Your builder is only liable if you made him liable
posted 24th August 2026
Domestic building contracts: why the right paperwork matters before your extension or loft conversion starts
Extensions and loft conversions are exciting projects, but they can also create significant risks for homeowners — particularly where work affects a neighbouring property.
Too often, the paperwork behind a domestic project amounts to little more than a quotation, a payment schedule and a proposed start date. There may be nothing in writing about damage, insurance, temporary weather protection, Party Wall obligations or who is responsible if something goes wrong.
That is not necessarily a problem while everything goes smoothly.
The problem starts when it doesn't.
A properly drafted building contract is not about distrusting your builder. It is about agreeing, before work begins, who carries which risks. If those responsibilities are not clearly established, you may find that the homeowner carries considerably more exposure than expected.
When things go wrong, who pays?
Consider a typical example.
A homeowner commissions a rear extension and loft conversion to a mid-terrace property. During the works, an existing rainwater downpipe is altered and temporary weathering around an opened roof is not properly maintained.
Following a prolonged period of wet weather, water enters the adjoining property. Timbers become saturated and wet rot develops to floor joists, joist ends, skirtings and part of a stair string. There are also costs associated with redecoration and temporary accommodation.
The homeowner approaches the builder.
The builder disputes responsibility, suggesting the damp was pre-existing or that the neighbour's gutters were blocked. The builder's insurer takes a similar position.
If there is no proper written contract dealing with these risks, the homeowner may be left to deal with the adjoining owner's claim and then attempt to recover the cost from the builder separately.
That is a very different position from having a clear contractual obligation requiring the builder to protect adjoining property and indemnify the homeowner against claims arising from the works.
The Party Wall Act does not automatically make your builder responsible
This is one of the most important points for homeowners undertaking work covered by the Party Wall etc. Act 1996.
Section 7(2) places the obligation to compensate an adjoining owner or occupier for certain loss or damage resulting from works carried out under the Act on the building owner.
In other words, your neighbour's statutory claim is generally against you as the building owner.
That does not automatically mean that your builder is responsible to your neighbour.
You may subsequently have a claim against your builder, but the strength of that claim depends on the contractual and factual evidence available to you.
This creates a liability chain that homeowners should understand:
Adjoining owner → Building owner → Builder
The first link may be created by statute.
The second needs to be properly established by contract.
A well-drafted contract can include express obligations requiring the builder to comply with the Party Wall Award, protect adjoining property, maintain temporary weathering, manage rainwater correctly and indemnify the building owner against relevant claims.
That can make a significant difference if something goes wrong.
Which contract should you use?
The right contract depends partly on how your project is being managed.
For a straightforward domestic extension or loft conversion, there are several possible routes, but the key question is whether you have an architect, surveyor or other contract administrator running the project.
JCT Home Owner Contract
Where the homeowner is dealing directly with the builder and there is no consultant administering the contract, a homeowner-specific contract can be appropriate.
The advantage is that it is designed around a direct relationship between homeowner and contractor rather than assuming there is a contract administrator sitting between them.
However, the published form should not simply be signed and forgotten.
The important protections often need to be addressed through the specification, contract particulars and appropriate amendments — particularly where the project involves adjoining property and Party Wall risks.
JCT Minor Works
JCT Minor Works can be a sensible option for extensions, loft conversions and refurbishment projects where an architect or surveyor is already involved in administering the works.
The important point is that the form assumes someone will perform that administrative role.
If there is nobody filling that role, the contract may contain machinery that simply will not be used in practice.
JCT Intermediate
For larger or more complicated domestic projects, a more comprehensive form such as JCT Intermediate may be appropriate.
It can provide greater contractual machinery for longer projects, phased works and subcontracting arrangements, as well as insurance provisions that may be relevant to damage affecting adjoining property.
But this is generally more suited to a project where there is already a professional team in place to administer the contract.
