The websites and catalogues of manufacturers of houses have attractive pictures and promises of your own unique home. However, prefabricated houses come assembled to various extents.
There are basic packages, "safe from the rain" deliveries and turnkey packages. Manufacturers of houses often have their own terms for various types of deliveries.
Nevertheless, it pays to compare delivery types and prices. Putting an effort into accurate cost calculations and planning the timetable realistically are also important.
The costs of building a single-family house include at least the following
- land costs (purchase price or annual rent)
- building permit costs
- cost of the prefabricated house
- costs of building supplies
- costs of the construction work
- various subscription fees
As a rule of thumb, the total cost can be estimated by multiplying the price of a normal prefabricated house threefold or fourfold. Computer software can assist in the early stages of planning to establish a rough estimate of costs.
Ordering a fully completed house is naturally the least risky alternative. The costs and timetable are known fairly accurately in advance. The costs of foundation work as well as water supply and drainage systems and electrical work should be calculated on top of the costs of the prefabricated house.
Price must be disclosed
The Competition and Consumer Agency together with the Confederation of Finnish Construction Industries RT and the Association of House Suppliers PTT has called for house manufacturers to indicate prices on their websites and catalogues if a particular type of house and delivery package is presented e.g. with floor plans.
In addition to price, customers should be informed what the quoted price includes and what additional purchases are necessary to make a prefabricated house liveable. If a catalogue or website has no price information at all or, at best, general price information, prospective customers should wonder whether the house manufacturer complies with legislation and industry regulations to begin with.
Seller must lodge a security for advance payments
When you order a prefabricated house or other package of construction elements, e.g. a garage, ancillary building or a barbecue hut, you generally have to pay part of the price in advance. In effect, you are paying for something you have not yet received.
According to the Consumer Protection Act, the seller must lodge a security to cover obligations arising from receiving advance payment. The security guarantees refund of the buyer's payment in the event that the manufacturer becomes insolvent. Any business collecting advance payments must always lodge a security without their customers needing to specifically request this.
If a business does not lodge a security, they are not allowed to collect the advance payment. The business may not decline to lodge a security even with your approval. Businesses may also not circumvent this responsibility by promising other benefits such as lower prices or faster delivery instead of lodging a security.
The obligation to lodge a security is not affected by whether the seller uses the term "advance payment", "reserve payment" or "down payment". The size of the advance payment does not affect the obligation either. Even a small sum is an advance payment if you do not immediately receive anything in exchange for it.
Securities may take the form of cash deposits, bank guarantees or guarantees secured by insurance companies. The seller's shares or corporate mortgages, on the other hand, are generally not accepted as security due to the fact that their value will dramatically decline in the event of insolvency. The object of the purchase transaction may not be used as security either, as long as it is in the possession of the seller.
The security must be valid at least until the time when the seller has delivered the object of the transaction and completed any related work, and you have had reasonable time to inspect the product. Consumers are entitled to information from the seller regarding the security they have lodged and its legality.
Orders are binding - cancellation is costly
Make sure you carefully read the contract and its detailed provisions before making the order. Pay particular attention to the contents of the delivery and contact the supplier to clear up any ambiguities.
Check that the manufacturer complies with the general terms of contract for the sale and installation of prefabricated houses and housing elements as approved by the Consumer Ombudsman. This being the case, you will see it specified in the terms of contract.
Orders for prefabricated houses are binding, which means that cancellation entails costs. The standard compensation for cancelling an order is generally no more than 3% of the sales price.
The senior planning officer and construction supervisor have key roles
Every construction project must be headed by a qualified senior planning officer. You will also need planning officers in charge of building design, structural design, HPAC design and electrical design. The senior planning officer coordinates their work.
The planning officers must have sufficient qualifications for the project in question. The senior planning officer is often an architect working for the house manufacturer.
The building permit authority generally sets the requirements for the qualifications of the senior planning officer. The construction supervisor also has a key role in the success of the project. The construction supervisor’s duties include ensuring that
- the building supervision authorities are notified of construction having begun
- work is done in accordance to the building permit and all relevant regulations
- the necessary action is taken if, during construction, defects are observed
- the required inspections are done at the right time
- all required plans have been approved, are current and are available at the construction site
- the building log is maintained carefully and it is current.
Prepare written agreements with the senior planning officers, the other planning officers and the construction supervisor. The written agreement should include a list of tasks specifying all tasks related to the assignment.
Assembly and installation
The greater the extent to which the prefabricated house is assembled, the more assembly engineers arranged or appointed by the manufacturer are generally used.
If the customer enters into a separate assembly agreement with the manufacturer, the manufacturer is responsible for the quality of work of both their own employees and any subcontractors they might use. If the manufacturer simply recommends a particular contractor to do assembly work, the manufacturer is not liable for his work .
The manufacturer is always liable for the quality of the materials they provide.
Look for information on reliable contractors. Ask friends for recommendations. You should also pay attention whether the contractor acts appropriately at the earlier stages involving requests for quotes and making a choice between competing contractors.
Each stage of work is paid for after completion
Do not enter into an agreement, which has you paying the contractor in advance. Contracts should be such that each stage of work is paid for after completion.
When you sign the agreement, make sure the terms of contract are approved by the Consumer Ombudsman. Terms of contract include
- General terms of contract for specialised construction work
- General terms for consumer contracts for construction work, RYS-9 1998, contract form, offer form and enclosures
- General terms for consumer contracts for building joiner work and the general terms of contract for assembly work related to the same.
Contracts should feature clearly defined timetables and appropriate terms regarding compensation for late delivery. These can help prevent situations where the construction site is, in the worst case, idle due to the contractor taking on too many projects and failing to adhere to agreed timetables.
Supplies should be delivered to the site in phases
Storing construction supplies in the often damp conditions at construction sites may damage the materials. Agree with the manufacturer to have construction elements and other materials delivered to the site in phases as work progresses.