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How to deal with the builder?


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Hi everyone,

I was wondering how you deal with the builder on refurb projets. Specifically in regards to payments and timeframe. I'm interested in:

- Do you pay your builder upfront or after the work or maybe you pay installments once defined milestone is reached? 
- Do you pay deposits before work commences?
- What do you do if the results of refurb are not as anticipated?
- How do you secure yourself from builder running away in the middle of refurb?

I'm a newbie in dealing with third parties :)

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You are entering into a contract, it would be preferable to have a written contract in place, as you may not wish to make that contract on the terms of business a contractor presents as a quotation.  The contract needs to be appropriate to the scale / complexity of work; however up front payment (why would this be reasonable), non explicit standard of work (specify what you want), and uncertainty of determination and duration should all be resolved before you start.  

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Hi 

Speaking as a builder - do not pay upfront! 

We always ensure a contract is agreed to protect both us the builder and you our clients! As Alastair mentioned the contract should be appropriate to the scale of the project with agreed payment terms  -  monthly, fortnightly or on stage payments for given milestones etc. These should be set out together with a full breakdown of costs, what drawings / specifications the works are based on should any changes be made etc. 

The JCT Home Owners contract is a good starting point for most domestic refurbishment works. I wouldn't trust the builder to stick around if they wont commit to signing a contract!

Regards

David

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2 hours ago, david gilmore said:

Hi 

Speaking as a builder - do not pay upfront! 

We always ensure a contract is agreed to protect both us the builder and you our clients! As Alastair mentioned the contract should be appropriate to the scale of the project with agreed payment terms  -  monthly, fortnightly or on stage payments for given milestones etc. These should be set out together with a full breakdown of costs, what drawings / specifications the works are based on should any changes be made etc. 

The JCT Home Owners contract is a good starting point for most domestic refurbishment works. I wouldn't trust the builder to stick around if they wont commit to signing a contract!

Regards

David

Thanks a lot for insights! Really helpful advice 

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  • 2 months later...

Hi,

Hopping on this one as well.

Our builder has given us a quote and it stipulates 50% paid upfront. Baring in mind he is charging us 8.5k then a bit hesitant as you an imagine to sign 4+k over to someone I have only met a few times.

What would you advise? Doe's anyone pay 50% upfront, dont want to be shafted, also need someone to start the work end of October which he can so rock and hard place.

Thanks 

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Hi,

The principle still applies that you should not pay upfront. Its possible he's had his fingers burnt before with customer's not paying - so its a method of protecting himself but its really not good practice and I would say avoid! If you're caught between a rock and a hard place though I guess it comes down to a matter of judgement whether or not you can trust him? Have you checked references with his previous customers? Ask for the numbers of his last 3 clients and check with them that they were satisfied with his work, costs etc

good luck

 

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Just no.  If a contractor is unable to fund materials procurement (common reason for advanced payment) are you wise to rely on them having sufficient resource/capitol.  If they are concerned with payment being withheld, suggest a monthly/weekly valuation - paying the works completed (this is how industry contract work); or to pay all materials receipts (just confirm the contractor has paid for them and they aren’t held on account). 
 

Personally, this raises more questions - is the contract fair; from your perspective is there a rectification period, is retention held, once 50% paid is there incentive to achieve the programme / commence on time, how are variations valued.   

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  • 1 month later...

As a refurber....

Agree a plan.

Stage payments.

Ensure building control are involved and check with them to ensure it's all up to scratch.

Make an agreement that sometimes things will over run or things will go wrong. But equally, if it goes smooth then a reduction is needed.

Be honest with the builder. And as long as they speak plane english to you and your gut feel comfortable with them then crack on.

I'm doing a refurb at the moment and have offered to sort stuff for the people next door 'at cost' as I benefit if their place looks better. £144 ( inc. VAT ) for removal ( grab loaded ) of 12m2 of concrete / bricks... £110 labourer for demolition.

Some builders are ok. Developers could be better.

 

 

 

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  • 4 weeks later...

I am currently finishing off a refurb where I employed a builder to take the full contract totalling about £45k. This has increased to £50k due to extra issues that arose with the property after demolition - remember to be prepared for the builder to ask for more money for extra work not written in the contract.

Never pay anything up-front unless the builder has a legitimate reason, in my case they needed about £2k worth of materials which I was happy to pay for up front so they could make a start. Once they had made a start on the job, I continued with stage payments to the builder after the work had been done, each payment was between £3-£5k paid once or twice per week as the work was being carried out. We agreed on the final 10% being paid a period of time after completion to allow for any snags to be resolved.

 

Remember, the builder/contractor has to pay for their materials and labour during that time. If they have given you a reasonable quotation, their margins will be tight and you don't want them struggling for cash during the work.

 

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If were carrying out the works, I would request a decent bunch of funds to cover the materials. Upfront ect. Then stage payments. Problem is some 'customers' can come up short at the end of a project and then the builder is stuffed. The trust has to go both ways and if you've not worked with them before I don't think any trust can exist, as such, get a contract in place. It's also normal for budget over spends, esp. when decisions are changed or when someone changes their mind or unforeseen works occur. It's a hard balance to strike. Fortuantly, I buy my own property and do it up, so rarely do I need external input.

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33 minutes ago, pauldavidthomas said:

 It's a hard balance to strike. Fortuantly,

Really disagree with this.  A written recognised contract, with clear concise and comprehensive employers requirements, significantly minimise grey areas.  
 

Without a recognised contract and full design.... that’s when changes, costs, disputes arise. 

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Alastair, Yep, with a fully written comprehensive contract you can iron out all possible issues. Alas life and projects are not always like that. But, a well written contract of employment would solve most of them. But to be able to write such a contract you probably need to understand what can go wrong to be able to identify it in the contract.

And I have to say I've never worked in a conventional style which has probably stunted my financial growth as I fly a little too much by the seat of my pants, it's not everyone's style but it works for me.

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