Calling All Inteligent People...

Can anyone explain in very simple terms what a collateral warranty is (I have googled it and kind of get it but not fully) and what kind of cost would be involved for providing one?

Long shot I know but I also know that there are some VERY intelligent people on here

 

I can woffle but Russell will be able to give you the real guff.

 

Thanks roady I found bits like that and that is what confuses me! I am a sub contractor to a subcontractor who is in contract with a main builder. So who is my collateral warranty actually benefiting? And more importantly how much is it likely to cost me to have one written? Is this sort of thing totally different to that of my many insurances including PI?

Its all very confusing

 

Perhaps a chat over a coffee?

 

But if there is a problem with my work we would be liable under our normal contract to put it right. Unless the collateral warranty is for the owner of the building so that if the person I am contracted to goes out of business they can come to us? Or is that totally wrong? Think I will pass this to my md to sort!

 

Hi - here is the link to buy one on-line cost £17.15 per contract. http://www.jctltd.co.uk/category/collateral-warranties.

If you need any other info I will try to help. I do CIS for a few building companies, so may be able to point you in the right direction.

 

Mmmmm. Coffee Great idea; actually coinciding in the same space / time continuum might be the challenge right now. Essentially the collateral warranty idea is to offer a (presumably unimpeachable) third party warranty of work done. Whether it's assignable or not is another matter. You need specialist advice here from a surveyor (hence Russell) or structural engineer or architect, all of whom would routinely issue or be party to collateral warranties of one sort or another.

 

Unfortunately I do building services not surveying and the contractual issues I deal with tend to be the occasional JCT minor works contract when I have my contract administrator hat on... That said the comments above are correct, in short having a collateral warranty gives the end funder/buyer potentially a bit more security when it comes down to your workmanship/you going bust etc.

As Redrock states JCT sell one and they tend to be the most easily used contractual documents out there. Bear in mind you will need two copies and to initially complete a photocopy or use pencil in case you make a mistake.

If you need professional help I know a few surveyors and could pass you their details, however depending on the size of the project a lawyer who specialises in construction may be better. If it is only a small job then completing the JCT yourself is likely the way to go.

 

Thanks all