Hi! I’m Reyhan, part of Bukit Vista, a property management company in Bali, Indonesia. Being part of Bukit Vista is an honor and an opportunity to network with great people. Bukit Vista’s internal parties and the partners and experts who help us have lots of interesting stories to listen to.
That inspiration encouraged us to create Bali Business Review, a YouTube channel produced by Bukit Vista to share information related to the property and accommodation market with industry experts. In this article, I want to spotlight Catur Putra Karya; a construction company that has handled several well-known villas and hotels in Bali. In this article, I want to discuss about property contracts.
How Property Contracts Rule
Indra, owner of Catur Putra Karya, said that the experience he had in the world of construction taught him that property contracts are the most crucial and important thing in carrying out collaboration with partners and clients. The existence of this work and property contracts is a form of transparency and regulates all agreements that occur before, during and after the contract ends. Indra also said that many clients do not understand the ins and outs of construction, clients often complain or make changes midway. This needs to be anticipated and prepared as risk management which is discussed and included in the property contracts. In agreements, this is usually called an addendum. However, complaints and changes that occur as the collaboration progresses must be made into clear corridors which are included in the contract. Indra is very open to any communication provided by clients or partnerships
The property contracts is also a document of transparency from party A to party B and vice versa. As a contractor, Catur Putra Karya outlined all their work timelines in the property contracts document. This will make it easier for clients to track progress and transparency of work from contractors. However, on the other hand, clients are also obliged to convey a timeline of their obligations to the contractor; namely contributions in terms of payment schemes. This payment scheme also includes nominal, percentage, terms, timeline, fines, etc. related to the rights received by the contractor.
Incorporating Force Majeure in Property Contracts
Force majeure is also one of the considerations that needs to be included in the property contracts; includes a discussion regarding the follow-up actions and consequences carried out by both parties in dealing with force majeure. Force majeure itself is a condition/event/effect that cannot be anticipated or controlled, such as natural disasters, war, etc. Specifically regarding weather anticipation, Catur Putra Karya has special planning and handling in case of rainy weather, for example, using a portable roof and prioritizing roof work.
Timely Completion and Quality Assurance
Indra is always determined to be able to complete construction work 30 days before the contract is completed, because these 30 days leave spare time for repairs and improvements if there are complaints. So that on the day the contract ends, the work can be handed over to the client. Because if there is work that must be done after/outside the contract period, then Indra needs to prepare a penalty that will be given to the client. The amount of the penalty varies, some are calculated per day, per week, per month, and the nominal amount or percentage also varies.
Sustainability and Eco-Friendly Mindset
In an effort to create sustainability and build eco-friendly property, Catur Putra Karya provides an understanding and use of materials that are in accordance with Balinese culture and materials that can be recycled. Catur Putra Karya also conveyed their concerns regarding waste disposal, such as providing waste infiltration so that it is hoped that the waste will not damage the environment.
Choosing Property Developers: Practical Tips for Investors
Indra also provides advice on how to choose the right contractor, here are his tips:
- Proven to have experience and experience in this industry. Apart from being physically strong, visionary thinking and understanding trends are also considerations
- Structured in terms of property contracts and agreements
- Have good planning and problem solving during the collaboration
- Not closed to change
- Responsive to a problem
- Understand the methodology used in carrying out construction
Watch Indra’s video discussing matters related to the construction industry on the Bali Business Review channel here. Also get market trends, investment tips, and exclusive interviews with industry experts. Don’t miss out, subscribe now.