The building process starts with the selection of a reliable contractor that offers the best budget/quality/timeframe ratio and with full consideration of the technical specifications for construction works, materials and installations.
- 1. Contract.
The Construction Contract should include a full set of construction drawings (architectural and structural), a detailed technical specification list of materials and installations, the schedule of payments, the work schedule and the detailed Bill of Quantities with prices. Construction contract should be written in Bahasa Indonesia and translated into your Language, checked by Lawyer and signed in front of Notary.
- 2. Permits.
A Building Permit (IMB) is legally required in order to start the construction of the Villa. Therefore application process for IMB should start at a very early stage to make sure that there are no issues that could prevent from building your Villa. If you are intending to rent your property you will need a “Pondok Wisata” license that can be applied for together with the Building Permit IMB. Architectural and Structural drawings that are required for the IMB application should match the real construction drawings.
- 3. Construction Supervision.
The contractor must have his own skilled supervisor on site, but it is always advisable to have an external supervision to make sure adherence to the contract documents.
- 4. Quality.
Quality control process means the adherence to procedures and implementation of tests to control the quality of materials and construction works. This is an issue of exceptional importance since there are many problems in Bali regarding quality in the construction sector.
- 5. Payment Schedule.
Progress reports must be submitted by the contractor so you may check the progress of works and make the corresponding payment accordingly. Generally payment is done in the form of an initial down payment (usually this is 20-30% of total price) followed by a number of progress payments depending on the duration of the works.
- 6. Retention.
Retention for “Defect Liability Period”: Contract should provide a retention of 5-10% of the total price to be withheld until all agreed rectifications are completed. Then the building should be fully inspected by qualified people and rectifications agreed with the contractor in front of witnesses before you make the final payment.
- 7. Planning of Works.
The work schedule prepared by contractor is a very useful tool to follow up the progress of the construction works, and check for delayed works. Generally the construction of the Villa can take between 6 months until 1 year depending on the size and characteristics of the Villa.
- 8. Building/Construction Taxes.
This tax is a VAT (value added tax) on the cost of constructing a new building. Construction taxes PPN are generally supposed to be responsibility of the building contractor or developer but this condition should be clearly defined in the construction contract. If not, then the owner of the villa will have the legal responsibility to pay for that. Make sure you get original building tax receipt from contractor.
- 9. Construction Guarantee.
Generally Standard guarantee periods of 5 years for structure, 1-3 years for roof and 6 months for everything else from the Contractor.
- 10. CAR Insurance.
It is very advisable to make sure the contractor has insurance on your building during the construction (you may ask copy of the insurance policy), and at the completion of the works the contractor should cancel such insurance.
These are very important aspects to consider during the construction of the Villa:
* Control Procedures and Standards
* Technical Specifications for Construction Materials and Works
* Health and Safety Policy
* Environmental and Social Management Plan
* Eco Friendly Solutions
We are fully responsible for developing, implementing and supervising all our Building Policies to ensure that the construction of your Villa respects all Labour Standards, Quality Standards and takes into account the protection of the Environment and the respect to the Local Tradition and Culture.