Builder wants to change to Labour only contract

[Ilelo]

Hi
Looking for some advice please. We recently started our extension and loft conversion. The builder said they would do it simultaneously to make the job faster. Last week he said he has run out of money and wants to change from an all inclusive contract to a labour only contract.

He hasn't been able to pay his staff so no one has turned up but him 3 days in a row. We have asked for receipts for materials bought to date to check but we don't have that yet, he said he will get them. What we've paid to date was same quote that someone else gave to finish the loft. There's a lot of material sitting in the garden but there's nothing significant to show. Nothing is nearly completed or anything. We notice he's not very good at managing his staff as they have too many breaks. They are paid per day.

1. Any ideas how to go about a labour only contract? If we pay at the end of each week etc but we don't want them dragging it out as we don't really know what can be done in what time.
   
2. Any advice please? It feels exhausting already. What would you do?
   

Thanks

[PigletJohn]

Look for another builder.

I hope not too much money has gone down the drain already.

[yomellamoHelly]

It'll potentially cost you lots more.

Would be assessing how much has been spent already and how much it'll cost to finish and whether the work he's done to date is up to scratch.

You may have a problem finding someone else to take over the job. What a horrible position to be in. What does your insurance policy say?

[brumeye]

Sorry to hear you're having builder trouble - we're towards the end of an extension project ourselves so know how stressful it is (even when things go well).

Hate to say it but I agree that I wouldn't trust this builder with any more money. If he's proven he can't manage his cash flow or keep the project on track, I don't see any reason he'd suddenly improve.

Builders who've done work for me have only billed in stages for work they've already completed, which protects the customer from this kind of issue to some extent

[Marmitelover55]

We paid lots of the builders suppliers ourselves, so our builder could keep his turnover lower (perfectly legal for vat reasons). That worked fine. I think you would need a fixed price quote for labour only from the builder, rather than a day rate, so they don't drag it out.

[Ilelo]

Thanks everyone but the earliest one of the other builders can start is 3 weeks and he doesn?t even know it is work in progress yet. We do not have a roof at present as they took it all off. So desperate to get that covered. We met with him yesterday and what was left unaccounted for of what we paid so far is ?2k for which he said he will bring in the receipts. Pretty much everything had our address as delivery address and his staff sign for wages and date. All same people that have been at ours. It appears the issue is, he started too at same time hence ran out of money quickly.

So we've asked him to have a meeting with his staff and come up with a "firm" plan on how they will complete the works by week for however many weeks they believe they need. He's already told us 10 weeks but we need his workers? buy in. We've agreed to pay labour for the next 2 weeks as long as our roof is back up by then, then pay labour every week minus 20% which we hold until the end. They are working again today. I have said no long lunches/tea breaks :-), neighbour says work is going on. Neither of us is home 3 days in the week no idea what goes on those days.

This is what needs/has been done-
(1) loft conversion (already done- steel beams, floor/roof/dormer joists in place, side wall almost bricked up). Front still bare, nothing at all as roof was completely removed, floor/roof/dormer etc still need to be insulated and covered. Then all the internals works to create room/plumbing etc
(2) part single plus part double storey rear extension (already done foundation) and bricked up to existing floor level.
All the works that have been done to date have been approved by building control.

We are meeting again today. What is a reasonable timeframe for completion and with how many people working? (apart from specialist like Gas, Electrics, Plumbing etc). Any idea how we know how many people are working (I think it might be a daily rate per person).

Assuming the next 2 weeks go well, we get a workable plan and tear up current contract ... should we be incentivizing them to get it done? Is it reasonable to say if they are able to complete it in the timeframe we?ve agreed, we will pay a bonus (x%) but if they don?t, we will take off x% each week after the 1st 2 weeks etc.

Thanks.