A fixed-price contract gives a lender comfort because the cost of the build is known up front. But the word “fixed” only matters if the contract actually covers the whole job. A quantity surveyor will read the contract closely for exactly that reason.
What is included and excluded
Check that the contract price covers everything shown on the plans and specification. Items the owner must supply, or that are listed as exclusions, still have to be funded from somewhere, so they belong in the budget.
Provisional sums and allowances
Provisional sums are placeholders for work that has not been fully defined. A large provisional sum is a sign the price may increase. The QS will check that each allowance is realistic.
Payment terms
The payment schedule should match the build stages and the lender's drawdown process. A schedule that is front-loaded can leave the borrower exposed if the builder does not perform.
Variations
How are variations priced, approved and paid? A clear process protects both the owner and the lender from unplanned cost increases.
Programme and completion
A realistic programme and a clear completion date matter, because delays increase finance costs and other expenses outside the contract price.
Does the contract match the budget?
The contract price is only one line in the project budget. Consents, professional fees, finance costs, landscaping and contingency all need to be accounted for as well.
A QS Verification Report can confirm the contract and budget line up before you sign or before you apply for funding.
