulation in a construction project.
We have written a good deal about the requirements imposed on the finished product in the series of articles on the NS contracts. There is a lot of relevant reading in, for example, the article dealing with NS 8407 paragraph 14 and it can be read here.
It is appropriate to clarify that the supervisor of TEK 17 is not a regulation. This means that the solutions chosen do not have to comply with the recommendations given by the supervisor. However, we clarify that the supervisor gives recommendations on so-called pre-accepted solutions. If you choose a solution in the supervisor, you will always be considered to have fulfilled the regulatory requirement.
If you choose your own solutions, you must be able to document that your own solution is at least as good as one of the preaccepted solutions proposed by the supervisor. This happens through a so-called “analysis” and we refer in this regard to TEK 17 § 2-2 (2) letter b.
4th. Amendments (additions)
For the same reasons that professional builders need to require changes during construction, consumers have such needs.
We refer in this regard to buofl. § 9 “Changes and additional work” where in the first paragraph it is stated that the consumer “may require changes in the work and order the contractor to carry out additional work”.
We have written a section on changes and the need for this to be regulated in several articles, and one of them is here. Although this applies to changes in contractual relations governed by, among other things, NS 8407, the article is relevant because it provides background information that can improve the understanding, and practice, of buofl section 9.
One similarity is that the change “must be in the context of the contract and not be of a material nature other than the originally contracted work”, see NS 8407 paragraph 31.1, third paragraph.
In buofl. § 9, first paragraph, there is a corresponding rule. There it says the amendment must stand “in relation to the matter agreed and which does not differ substantially in scope or character from that action”.
Another similarity is that NS 8407 and others place a volume limitation on the builder's modification competence. We refer in this regard to NS 8407 paragraph 31.1, the third paragraph of which we also write about in the article referred to above.
In section 9, third paragraph of buofl, such a restriction is also included, but the contractor-consumer agreement must apply separately. If such a restriction is not agreed, the consumer will be free to order changes that exceed the remuneration by far more than 15%.
Since the law on bustad entry is mandatory, it is not possible to agree on a lower limit than 15%, but a higher limit can be agreed.
As for NS 8407, a net consideration is to be taken into account, which also takes into account the works that are being completed. If the addition is ordered, which amounts to an increase of 20%, while work corresponding to 6% is eliminated, the net changes will only amount to 14%.
The consumer may also not demand changes if this causes the contractor disadvantages that are not commensurate with what the consumer obtains, cf. Section 9, second paragraph.
This is a contractor safety valve that is probably not used often.
In the event of changes, a contractor will be able to claim both additional remuneration and an extension of the deadline if there are factual grounds for this. If a change will have such major consequences that the contractor is at a disadvantage, this will presumably be reflected in the amount of the remuneration claim and/ or the length of the deadline extension required. Then the change will probably not be any, and then the challenge will be solved that way.
In some cases, however, a high remuneration requirement or a deadline extension requirement may not be sufficient to waive a change claim from a consumer.
Such a case is encountered in larger apartment projects where buyers of apartments enter at different stages of the construction process, while production is arranged in a more industrialized way than is the case with the construction of individual detached houses or cottages.
In such apartment projects, there is a need to limit the options available. That applies both in terms of what can be changed, and when changes can be ordered.
Consequently, one is happy to operate with specific options and there are deadlines that buyers have to deal with.
If all apartment buyers were completely free to order anything of choice, and at any time, the contractor would be exposed to an unreasonably high risk of the entire project being delayed.
For these reasons, it is important that the developer takes into account all changes (and additions) to the contract document. This applies partly in relation to the consumer, but also in relation to the general contractor.
We have already discussed it, but the possibility of curtailing the consumer's right to demand changes as a result of the disadvantages inflicted on the developer (contractor) will be greatest in an apartment project and least in the case of the construction of an individual dwelling or cottage.
Finally, we remind you of the necessity of scripture.
The Act does not contain any requirement for writing, but it follows from section 9, fourth paragraph of buofl., that an entrepreneur may himself require that the consumer must submit his claims for an amendment or addition in writing.
Here the bustad entry law differs from, for example, NS 8407 paragraph 31.3 which states in the first paragraph that an amendment order must be in writing.
In NS 8407 contracts, failure to write will most often cause a contractor to implement the routine of so-called irregular changes, while a contractor in a consumer relationship does not have to implement the change work at all.
In any case, it is important to keep in mind that it is the developer who assumes the highest risk by not ensuring that changes, and the consequence of the change, are laid down in writing. If proven, the risk will go beyond the professional party.
5. Claim for additional compensation and deadline extension
The rules on supplementary compensation in case of changes are set out in section 42 of the buofl., while the rules on supplementary periods follow from section 11 of buofl.
We have chosen to deal with the topics of supplementary remuneration and extension of the deadline in each of the articles that exist respectively here and here.
We have chosen to do this because such additional claims (remuneration and/ or deadline extension) may alternatively be based on something other than the consumer's claim for changes. Consequently, it becomes clearer to deal with everything concerning, respectively, supplementary remuneration and additional time limits.
The only thing we want to clarify here is that claims for additional time off as a result of a change are lost if the entrepreneur does not notify the consumer “without undue delay”, cf buofl § 11, last paragraph.
For compensation claims resulting from a change, the starting point is that claims for additional compensation must either be agreed in connection with the change itself, or notified in connection with a claim for change being made, cf. buofl section 42, first and second paragraphs. However, the rules are not as categorical as regards claims being forfeited if they are not notified “without undue delay” as is the case by additional time limit.
We write more about this in the article on surcharges, which can be found here.
