Understanding Renovation Contracts in London: What Every Client Should Know

Most renovation disputes are not fundamentally about the work. They are about the contract — or the absence of one. A well-drafted contract does not prevent problems from occurring, but it provides a clear framework for resolving them. A poorly drafted contract, or no contract at all, turns every problem into a dispute.

Here is what clients should understand about renovation contracts before signing anything.

The main contract types

JCT Minor Works. The Joint Contracts Tribunal Minor Works Building Contract (MW 2016) is the most commonly used standard form for residential renovation projects in the UK. It covers: the parties and their obligations, the contract sum and payment terms, variations and how they are instructed and valued, practical completion and defects liability, insurance obligations, and termination provisions. For projects above £50,000, a JCT-based form is strongly recommended.

Bespoke client contracts. Many larger contractors use their own bespoke contract forms. These vary enormously in quality. Some are client-friendly and clear. Others contain provisions that heavily favour the contractor — one-sided variation clauses, payment terms that remove your ability to withhold payment, limitation of liability clauses that leave you exposed. Have a bespoke contract reviewed by a solicitor or construction professional before signing.

Letter agreements and emails. Common on smaller projects. Legally binding if they contain the key terms — scope, price, programme, payment — but often incomplete and ambiguous. If you proceed on this basis, make sure the scope of works is clearly defined in a written document referenced in the agreement.

No contract. More common than it should be. If work proceeds without a written agreement, you are not without legal protection — the Consumer Rights Act 2015 implies terms into contracts with consumers — but enforcing those rights is considerably harder and more expensive than if you had a clear written agreement from the start.

Payment terms: what to watch for

Stage payments. Standard on renovation projects. Payments are tied to defined stages of work completion. This is reasonable. What matters is that the stages are clearly defined, the payment amounts are specified in advance, and payment is triggered by actual completion of the stage — not merely by the contractor claiming the stage is complete.

Upfront deposits. A deposit of 5–10% at contract signature is normal and reasonable. Requests for large upfront payments (25%+) before work starts are a red flag. Reputable contractors with good cashflow and supplier relationships do not need large upfront deposits.

Retention. Standard JCT forms include a retention mechanism — typically 5% of the contract sum withheld until practical completion, then reduced to 2.5% until the defects liability period ends. Retention protects the client against defects. Some contractors resist retention clauses; insist on them for any project above £50,000.

Final account. The final account is the agreed record of all variations and the final contract sum. Do not make the final payment until the final account is agreed in writing and all practical completion items (snagging) are complete.

Variations

Every change to the agreed scope is a variation. Variations must be instructed in writing, priced in advance where possible, and agreed before execution. Verbal instructions to proceed with changes, followed by a dispute about the cost, are one of the most common sources of renovation conflict.

A good contractor will raise a variation order (VO) for anything that changes the scope or price. If your contractor is doing additional work without raising VOs, that is a warning sign — either the work is being done at your expense without agreement, or you are accumulating an undocumented liability.

Practical completion and defects

Practical completion is the stage at which the works are substantially complete and the property can be occupied. It is not the same as finished — there will typically be a snagging list of minor items to be resolved.

The defects liability period (typically 6–12 months after practical completion) is the period during which the contractor is obliged to return and rectify any defects that emerge. Retention funds are typically released at the end of this period.

Do not conflate snagging with defects. Snagging items should be completed before or shortly after practical completion. If a contractor refuses to return to complete a snagging list without being paid the final sum, use the retention mechanism to create the correct incentive.

Our approach

ASAAN operates on JCT-based contract forms for all projects above £25,000. We raise variation orders for every change to scope. We maintain a clear payment schedule against agreed stages. We do not ask for large upfront payments.

If you are in the process of selecting a contractor and want to understand how to evaluate a proposed contract, contact us.