Building works - advise needed!!! Please help..

[rhools]

Our builder gave us our second invoice last Wednesday 28th July, we made the payment via BACS on Sunday but as of yesterday the payment hadn't reached his account. Bank said latest it should arrive is today. On Tuesday 3rd Aug at 6.30pm the project manager confirmed that a third invoice was now due to the builder.

I then received a nasty email from the project manager (who I don't have a good relationship with) yesterday (4th Aug 11am) saying that if we don't pay the builder for both invoices by 3pm that day, the builders would walk off the job. That the builder had lost confidence and was worried that we wouldn't pay him.

I sent an email back to the PM saying that a 6 working day turnaround was not unreasonable (BACS can take up to 3-4 working days!). Although we had received the second invoice on Wednesday, we only met with the PM that following Saturday who confirmed the amount, so we paid the next day. He then responded that 6 days is not good enough. Payment should be immediate and if an email is sent to us stating that there is an invoice, then it is assumed that they have done their checks. The guy is a prick.

I went home early to speak to the builder myself and through tears told him that if he had a problem he should have spoken to me. I was at the house on Tuesday and if he was worried about payment, he should've mentioned it that day for me to check with the bank. We have now paid him 40% of the total job (I paid the 3rd invoice yesterday via CHAPS) and barely any work has been done. There have been delays because the steels delivered weren't the right size.

If you're still reading this, my question is am I being unreasonable or difficult? Is an immediate turnaround in payment the norm? We've paid our invoices fairly quickly in our minds, am I missing something?

I also want to get rid of the PM but keep the builder. Do you think the builder will go if the PM goes? The PM is a third party (they don't work for the same company) but have worked on a couple of projects together in the past.

TIA for any advice

that sounds horrible. Your PM sounds like a right a* but I suppose the one benefit of having someone like that is that if it is his job to deal with payments etc, you can develop a bad relationship with him but keep on good terms with the guy who is actually doing the work, iyswim.

Still, I think if you have a copy of the transfer receipt that should put everyone at ease. Last time we did works our builders told us about the horror stories they had of people just not paying, so maybe these guys have been burned before? But, I also think it's reasonable to argue that if they aren't sticking to the work schedule that you shouldn't stick to the payment schedule. (So, if they have fallen weeks behind and only 10% of the work is finished, why are you paying as if 50% was finished?)

I don't know if you can get rid of a PM half way through a job but I'm sure your builder would stay on. I would just keep it as professional as possible and say something like "we're looking to bring a new PM on board but hope that wouldn't effect our contract and wanted to make sure you'd be able to stay on." The PM may still get an introduction fee if he brought you this builder, but if he's out of your hair, it's probably worth it.

Sorry you're having trouble though. It is the most stressful thing...

Thanks for your response. The PM has said that we have to pay in advance so that the builder can order windows, steels etc as he doesn't have the cash flow and is relying on our payments. This is fine, but we've asked for a schedule of works and a payment schedule so that we know when we're expected to pay but the PM has said that he doesn't have time to produce what he sees as a luxury?

Thanks again for your response. It's hard to get perspective when you're in the thick of things.

I don't understand why (if they are good builders) that they don't have credit accounts with merchants?

I'm about to have a double garage conversion done by a guy I've known for ages who is a builder. He has done 3 of my friend's extensions so I have seen his work and seen how it progresses. He project manages it but gets involved with the stuff he he likes doing.

His rule of thumb is every Friday he gets paid £3k for work, if they have laid out for a bathroom or a kitchen then it can be £5k or more depending on materials but he has already BOUGHT them and they are on installed.

I would be worried that you have paid for more than you have got. There is no incentive for them to keep going, that's why my builder works the way he does, he lays out, you see the progress, you pay every week.

What does your contract say? Often it will be something along the lines of payment within 14 days of issue of certificate/invoice (and I think that is receipt of payment). technically, if you are not paying according to the terms of your contract, you will be in breach, and the contractor may have the right to stop work.

Have you signed a contract with the contractor/builder? Is the project manager mentioned in the contract as managing the works? Are you working with a standard form contract? Is there a retention being held from each payment?

It does sound as though perhaps the PM/Builder has been burnt before in the past and so they are playing it by the book.

The PM should be working with BOTH your interests at heart (in other words, he/she should be impartial, and working for the good of the prohect, not just protecting the interests of one party or other).

There are no payment terms on teh invoice. We don't have a written contract with the builder. As I write this, I feel incredibly stupid. The PM told us that a JCT contract was meaningless.

The contract with the PM states the stages in which we pay him, we have paid him to date as and when he has requested a cheque so he should not have any issues with our payments. We have made 2 payments to him to date. Other than the fact that we have questioned some of his additional charges.

I don't like the sound of your PM! Who appointed him? Youj or the builder? If it was you, I would say you probably have the right to terminate your agreement with him (though that would depend on the terms on which you appointed him), and appoint someone else. It doesn't feel as though he is representing your best interests.

Of course a jct contract means something. It lays down, in clear terms, all the parameters of your building contract. What has to be done, by whom, by when, what the payment terms are, insurance (is your builder insured? For what? And how much? These are all important to protect both you and the builder! Who would be liable for what if there was a fire that burnt down your house started by the builder?).

So your PM has a contract with you, but syas that having a contract with the builder is pointless? Sounds as though he is protecting his interests only and no-one elses.....

(don't feel stupid, you should have been advised properly, that is one of his duties as PM....)

We appointed the PM. I'm going to check the contract tonight.

Can we retrospectively apply a jct contract? I've requested details of the builder's insurance but haven't seen them. I'll speak to him tomorrow as he's at a funeral today. The rest of his team are there though.

I think if your builder is in agreement, he should be fine signing a jct contract after the works have started. In my experience, it should be something EVERYONE wants, as it is designed to protect everyone's interests and clearly define what has to be done, by when, and on what terms, so should therefore make everyone's job/life a little clearer/more easy.

Good luck. CAT me if you want to chat/email offline.

Thanks a million Orangina!!