Participation in construction
Participation in construction is actually a type of contract that is concluded in the field of contracting and construction. This contract is applicable to all commercial, residential, etc. projects. Now that you are familiar with the definition of construction participation, you should pay attention to an important point. In this way, construction participation contracts are considered among the most important contracts; Because they directly affect the property of the parties to the contract. For this reason, the rules of participation in the construction of abundance have also been established.
The way to participate in construction is that the owner of a plot of land or building intends to build residential or commercial units. However, he does not have enough money and capital to implement his idea. In such a situation, the construction partnership agreement helps the owner. Because according to this contract, the land owner will benefit from the contractor's services, facilities and capital in the implementation of his construction project.
Conditions of Participation in Construction
Regarding the terms and conditions of participation, it is necessary to consider the following points:
The calculation of the amount of participation and also the percentage of profit of each party of the contract should be done according to the inflation rate and changes in housing prices in the market.
Project costs will vary depending on various factors, including the city and region. For this reason, construction costs are calculated based on the price per square meter of a newly built apartment in the same city and region.
In construction partnership contracts, the share of the owner and the contractor is determined from the middle of 50%; It means that the owner gets 55% of the project and 45% goes to the contractor. Of course, this share distribution is only a common example and it is possible to change it to 60 and 40 percent.
In collaborative projects, before any action, the value of the property and the final value of the project must be calculated. Note that determining the amount of profit as well as the value of the property is done by using special formulas.
As mentioned, construction partnership is a type of contract. The specialty of contracts can be seen in the fact that it is regulated according to the opinion of the parties. For example, the parties can fulfill all the terms of the contract, including the amount of interest, etc. with a bilateral agreement. However, it cannot be denied the influence of the customary conditions of the society as well as the rules of participation in building construction.
After concluding the partnership agreement and before starting the construction, the contractor will give the owner a gratuitous amount. This is because he can provide a place for himself and his family to live during the project.
According to the advice of lawyers and experts, it is better to appoint a person as an arbitrator at the time of signing the partnership agreement. This person will judge between the parties in case of possible problems. provided that you inform him of his conditions, duties and responsibilities at the beginning of the matter. In this way, it is not necessary to go to court and legal authorities to resolve disputes. Except in special and exceptional circumstances.
One of the most important conditions for concluding partnership contracts is the precise determination of the responsibilities and duties of each of the parties to the contract.
If the contractor is a legal company, it is better for the owner to be informed about the performance and activities of this company first. In this way, any damage, financial loss, etc. will be prevented.
The conclusion of the partnership agreement with legal contracting companies must be done with the official signature and seal of the company.
If any of the parties to the contract do not comply with their obligations, the other party will have the right to terminate the contract.
It is recommended to replace promissory notes with valid bank checks in the construction partnership; Because in this way, you will not face difficulties in case of possible problems.
Continuous notification in time intervals of one to two months is one of the duties of the contractor; That is, he must inform the owner or the companies of the contracting party about the completion of the work in the form of a report or minutes of the meeting.
If a person or persons are responsible for handling the activities of the contracting company as the representative of the owner; It is necessary to mention their names in the contract. In addition to this, it is better to include the terms of replacing the representative instead of the original owner in the contract.
Considering that the owner of the land or building may die during the implementation of the project; In this case, his heirs will continue to participate in the construction.
At the end of the contract period, if the construction is not completed; Both parties will have the right to cancel or claim damages if the conditions are mentioned in the contract.
The arrangement of the partnership agreement should be done based on the financial budget of the owner and also the scope of the contractor's activity.
One of the requirements for participation in construction is determining and receiving guarantees for project implementation and obligations.
Determine the percentage of participation in construction
In the contract between the partners, the percentage of participation is determined so that there is no difference between them. In the first step, the capitals of both parties will be valued by an expert. Then they will divide this amount by the capital, and then The property price of that owner will be determined. And after determining the owner's capital, they estimate the construction costs. The sum of the funds of the owner and someone renovating the property is the total value of the project.
Based on a general formula, the profit of participation in construction and how to determine the share amount is calculated based on the price of each square meter of a newly built apartment in that area. If the price of each square meter of a newly built apartment is known, the amount of share is calculated based on (50-50), that is, 50% belongs to the owner of the land and 50% belongs to the person who does the construction work on the land in question. to give
At the beginning of the process of participating in the construction of the property, the builder must provide a free amount to the owner of the land so that the owner of the land can rent or mortgage his suitable house during the construction period and live in it for a while. have This amount is gratuitous and will be returned to the manufacturer.
Types of Construction Participation
Partnership contracts are divided into the following types based on the laws and customs of society:
The way to participate in the construction is that one party presents as a land owner; And the other party is responsible for the construction costs under the title of builder or building contractor. In concluding such a contract, there is no need to mention the price of the land, etc. It is only enough for the builder to commit to deliver the building with the desired quality in a certain time. Finally, the owner and the contractor share the entire property with each other.
There is another type of partnership agreement that is phased. In this way, with the completion of each stage of construction, a share of the property is transferred to the builder. For example, the parties agree that a dong will be transferred to the contractor upon completion of the facade infrastructure and skeletonization.
In another part of this contract, an agreement is made between the owner and the builder; According to the fact that if the construction reaches a certain stage, the owner of the land should give a power of attorney to the builder. This power of attorney is given for the transfer of the constructive share, and in this way he can act to prepare the official document.
Sometimes, three dongs are transferred from the property to the contractor at the very beginning of the matter and after the conclusion of the partnership agreement. In this way, he will also start the construction process.