Other domestic forms
There are also consumer-focused forms produced by organisations such as RIBA and the Federation of Master Builders.
These can be perfectly reasonable starting points, but homeowners should read the payment, insurance and liability provisions carefully — particularly where the contract has been presented by the builder.
The important point is that the form itself is only part of the answer.
The amendments and completed particulars are often where the real protection lies.
The clauses that matter
For a domestic project involving an adjoining property, there are several areas that deserve particular attention.
1. Compliance with the Party Wall Award
The contract should expressly require the builder to comply with any Party Wall Award, including working hours, access arrangements and relevant notice requirements.
The Award binds the parties to whom it applies, but the building contract should also make the builder's obligations clear.
2. Protection of adjoining property
The builder should have a positive contractual obligation to protect neighbouring buildings and land and to maintain that protection throughout the works.
The obligation should also address making good damage promptly and at the builder's cost where appropriate.
3. Temporary weathering and rainwater
This is an area that can be overlooked until it causes a serious problem.
The contract should address how opened roofs and exposed areas are to be protected, including requirements for temporary coverings to be maintained and inspected.
It should also deal with rainwater from existing and new roof areas, ensuring that water is properly piped to an appropriate outfall throughout the works.
A simple contractual requirement can be extremely valuable when the alternative is an argument about who caused water damage months later.
4. An indemnity in favour of the homeowner
An appropriate indemnity can require the builder to cover relevant claims, costs and expenses arising from the works.
Where Party Wall works are involved, the wording should specifically consider claims from adjoining owners and occupiers.
5. Insurance requirements
Do not simply ask a builder whether they are insured.
The contract should state what insurance the builder is required to maintain and the certificates should be obtained before work starts.
For projects adjoining neighbouring structures, public liability insurance of at least £5 million may be appropriate, alongside employers' liability and contractors' all risks cover depending on the circumstances.
The homeowner should also notify their own insurer before structural works begin.
Importantly, deciding whether a particular insurance policy actually covers a specific risk is a matter for the insurance broker or insurer. A building surveyor should not be relied upon to provide insurance advice.
6. A schedule of condition
A schedule of condition records the state of the adjoining property before work starts.
This can be invaluable if a neighbour subsequently alleges that cracks, damp, movement or other damage has been caused by the building works.
Without a record, the dispute can become a battle over what was there before the project began.
7. Stage payments
Payments should generally reflect measured progress rather than arbitrary dates.
The contract should clearly establish how valuations, payment notices and pay-less notices operate.
Large advance payments can leave homeowners unnecessarily exposed.
8. Retention and rectification
Retention provides an additional financial incentive for the builder to return and deal with defects.
The rectification period should also be realistic. For many domestic projects, it can be sensible to ensure that the first winter falls within the period during which defects can be addressed.
9. Completion and delay
The contract should contain a clear completion date.
If liquidated damages are being used, the amount should be properly considered and completed rather than left blank.
A vague promise to "finish as soon as possible" is rarely helpful when a project runs months behind schedule.
10. Variations in writing
One of the simplest ways to reduce final account disputes is to require variations to be agreed in writing.
If additional work is requested, the change in scope and price should be recorded.
It is much easier to resolve a disagreement when there is a written instruction than when the evidence consists of recollections of conversations on site.
Insurance is not a substitute for a good contract
Insurance is important, but it should not be treated as the solution to every risk.
Some JCT forms provide alternative insurance arrangements dealing with damage to the existing structure and the works. For an extension or alteration to an existing home, the homeowner may have obligations concerning insurance over the existing building and the works.
That means your household insurer needs to know about the project before work starts.
Some forms also contain optional provisions concerning damage to adjoining property resulting from particular risks such as collapse, subsidence, heave, vibration, weakening or removal of support, or lowering of groundwater.
However, this is not a substitute for the builder's public liability insurance, nor does it necessarily respond to ordinary negligence or weather-related water penetration.
