To lend money to this project manager?

[HagueBlue]

I feel I need to give the obligatory disclaimer - am a regular but have name changed for this. I'm also going to mention specific amounts of money as it might help people give me advice but I know how that usually goes down on here. Let's see anyway...

Oh, and in AIBU as it's a bit property, a bit legal and a bit financial so wasn't sure where to put it.

Here goes. I'll try to be brief:

• We started an extension in July. We're using a project manager who subcontracts the work out to a builder. We paid him a deposit which he passed on to Builder1. Builder1 did a runner with the money. He therefore got in Builder2, who has been great so far.
  

• We're very nearly at the end of the project, probably 2.5 weeks to go. PM comes to us and says he can't get the money back from Builder1 so can't pay Builder2 for the rest of the work. If he can't pay Builder2 by Friday he'll down tools and go off to another job.
  

• He therefore asked if we could loan him the money to finish the job, and he'd pay us back when he's got it back from Builder1, or more likely when he's got another project which he can collect a deposit from.
  

• If we didn't loan him the money, then our project would have to be finished by someone else at a later date, probably well into next year.
  

• The amount we would need to lend him is £12,500. The total project was originally meant to cost £72K, so it's a significant increase on top of what we've already paid him.
  

• We can just about afford it but that is money that was put aside for other jobs around the house so we'd be living in an unfinished house for longer than planned. We'd at least have a working kitchen though.
  

• We've lived in the house throughout the project (apart from a week at half-term), and living on a building site is starting to affect my mental state. I'm eating pretty unhealthily so have put on weight, can't have people round, dust and mess everywhere etc etc. I recognise that in the short-term, time shouldn't really be a major factor as we'll be living here for at least 10-15 years, but the sooner we can get the job finished, the better.
  

• We've done a rough estimate and think that if we end up having to get someone new in to finish the remaining jobs (some of which is making good the damage caused by this project), it would cost quite a bit more than the £12.5K, and would take much much longer. We like and trust Builder2 to finish the job to a good standard (as long as he's paid by PM of course).
  

• In the PM's defence, he was very apologetic and embarrassed by the situation but said he had no option but to ask us for help.
  

So the questions are:

• Would you lend him the money if you could?
  

• We'd obviously want something in writing (for what it's worth). Is there any form of contract or loan agreement that would protect us further down the line?
  

Gosh, these posts are always longer than you think! Really appreciate any advice / opinions on this - I'd normally speak to my parents but don't want to worry them at the moment...

[lalalonglegs]

It sounds as if you are leaning towards lending him the money. I'd advise you not to but, if you're tempted, tell him you'll do it if he agrees to the amount - plus suitable interest - being lodged as a charge against his home. That should give you an idea of how confident he is of getting your money back...

[Gemini69]

BUtT... he can simply declare bankruptcy after this right..

[Anatidae]

Couple of other things. Have YOU tried to contact b1? Because maybe builder one downed tools and left after not being paid, while pm pocketed the cash.

[Fizzyknickers]

Have you spoken to Builder 2? I’d be inclined to ask him if he has actually said he wants paying by tomorrow.

[Allthebestnamesareused]

Do not pay the money to PM!!

As someone else said maybe VBuilder 1 downed tools because the PM didn't pay him.

If the PM has a viable business his own bank would lend him that money.

[SD1978]

I’m not sure I understand- please be kind! The job will only take £2k to complete, but he needs to pay £12.5k- how does that work? Do you have a lawyer you could speak to?

[HagueBlue]

SD don’t worry, I probably wasn’t clear.* We’ve been making our payments to PM, who has been paying B2 in turn. But the first chunk of money went to B1 instead, and hasn’t been recovered.* So B2 is short by the amount that B1 ran off with. Make sense?

We’ve never met B1 so have no way of getting hold of him.** PM says he worked with B1 for 5 years before this job, and nothing like this has ever happened. (Of course he would say that).

We’re going to speak to our insurance in the morning.* Haven’t spoken to B2 yet but am working from home tomorrow so will definitely see him to ask what the situation is then. All his tools are still here so he has to come back.*

[HagueBlue]

Eek random boldness, sorry.

[SD1978]

Thanks HagueBlue. That makes more sense!

[Missonihoni]

I don't even know the measurement which will be described for the minuscule amount of sympathy you will get on MN if you don't get this money back from this con artist PM.

I would speak to builder
Tomorrow. Wouldn't surprise me if builder 1 didn't even exsist and PM really stands for pyramidscheme manager

[HagueBlue]

And it’s taken a while but we’ve just cottoned on to the fact that it’s probably safer for us to pay the money straight to Builder 2. We’re being waaay too trusting by assuming that PM is going to pass the money on to him.

If in fact he actually needs the money to pay his drug dealer then we’re totally screwed as we’re out of pocket AND our kitchen doesn’t get finished!!

Sorry to everyone who suggested that earlier, I hadn’t thought about it from the perspective of a criminal mastermind!

[HagueBlue]

You’re so right missoni, I wouldn’t deserve any at all.

[Puzzledandpissedoff]

So B2 is short by the amount that B1 ran off with. Make sense?

