builders disaster - advice needed

[patchworkchick]

we have employed a building company, contracts signed, to build a single story extension and fully renovate our flat. The extension is water tight, nearly close to finishing, we are 6 months in (3 month estimated build time). We paid staged payments and full filled our part of the contract, they are now demanding an extra £30 000 or they can not finish the build. The contract allows us to retain the outstanding bill, what should I do. There has been little or no work for 2 months, as the company appear to have used our payments on another project and the men working have not been paid, one threatened me and the police had to be involved - as the company told the men I had refused to pay - having just handed over the third payment I was somewhat non plus. The company came with glowing reviews and is well known local builder. What should I do? As I do not trust them to finish the job if I pay the £30 000 and thats it paid in full.

Sorry, I work for a housing association and recognise the position you are in. Retain all funds and if you can, instruct a good, local solicitor whom you can trust and afford as soon as you can. Are they citing changes to instructions as the reason for further works? Don't pay a further penny until you've had legal advice and/or spoken to the owner of the company, sounds like they are on the verge of going bust having over extended.

I would contact Trading Standards or the CAB. If you have upheld your end of the deal, and paid for what's been done so far, then I would think you are within your rights to sack them and get another builder in to finish the job. But it all depends on the original agreement.

You have my sympathy, we are currently into the 6th month of our 12week building project.

Thank you, just feel trapped and in the middle of divorce. Will contact Trading standards first thing and then call my solicitor.

They could easily be about to go bust. Don't hand any more money over until you have had legal advice. Don't be threatened, take a photo. Don't hand over all that money.

Are they asking for £30,000 on top of the original price and is there anything in the build that could justify that (unexpected and complicated groundwork, up-speccing etc)?

Don't give them any more money, have your contract checked by a surveyor who will be able to tell you if you have grounds to sue and then threaten legal action. It does sound as if the builder is about to go under though so I'm not sure I'd spend a lot of money on solicitors as you won't be able to recover anything once the builder dissolves the company. Do you have legal cover with household insurance?

I'm really sorry that you're going through this. Big building projects are very, very stressful and, sadly, when things go wrong, you can be left helpless and with little recourse.

It does sound like the company are in financial trouble. Do not pay another penny to them until you have had legal advice. Have you told the workers that you have paid and the firm is trying to blame you for not paying them? The firm sound like they have done a good job on you all for the workers to get to the point of you needing to call the police.

I agree with the above. Our builders did pretty much the same. 2/3 of the way through the build, hardly any work for 2 months, tradesmen not paid, suppliers not paid then demanding extra upfront payments when they already owed us some work. They also seemed to have used our money for other projects. We instructed a quantity surveyor to confirm things, refused to pay the builder on that basis and the builder then wound up the business with no assets shortly after.

Don't give them any more money, you won't see it again. Either get legal advice or a report from a quantity surveyor, or both. Unfortunately both these will cost you, but not as much as 30k! Good luck.

Thanks everyone. Called trading standards and all complaints are delt with by the Citizens Advice, so only basic advice given. Called the buildings inspector and trying to get an appointment with a local solicitor. The Builders having demanded the money yesterday evening, have emailed me again saying they can not continue working 'in good faith' unless I pay. The site manager has told me everyone will be taken off today, unless I pay.

There are a few extra's that I was made aware of, nothing huge and I have agreed to pay all those when the work is finished. Paid such a vast amount out already and with so little progress, I really have no trust left.

Don't think I am allowed to name the company but will give them a rating on rated people. Also just discovered their credit rating has been dropped to 0!

Oh dear - this is a horrible situation. Do you think the amount you have paid them covers the work they have done so far and will the amount outstanding finish it off? Given their credit rating, I'm just not sure it is worth doing anything more than some token pursuing just to show that you are not intimidated by them.

