Home renovations, solar installations, and water-saving projects are on the rise. However, the MBAWC warns that homeowners who enter building agreements without fully understanding both their and the appointed contractor’s rights, responsibilities, or the importance of clear contracts and insurance, risk costly disputes. Highlighting the scale of the problem, Sihle Zikalala, Deputy Minister of Public Works and Infrastructure, noted at the 2025 International Construction Law Association Conference that South Africa is spending considerable amounts of money due to disputes within the construction sector.

“Disputes have noticeably increased, especially in the renovation and retrofit space,” says Chandré Abrahams, MBAWC Marketing Committee Chairperson. “Homeowners are eager to upgrade their properties but often rush into projects without understanding the contracts, warranties, or insurance requirements. Rising material and labour costs add further pressure, which can heighten conflict when expectations and agreements are unclear.”

According to the MBAWC, the most common mistakes homeowners make are simple, but costly. These include signing contracts without reading, or understanding, the fine print, not confirming that a contractor is registered or accredited, assuming verbal promises are binding, overlooking warranties and insurance, and failing to agree on clear timelines and payment milestones.

“Poor communication is one of the biggest culprits,” adds David Gelb, MBAWC’s Membership Services Officer. “Many homeowners don’t communicate their ideas clearly or have a fully developed project plan before work begins. Often, they choose the cheapest quote rather than the most suitable contractor and that decision can have long-term consequences.”

Gelb stresses that homeowners and contractors must start every project with a ‘meeting of the minds’. “A fair contract should clearly state, amongst other items, start and finish dates, penalties for delays, agreed payment terms, insurance obligations, and dispute resolution processes.”

A fair contract protects both homeowner and contractor. Abrahams notes that it is essential that all parties fully understand clauses like ‘retention’ (holding back payment until defects are fixed) or ‘provisional sums’ (estimates vs. fixed costs). “These details matter when things go wrong,” he says. Homeowners should ensure the contract clearly covers scope, timelines, quality, warranties, and dispute resolution.”

Ron Petersen of Risk Benefit Solutions agrees, “The contract should also match the project’s scale and complexity,” he says. “A simple one-page document might suffice for minor works like fitting a window frame, but a full renovation or new build requires a more detailed contract, such as the JBCC (Joint Building Contracts Committee) agreement available through the MBAWC.”

He also warns that one of the most overlooked issues is insurance responsibility. “In new builds, the contractor typically takes responsibility for contract works and public liability insurance risks as well as the Sasria cover or political riot cover. The policy is to be issued in the joint names of employer, contractor and subcontractors.

However, for alterations and renovations, the homeowner has responsibility for the contract works insurance and Sasria in the joint names of employer, contractor and subcontractors,” Petersen explains. “Not clarifying this upfront can leave costly gaps in cover.” The construction period must also be specified in the policy, and insurers notified to extend coverage if the project runs longer than expected to avoid the insurance lapsing.

“Homeowners often forget that renovations can change the value and risk profile of their property,” Abrahams advises. “It’s essential to inform your insurer before starting work, as adding solar panels or making structural changes can affect your coverage. Failing to disclose these upgrades could invalidate your policy.” Gelb adds that most insurers require an endorsement on the standard homeowner policy during alterations, including the contractor’s details and project duration. “The insurer needs to know about any material changes to ensure you’re properly covered.” Says Petersen, “For example, a standard homeowner’s policy may suffice for small projects like installing a kitchen, but major renovations usually require a separate contractor’s all-risk policy.”

Equally vital are warranties for materials and workmanship. “These protect homeowners against early failures or defects,” Abrahams says. “Always request written warranties from both the supplier and contractor and keep them safe. They’re your safety net if something goes wrong after completion.”

Even with the best preparation, disagreements can still arise. “Early resolution is always the most cost-effective path,” says Abrahams. “Start with direct communication, then mediation if necessary. The MBAWC can provide guidance or facilitate discussions before things escalate to arbitration or court.” Gelb adds that most standard building contracts include dispute resolution clauses, but homeowners often don’t know they exist until it’s too late. “Know your contract. It’s there to protect you.”

Knowledge is the best protection. Homeowners who understand their rights and responsibilities can ask the right questions, insist on fair terms, and reduce the risk of disputes. Careful planning, choosing a reputable contractor, ideally an MBAWC member, and documenting everything are essential. As Petersen says, “The best foundation for a home project isn’t concrete, it’s a solid contract and a clear understanding of your cover.”

Through its resources, guidelines, and contract templates, the Master Builders Association Western Cape (MBAWC) supports homeowners in making informed decisions and accessing professional guidance when disputes arise. It also emphasises the importance of using recognised industry-standard contracts wherever possible. In addition, MBAWC collaborates with experts such as Risk Benefit Solutions to offer advice on insurance and guarantees.