But how can B2 be "short of" the money supposedly paid to B1, unless he's having to carry out work which B1 didn't do? And if B1 didn't do it, why was he paid with money from the "deposit" you gave to PM?

Please don't tell me PM has claimed he had to pay B1 before he'd done the work? Because if he tries that, he really is ripping you off

[HagueBlue]

Puzzled in the contract with PM we were due to pay a deposit.* That’s what B1 has.* Apparently that was our first mistake, but it’s not outlandish to make an initial deposit, I don’t think...?

PM was recommended by our architect so maybe he’s in on it as well.**

[AnneElliott]

This does sound dodgy op. I would want to see evidence that PM has brought action in the court against builder 1. I would also want PM to give you builder 1 name and address so you can check him out - I agree that the PM may not have paid him at all.

[lalalonglegs]

If the original builder disappeared with £12500 of your money, surely this is theft and a police matter .

[OlennasWimple]

Yes, lala, but it would be for the PM to report the crime as B1 stole it from him, not the OP

[HagueBlue]

Oh don’t worry. The more I think about it, the less I trust PM. I won’t be paying him a penny more. He nearly had me for a while there.

I’ve spent the evening thinking over a few of the steps that have led us to this point and I’m now pretty convinced that it was all a big scam. Admittedly, he did a good job at reeling us in. Very softly-softly at first, then a big ask to finish it off. Textbook stuff.

I’ll get even less sympathy for this, but I also realise that I’ve pre-paid him in full for our quartz worktops which have yet to be fitted. He persuaded us to use his supplier as they offered a ‘cash discount’ so were cheaper than the quotes we’d got ourselves. Again, classic scam stuff - preying on the mark’s greed. I’ll be very surprised if we ever see those. Mea culpa.

This feels very much like a Keyser Soze moment, for any fans of Usual Suspects! I also think the universe is punishing me for my smugness - you hear so many horror stories about builders and I’d been thinking ‘aren’t we lucky to have had things go relatively smoothly!?’ Fool. If nothing else, I’ve learnt a lot from this...

I’ll report back after speaking to Builder2 in the morning. I’m feeling a bit drained right now but tomorrow I might be in a more vengeful mood, and will work out a plan of attack so PM can’t ever do this to anyone else.

Thanks, all.

[NoSquirrels]

Relieved to hear that, OP. Definitely start with the builder tomorrow and see how it goes.

Tell your architect they shouldn't recommend this guy to anyone else as he has significant cash flow issues & no contingency plans in place, not to mention acting unprofessionally in being unable to deliver your project.

[GinandGingerBeer]

Use you words carefully with B2. He could be in on it too.

[Puzzledandpissedoff]

in the contract with PM we were due to pay a deposit. That’s what B1 has

Yes, I get paying PM a deposit, but not him handing £12,500 over to B1 (if he did hand it over ) when little or no work had been done

The "softly softly then hit 'em hard" is, as you say, a classic scammer's move, as was the "cash deal" for the worktops - which he could well have used on someone else's job by now

Obviously get the legal advice you've planned, but to my mind the only option is to put the whole thing right back with him where it belongs and then start an action if he bilks you. Of course he could well have declared bankruptcy by then, but at least he won't have got another huge slice of your cash before doing it

[HagueBlue]

Here's a quick and probably incoherent update, as I'm super late for work already...

Had a good chat with Builder 2 this morning - started off asking quite open questions and he was rather bemused at first, wondering where it was all coming from. He'd had problems with PM a few weeks ago (i.e. PM not paying him due to cash flow issues), but as far as he was concerned they were all resolved. So the Friday deadline was a ruse.

We got down to the details, and said exactly what PM was asking for, and details of the loan he'd proposed. Builder 2 was appalled. He said he couldn't believe PM's audacity and that he must be truly desperate to have asked his clients to do something like that. He advised us not to do it.

He also said he's never not finished a job and didn't intend to start now. He promised we'd be done by Christmas. If we chose to terminate the contract with PM, then we would have a direct arrangement with him. I think that's our only option at this stage. Builder 2 has been great throughout this saga and I'd feel much more comfortable dealing with him directly.

So that's that. We still end up out of pocket and I don't think we'll get our worktops so that's another £3K+ to find, but it's the only option. The termination clause in the contract with PM is very clear so I'm not worried that he can try to hold us to anything.

We'll have that difficult conversation with PM today and will need to work with B2 to reconcile what he needs to finish the job, but I feel like a weight has been lifted off us.

A very big thank you to everyone for your advice, we came close to doing something silly and I'm very very grateful for your support.

[Anatidae]

Try to get in touch with builder one as well. I bet he wasn’t paid either.

You may need to take legal action re the PM

[HagueBlue]

We don't know Builder 1 (if indeed he exists) so we can't do anything there.

Our best case scenario now would be to square things up with PM so we've only paid him for work that has been done, and pay the remainder direct to Builder 2 for work still to do. Realistically, I think that won't happen as PM appears to have no cash to give back to us.

[DJBaggySmalls]

Contact Trading Standards before you do anything else.