If the money owing can cover the rest of the build (or can almost cover it), I would concentrate my energies on finding a replacement builder but it is really important that you have the work that has been done documented by a third party so that no one can claim further down the line that money is still owing and all sorts of jobs weren't finished if they claim to have completed them.

Good luck.

No, parted with so much money feel truly sick. Legal advice has come back and they recomend to sort things out amicably through mediation. As legal route expensive, time consuming and never very staisfactory (spelling ability lost). So have offered a way forward, but not hopeful - will let you know.

They are on rated people and will, RATE them shortly.

What type of contract do you have? Is it an industry standard one or one written by the builder?
Whenever you have a problem with a building project your first course of action should be to look at the contract.
As a consumer you have more rights than as a professional however it does sound like your builder is having credit problems which would indicate financial difficulties and in my experience on too common that they are going bust.
Looking for another builder may not be a be a bad idea BUT do not instruct them to do any work until you are sure of the situation with the original builder. Otherwise you may be liable to pay both sets of builders.
I would seek advice either from your solicitor or a contract administrator (architect, QS)

I have a contract that appears to be written by the building company, they are members of the FMB. The solicitor has advised me and I am hoping my last email will work, if not they are in breach of contract and not me. The architect only did the original drawings and we did not keep him on to over see the build as he charged a fortune and would only work with his builders. They were not very professional and seemed to be pricing the job on what they thought I could afford and not what the work should cost.

I can't quite follow what you are saying, so are you saying with pretend figures
a) the quote was £100k. You have paid £100k work is not finished but they want £30k before they finish?
Or
b) the quote was £100k you have paid £70k they want £30k now before they fish the rest of the work?
Or
c) something different?

Mediation, if possible, is usually the best approach for both sides in such a situation so give it a go if you can.

Did you have a mechanism for the stage payments so that a certain amount of work would be completed before each payment was released?
Do NOT pay up in FULL until all work is finished.

When it appears to be finished but snags may appear then a retention of a couple of thousand pounds or perhaps 5% is normal but should have been agreed in the contract. If it is almost finished with just minor bits and pieces (perhaps less than £1,000 worth of work) then for you to withhold £30k is not reasonable.

Please clarify.

I've paid nearly all the bill, just £5000 short of final bill. The contract states I can withhold £10 000, so issue there. They have been using my money to fund another job and this afternoon pulled all the men off site. Telling all the subcontractors to chase me for payment. The extra money to finish dies appear to be fictitious numbers.

O thanks, I see now. You may have already said that sorry if I missed it. According to the contract they have no grounds to take you to the small claims court because they have not finished and you owe them less than the final payment.

I think you should not pay another penny then.
Try to get them in to finish before you pay any more.

If you suspect that will not happen get another builder in to give you a quote to finish the work.

If it costs say £10,000 to someone else to finish it then may be best to just do that.

If the project is actually going way over budget for no reason then you need to look at the contract and see if you have anyway of getting the original contractor to honour it.

Also, it is a bad sign if work falls behind schedule without reasons.

Thank you, in turmoil.

Take some deep breaths and look at the positives: you have a contract that sets out your and your builder's obligations. Get it checked by an independent person to make sure that you have fulfilled yours (which you probably have but it's best to have this formally recognised).

Have a go at mediation - why not? - but don't put too much hope in it working out. Use the FMB to sort this out (I'm pretty sure they offer this service). But, from what I can tell, your builder has set you an impossible ultimatum (tons of money or he walks away) because he doesn't want to finish the job. He may well be about to go bust which means you won't be able to do anything.

Start asking around for recommendations for builders to get the job finished and have it costed up. It may cost more than the original quote would have but, unfortunately, that's just the way these things work out. If the quotes are well above what you can afford, start thinking about what you can cut down on or do yourself (decorating/cheaper fittings etc).

The important thing is to get the job finished and enjoy your home. Do whatever it takes to achieve this. Do not dwell too much on the builder who has let you down.

Thank you for your wise words, so difficult to step back and see huge bigger picture.