The lesson is straightforward:
Insurance should support the contract, not replace it.
The contract should establish what the builder must do. The insurance should provide appropriate financial backing for the risks that are insured.
What statutory protection do homeowners already have?
Domestic building contracts do not exist in isolation.
The Consumer Rights Act 2015 provides implied protections for consumer service contracts, including requirements concerning reasonable care and skill.
The Consumer Contracts Regulations 2013 can also provide cancellation rights in certain circumstances where a contract is entered into at the consumer's home.
The Defective Premises Act 1972 provides further protections in relation to dwellings, with subsequent legislation including the Building Safety Act 2022 changing aspects of the limitation framework and extending the scope of certain claims.
These protections are valuable.
But they are not a replacement for a properly prepared building contract.
They do not, by themselves, give you the detailed provisions you need concerning payment stages, retention, completion dates, temporary weather protection, Party Wall compliance or indemnities.
Warning signs before you sign
There are some situations where we would recommend taking a step back before appointing a builder.
A large deposit before work starts.
A payment for materials that have genuinely been ordered may be understandable. A substantial proportion of the contract price payable on day one deserves scrutiny.
No written specification or drawings.
If the scope of work is unclear, it becomes much harder to establish what the builder has actually agreed to provide.
Insurance certificates that never arrive.
Do not wait until there is a claim to discover that the builder's insurance is inadequate or has expired.
A refusal to comply with a Party Wall Award.
The Award is not something that can simply be negotiated away once the builder arrives on site.
Cash discounts instead of paperwork.
Saving money on the contract is rarely worthwhile if it leaves you exposed to a much larger uninsured or unrecoverable loss.
The real value of a small works contract
A domestic building contract does not need to be an enormous legal document.
For many extensions and loft conversions, the important thing is having the right form, completing it properly and making targeted amendments that address the actual risks of the project.
That means considering:
who is administering the contract;
what the builder is responsible for;
how adjoining property will be protected;
how the Party Wall Award will be complied with;
what insurance must be maintained;
how payments and variations will work;
what happens when the work is delayed;
how defects will be dealt with; and
who ultimately bears the cost if something goes wrong.
A few hours spent getting those matters right before construction starts can be considerably less expensive than trying to establish liability after a dispute has already developed.
How Tayross Associates can help
Tayross Associates prepares and completes building contracts for domestic and small commercial projects on a fixed-fee basis.
The service is designed for homeowners who need the contract properly put in place but do not necessarily need a consultant administering the project throughout construction.
We can help with selecting the appropriate form, completing the contract particulars, reviewing the specification and drawings, and drafting amendments dealing with matters such as adjoining property protection, Party Wall compliance, temporary weathering, rainwater management and indemnities.
We can also set minimum insurance requirements for the builder and provide guidance on the certificates that should be obtained before work begins.
The contract is then handed over ready for signature, with guidance on running it yourself.
We do not administer the contract as part of this service, value the works, certify payments, select your builder or provide insurance or legal advice. Where a matter becomes contentious, appropriate legal advice should be obtained.
The bottom line
The biggest mistake homeowners make is assuming that because they have a quotation from a reputable builder, the builder automatically carries the risk of anything that happens during construction.
That is not how it works.
If your project affects a neighbouring property, the statutory relationship can leave the building owner carrying the initial liability. A properly drafted contract is what creates the contractual relationship that allows you to manage that risk with your builder.
Your builder may be responsible for the damage — but make sure you have actually made him responsible in the contract.
Tayross Associates Limited
Chartered Building Surveyors
Monument House, 215 Marsh Road, Pinner HA5 5NE
020 8426 1448
carl@tayross.com
This article is general guidance on contractual and statutory matters affecting domestic building work. It is not legal advice and does not take account of the circumstances of any particular project. Contract forms and editions change, and the provisions referred to should be checked against the current published edition before use. Tayross Associates are chartered building surveyors, not solicitors or insurance brokers.
