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...

[BellyBean]

Can you take him to court for the remainder? Ccj?

[Anatidae]

Don’t pay PM a penny more. He owes the project money!

I would be asking for proof the PM paid builder one - he MUST have this if it’s above board. If he doesn’t, you’re looking at fraud and then it’s a legal matter. If he does have it, you have the contact details of builder one.

[lalalonglegs]

If your architect has used the PM before, then perhaps see if s/he can find out who B1 was - if, indeed, he existed. I would also be trying to find out who the firm dealing with the worktops order is so that I could check that money has been paid and the order made. I personally wouldn't sack the PM today as I would be fishing for some this information first. Good luck.

[VladmirsPoutine]

I'm not really following but either way surely the deposit you paid and has subsequently disappeared is now the PM's problem. If you have something in writing then the onus is on the PM. It's not your job to contact B1 by virtue of the fact that your contract is with the PM. By 'lending' him the money you'd be throwing good money after bad. In fact I'd be inclined to pursue the PM via the courts as he hasn't fulfilled his end of the contract.

[BrioAmio]

Who is your contract with? Builder or project manager? I work in the industry and it’s jobs like this that cause me the biggest headaches, I have just taken a project manager to court for not paying us, despite them being paid by their end customer for our work.

Until we know who your contact is with it’s hard to give the correct advise.

[NapQueen]

This is absoloutley shocking! Ill bet he didnt pay b1 who then walked off the job.

[glitterbiscuits]

Have you looked into the background of the PM? Any reviews on line etc? Can the architect give you references from other projects they worked on?

I feel the utmost sympathy for you. You have stress/ mess and financial worries. One is bad enough.

It’s useful information for anyone considering building work to read your experience.

Best of luck!

[HagueBlue]

Just getting back to latecomers - I actually think we're sorted on what to do about this now, but appreciate it's a bit of a conundrum...

• Our contract is with the PM, not the builders. We've never met Builder 1, and don't know the details of the agreement between them.
  

• Yes, the onus is on PM to track down Builder 1. He's always said it's his problem to sort out. He says been chasing but has taken no legal action yet.
  

• We're not paying the PM a penny more, as a loan or otherwise.
  

• PM just sent a further begging email saying he needs to be paid £12.5K TODAY so Builder 2 doesn't walk off the job. I've spoken with Builder 2 this morning who has confirmed that he made no such threat (although he came close to it a few weeks ago).
  

• Builder 2 also mentioned that PM went through a bad relationship breakup and ended up losing a large amount of money and his Bugatti with personalised plates as a result (My heart bleeds!!)This is NOT MY PROBLEM, but solves the mystery about where all the cash disappeared to, and why he's reached such a low point that he's begging for money off his clients.
  

• Builder 2 and I have just talked through every part of the job agreeing on exactly what else needs to be done. He will calculate and give me a breakdown of how much he needs to finish the job. I will pay him directly, and that is the amount I will be asking PM to re-pay.
  

• We've received PM's proof of identity and address so hoping that will make him easier to track down if legal action is required. I'm reading up on CCJs now too.
  

• I was about to press send on an email confirming that the contract is being terminated but actually want to first innocently ask what has happened with the worktops, 'just before I make the transfer'. I just hope he's not reading this thread.
  

And thank you glitter, very nice of you. I actually feel better now knowing that it'll be sorted in the end, and fortunate that we did have this contingency put aside. The uncertainty is the thing that gets you.

[IceFall]

Wow so the PM is lying to you as well! Super dodgy...

What a horrible stressful situation. I do hope you get it sorted with nice Builder 2 and you get your cash back from PM.

[SparklingSnowfall]

Gosh I've just come across this thread, glad you're getting sorted OP otherwise I'd be jumping on the 'don't pay the PM and make him pay back everything he owes' bandwagon!

[Ellisandra]

Please don't be so passive about "I guess we won't see the worktops"!
Take this fucking criminal to court!

[Whatthefoxgoingon]

Your PM has definitely scammed you. I’m almost certain he never gave the deposit to Builder 1. To anyone reading this, never pay up front for building work. Pay in stages for work completed. You have absolutely no guarantee the work will be done if you pay up front. Also, don’t make a contract with a builder you’ve never clapped eyes on.

Glad you’re dealing with Builder 2 directly. Take the PM to small claims court. It’s up to him to take Builder 1 to court, if Builder 1 even exists.

[StormTreader]

Im thinking he has spent the 12.5k out of the deposit, took out a loan for the money he paid builder 2 to not walk 2 weeks ago (or borrowed it from someone elses job/deposit), and he needs to pay back wherever that borrowed money came from today, hence his urgency.

