Cowboy Builders

Problems with Builder Contracts and Quotations

Q - Some friends of ours have just had a bad experience with a firm of cowboys building their house extension. We will be starting our self build in a few months time and are anxious that we don't have the same worries because we do not have any building knowledge or experience at all.

A - The safest way to employ contractors is by recommendation from people who have used them before. When talking to prospective builders ask them for a list of similar jobs they have carried out recently and tell them that you intend to contact their previous clients for a reference. If they seem unwilling to do this , you can draw your own conclusions and try someone else.

Don't deal with firms that only have a mobile telephone number - a land-based number shows stability. Don't employ anyone who knocks on your door looking for work. Good contractors are busy people and don't have the need to go out and look for work by cold calling.

If you can't find a recommended contractor, look in Yellow Pages for members of the Federation of Master Builders, the Institute of Plumbing and the Electrical Contractors Association. These organisations monitor their members activities but some other bodies merely charge a joining fee without checking on the merits of the applicants.

Finally, if you see some similar work going on in your area, ask the property owner in the evening whether they would recommend the builder. Most people are very keen to be consulted in this way and would be keen to help.

Q - We are in dispute with our builder and would like some advice on what to do. He is running three months behind programme and the signs are that things will get worse. In the meanwhile we have sold our house and are under pressure to move out. He still has about two months work left to do but he is asking for more money from us to cover the cost of the delay he claims was caused by bad weather and late delivery of materials.

But the real reason for the delay is that he hasn't had enough men on the job. On a few occasions there have been three days in a row with no one there at all. We believe that he has financial problems and we are concerned that if do pay him the extra £5,000 he is asking for, it will make no difference at all to the progress. What should we do?

A - Don't pay out any more money until the work is completed to your satisfaction so you'll need to do some straight talking with the builder. Hand him a list of outstanding items and set an achievable completion date. Tell him that if the work is not finished by then, you will employ another builder to complete it and you will deduct any extra costs you incur from his outstanding monies.

Keep a record of all meetings, telephone calls from now on and also prepare a history of the job to date in case things go to court. Try and assess the extra costs you have incurred through his poor performance - extra travelling, rent and the like. It is time that this builder took his responsibilities more seriously. If this course of action doesn't work, consult a solicitor.

Q - Our builder 'forgot' to register the work with the NHRBC and to get over this problem our architect had to take out professional indemnity insurance at a much higher cost. What is the financial responsibility of the three parties involved and should the six year cost be split between us? Would we have had to pay for NHBC cover, if so how much and should we donate this to the architect and deduct some from the builder? I just want a fair solution so that nobody feels out of pocket.

A - The builder appears to be at fault here because part of his contract must have been to provide you with the certificate and the cost of this would be included in his quotation. It is puzzling why the architect's existing professional indemnity cover needed upgrading. You are looking for a fair solution to this problem but the innocent parties in this matter, you and the architect, should not have to pay anything. You should contact a solicitor to act on behalf and protect your interests.

Q - Our builders want 50% deposit before they will commence on site. I am sure that this is over the top and think that 10% is reasonable to allow them to buy materials to get started. I would then make interim payments every month. And should I retain some monies for snagging payable three months after the end of work.

A - The builder's request for an advance payment of 50% is far beyond any normal trading practice. The only situation where you would consider making any advance payment would be if the builder was well known to me, lived locally and was a one man firm or similar. Under these circumstances you could perhaps consider it and but don't hand over a cheque. The money would probably be for materials so I would open an account in your name at a local builders' merchant with a stated limit for the builder to use. In that way you would retain ownership of the materials and know that the money was not being used for other purposes.

However, there is a danger is that your builder may be in financial difficulties and would use your advance to pay off old debts to keep trading and then not be able to finance your job. This sounds extreme but it has happened before. But finding builders these days is difficult and you may be reluctant to risk losing him by taking a hard line, particularly if he is known to you. So your suggestion of 10% advance plus interim payments may then be an acceptable compromise.

In larger building contracts it is normal to retain 5% from interim payments dropping to 2.5% on completion to be paid off in full three or six months late when any snagging is complete.

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