Construction Law/Change in Villa Design due to authority instruction z
Subject: Change in Villa Design – Design changes
Project: Construction of 500 Villas
Contract: Design & Built
Dear Mr. Kermit Dick
Background of the issue:
During the inception stage, Client approved a mockup villa (in different emirates). The Contractor priced the project in line with the tender documents (master plan and approved drawing – Mockup villa Plan). Based on the approval by the client, the Contractor developed the Villa design and when it was submitted to the Local Municipality approval (different emirates) the authority rejected the design and asked the Contractor to change the design completely, saying that it does not match up with the local custom. The GFA as per old design and new design remains same. Municipality hasn’t introduced any new design. Client tried to convenience the Municipality and lost. Due to the instruction by the authority the Contractor suffered a
1. Delay (EOT & Prolongation cost)
2. Additional cost due to redesign and
3. The construction cost (Increase in structural quantities of the villas as per the new design)
Contract Conditions: (usual one)
1. Contractor should comply with all authorities regulations and the project budget must not vary
Question: Whether we (contractor) is entitled for the above claim
Good day to you Mike,
Having reviewed the content of your question, it is better to accurately advise you on what recourse you have by fully knowing the terms and condition of your Design Built "Bespoke" Contract.However, this is not the case and i will proceed to answer accordingly.
Based on standard contract procedure, the Client requirements of the design were met and approved by the Client. However, since the Contractor is responsible for compliance with the building regulation authorities, he is in fact obligated to produce a design that is acceptable to these governing authorities in the country where the building is to be built.
This in itself is a clear Design obligation by the Contractor and cannot be passed on to the Owner/ Client. Therefore any claim for design delay or cost for redesign is the responsibility of the Contractor. However, if there is an increased construction cost for the new design, there may be a chance that the Contractor can be compensated by the Client. Then again, there remains the reliance on the terms and conditions of the Bespoke Contract and the Tender Instructions to guide you in what your position is at this stage.
If what you have stated at the end of your question i.e. " The Contractor should comply with all authorities regulations and the project budget must not vary"... is indeed part of your agreed contract terms, then i am afraid that your claim for any additional cost will be weak. However, you can still claim for EOT (without prolongation cost) based on the situation at hand which you can identify as an inadvertent error which can be reconciled between both parties.