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Step 5: What Is Involved in Building a Home of My Own?
All the financial aspects have been arranged; now the construction of your first house can proceed. We can use our expert knowledge to assist you.
Purchasing Building Land
A prior examination of the land register and area plan is essential when purchasing building land. Before buying a plot of land, make sure you understand the ownership situation and any existing land charges (mortgages) and easements (e.g. rights of way). Provided you have the permission of the landowners, you can pay a fee to obtain an extract from the land register at the relevant registry office.
Construction Loan
There are a number of types of construction loans to choose from when financing a new-build or renovation project. In the case of a traditional construction loan in the form of a current account credit secured against real estate, the bank monitors the progress of the project and disburses the money accordingly. When the project reaches completion, the construction loan is converted into a mortgage. Parts of the construction loan can be converted into a mortgage loan at an earlier date and forward fix mortgages can be agreed in advance to become effective when the construction period ends.
Choose Your Contractors Carefully
You can find information about your contractors, and especially about architects, in specialist publications, at real estate and construction fairs, by talking to specialists and people who know architects, by making inquiries among your friends and contacts, and by walking through residential districts. Lay down the performance obligations for planning, costs and construction itself in a contract.
The Architect: Both Designer and Agent
If you work on your project with an architect, you retain responsibility for all parties involved (specialist planners, the architect, tradesmen, builders, and local authorities). The architect acts as your agent, obtaining approvals and entering into legally binding contracts on your behalf. After issuing a request for proposals for the work and undertaking a basic comparison of the bids received, the architect concludes contracts with each individual building company and tradesman (SCO Art. 363-379).
The Project Supervisor: Your Cost Controller
If you yourself are not prepared to keep a constant watchful eye on costs, it's wise to employ a project supervisor in addition to the architect. There are hundreds of individual decisions that can push the price up, and most construction cost overruns can be traced back to the owners' own particular preferences.
The General Contractor: Your Partner for the Construction Works
A general contractor is responsible for carrying out all the agreed construction and fitting work. This is documented in a signed general contractor's agreement. A distinction is made between a lump-sum contract with a guaranteed fixed price, a contract on account, and a contract with a capped cost.
The Sole Contractor: The Professional for all Steps in the Construction
A turnkey contract can include the entire process of scoping out and planning the project, sourcing the materials and carrying out the construction up to the point of handing over the keys to you, all for a fixed price. In this case, as well as providing a clear description of the works and the building, you as the owner must also check above all whether the contracted services are performed in full, on time and to the required quality standard.
Liability
In all contractual relationships, you should pay particular attention to the way that liability is apportioned. To ensure that you are protected against any loss, we recommend that you take out builders' liability, contract works, and construction period insurance coverge.
Please also note that the directives of the Swiss Society of Engineers and Architects (SIA, the profesional association that represents the Swiss construction industry) do not impose a general liability; they are valid only if specified as applicable by the parties to the contract.
Credit Suisse Can Assist You in Evaluating Contractors
Ask for references and look at the properties that your potential contractors have already built. We will be pleased to assist you in reviewing the references, as these are an important factor in our decision to grant a construction loan.
The formalities have been completed; now there are only a few days left until you can pack the crates and then unpack them under your own roof.
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