[Puzzledandpissedoff]

will calculate and give me a breakdown of how much he needs to finish the job. I will pay him directly, and that is the amount I will be asking PM to re-pay

It's no surprise at all that the PM's turned out to indeed be a crook, but your plan above sounds sensible. When he doesn't repay you I'd definitely take him to small claims as it will cost very little in comparison to what you've already spent; it will probably drive him into bankruptcy (and no doubt a change of company name ) but that's not your problem

And for anything in the future it's worth bearing in mind the PP's wise words: never pay up front for building work. Pay in stages for work completed. You have absolutely no guarantee the work will be done if you pay up front

[HagueBlue]

Great advice Whatthefox, hopefully my experience can be a cautionary tale for others thinking about embarking on a major project. In my defence, PM had good references which we checked before signing, he came recommended, had managed similar projects which went smoothly etc. Our mistake was being overly keen to start the work quickly - we ended up paying more upfront than we should have and continued after the Builder 1 story as we didn't want to sacrifice the deposit.

Honestly, I think PM has just fallen on bad times and make some bad decisions. He didn't set out for this to happen.

PM called once we gave notice. He apologised profusely of course. Asked if there was any way we could re-consider - suggested various ways in which we might continue working with him (i.e. giving him money). Admitted that the worktops hadn't been paid for. Said he would pay us back what he owed us once his next job started in January.

He was also very concerned about his reputation and didn't want word getting out that he's in this situation. Didn't want to be blacklisted by architects & builders he works with. Again, not my problem. I have to speak openly to Builder 2 (who is also owed money by PM) about this in order to agree a cost, so I can't be responsible for protecting PM. Builder 2 is very supportive of us and angry at PM, has told him he won't be working on any more jobs with him.

Ellisandra if I seem passive, it's because I'm flipping knackered and I just want it to be over. I promise I'll get my mojo back once this is all finished and will chase him down for every penny he owes us.

[StormTreader]

I have a friend who was in a very similar position - PM with a first builder that took money and then bailed, so they had to get a second one in.

Their PM took on extra work in addition to their project in order to get the money to cover the losses from the first builder, he did not go to my friend for it.

[Puzzledandpissedoff]

He was also very concerned about his reputation and didn't want word getting out that he's in this situation

More likely he's worried about a deluge of financial demands from whoever else he's tried to defraud - and if he "didn't set out" to do this, there are a number of options he could have taken instead of cheating you

And he's still suggesting you give him even more money??? Throw the book at the sod and resign yourself to the fact that, despite pretty promises, you'll get nothing out of him unless you sue

[Whatthefoxgoingon]

Hague, it may well be that the PM has mismanaged his finances and gotten in over his head, rather than criminal intent from the start. This doesn’t change the fact that he’s lost your money, and it’s not up to you to salvage his reputation. I can see why you’ve trusted him but, always watch your back even if someone has a good reputation, they can still make mistakes with your money.

I would get aggressive with this guy. You’ve decided not to bail him out (great!) You have an arrangement now with your current builders (great!) Your work will get done. I would threaten to make this PM’s name mud if he doesn’t return your deposit money. You need to set a deadline for this. Otherwise tell him you will go to architects, trading standards, RICS, small claims court, social media etc etc. £12.5k is not a small amount to write off and I would get this guy on principle. He should not think he can go do this again to someone else.

#iamruthlesswhenwronged

[Gemini69]

wow.. very well done on taking the bull by the horns... your Builder 2 sounds like a bloomin treasure OP.... keep his details on speed dial

[mickeysminnie]

So not only did 'builder 1 'disappear', but the money you have him to pay for the worktop has also been stolen? So he now owes you €15,500?
Seriously, ring the police.

[ItsHuge]

Have you got enerythung in writing OP?

[SD1978]

It seems to me, given he was going to use the deposit from the next job to pay you, that maybe this is how he works, job 2 pays for job 1, then job three is used to reimburse job 2, etc. this is not a smart way to do it, and obviously the whole scheme has come crashing down- as you had references, and an architect who had previously worked with him successfully. Or he uses the fund from job 1 to get job 2, and their deposit pays what is owed from job 1. Either way, it’s a precarious way to do business, and has clearly all come crashing down. I’m sorry you’re caught up in it, and I really hope you are able to recoup your money xx

[Sugarcoma]

Do not lend him money.

Tell him it is his responsibility to find the money - whether from Builder 1, the bank, his mum, whoever - so the job gets finished.

Does your contract with PM specify an end date? If it does and it overruns he is in breach of contract or if Builder 2 downs tools and it ends up costing you more money to finish tell him you will be pursuing it through the small claims court.

[Sugarcoma]

Sorry just RTFT. Sounds like once you’re up to it you should pursue PM for the full 15k through the small claims court.

If he’s worried about his reputation though that’s a good sign. I would push to get your money back before Xmas btw. He says now wait for Jan, in Jan he’ll say March etc etc.

[TempletonTreeThorpe]

If a PM can’t cover 12k from his own pocket you’ve picked a shit PM. Not only would I not be giving him 12k I wouldn’t be paying his remaining 2k because he’s been crap