Contract Administration for London Residents Associations
15 October 2025As a residents association, you face significant responsibility when undertaking major works – be it a roof replacement or fire safety upgrades. These projects carry substantial financial and legal risk for your members.
The process for mitigating these risks is Contract Administration (CA), carried out by a RICS regulated Chartered Surveyor. The CA acts as your impartial administrator, ensuring the project is delivered to specification, on time, and against budget.
Mitigating Risk
Relying on informal agreements for large projects is inadequate given the financial and legal exposure. Professional CA establishes necessary control:
- Impartiality: The CA is independent of the contractor and holds no commercial interest. They provide a vital, neutral check on the builder’s performance and financial claims.
- Dispute Mitigation: By enforcing formal contract procedures, the CA standardises communication, significantly reducing the probability of costly disputes over quality or time.
- Compliance: The CA ensures works are managed to a professional standard, which is necessary for protecting the freeholder’s interest and meeting lease obligations.
Establishing the Contract Framework
The CA’s first critical task is selecting the most appropriate building contract. This choice dictates the rules and responsibilities for all parties.
We base this selection on the Joint Contracts Tribunal (JCT) suite of contracts, the UK standard. We assess core factors to ensure the correct JCT form is used:
| Scope and Scale | Matching a Minor Works or Standard Building Contract to the complexity of the project. |
| Time Management | Ensuring the contract includes provisions for extensions of time and defines liquidated damages for unexcused overruns. |
| Design | Clarifying if the association’s team or the contractor holds design responsibilities. |
This rigorous selection protects the association’s legal and procedural position from the start.
Financial Control and Certifying Payments
The highest financial risk is overpaying the contractor. The Contract Administrator’s role is to prevent this and safeguard the association’s funds.
The CA manages the financial aspects rigorously:
- Valuation: When the contractor claims payment, the CA conducts a detailed site inspection. Only after verifying the completed work’s quality and quantity is a formal Interim Certificate issued, authorising the payment.
- Retention Management: A set percentage of the contract value (retention) is held back. This sum is released only after the formal Defects Liability Period has ended, providing a commercial incentive for the contractor to return and rectify any remaining issues.
- Protection: The CA ensures that interim payments never exceed the proven value of the work executed and materials securely stored on site, ensuring financial integrity.
Managing the Unforeseen: Formal Instruction
Unforeseen issues are inevitable, especially in London’s older buildings. The CA must handle these deviations effectively and formally.
- Procedural Integrity: When a problem arises (e.g., latent defect), the CA formally issues a Variation or a Contractor’s Instruction.
- Documentation: This instruction legally amends the contract scope, details the required solution, and formalises any agreed adjustment to the timeline or cost. Every change is professionally documented, preventing future disputes.
- Mitigation: By applying formal contract procedures consistently, the CA ensures unforeseen issues are absorbed into the project structure efficiently, minimising the impact on the budget and the final quality.
Implementing professional Contract Administration is the most effective way for a residents association to discharge its duties regarding major works, ensuring successful project delivery and financial integrity.
