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Bad building work, cowboy builders, rubbish refurbishments, unfinished and overpriced work regularly dominate the Citizens Advice helpline for consumer complaints, despite the advent of organisations like Checkatrade, Trusted Trader and Mybuilder.com.

Many, including trade organisations like the Federation of Master Builders (FMB), have called for the industry to be regulated, while the launch of PropertyHeads seeks to develop a database of convicted rogue traders.

However, in reality, history has taught us that self-regulation is invariably a toothless tiger and while naming and shaming can be impactful many people are embarrassed, blaming themselves for being gullible and allowing themselves to be ripped off.

Prevention and Cure

So what’s the answer? The problem is one of two parts, prevention and cure.

The first stage, the negotiation and pre-contract stage is where the problem starts. Invariably callers to our advice line don’t have written quotes or written contracts including a schedule of work and payment program.

This can be easily rectified by either having the documents checked or re-written by a lawyer.

Secondly, while the builder knows pretty much everything about you, i.e. who you are, where you live, where and when you work etc. You don’t know anything about the builder, made worse the exponential rise in the formation of limited companies which provide a high degree of anonymity.

By simply requesting and taking a copy of the builder’s driving licence and a current utility bill or bank statement, you change the dynamic. Incidentally, just because the contract is with a limited company doesn’t automatically protect the directors from personal liability, more information about which will be the subject of a future article.

Payments and Payment Schedule

Once the basis of the contract is established, which mitigates the risk of the opportunist rogue builder, the next issue is the payments and payment schedule.

This can be a bit tricky, treading a fine line between protecting the builder from non-payment and protecting the homeowner from non-performance. The central issue is ensuring the amount paid is commensurate to the progress of the project and the works completed. Alarm bells start to ring when you get into a position where you’ve paid most of the contract price, but the job’s only half done.

Remember, the purpose of the contract is money, at least as far as the builder’s concerned: paying them too much too soon has an adverse effect on the incentive to complete the job on time or at all.

Also, there is a tendency for builders to use money paid from one job to help fund another, which is all very well but it can lead to a sort of Ponzi scheme leaving you out of pocket with a half-finished job. Keeping the payments tightly correlated with the progress reduces this risk.

What to do When Things Go Awry?

All this is very well but what do you do when things start to go awry? Importantly, one thing we do know, is things only get worse the longer they’re left without being dealt with. So, as soon as there is an issue with either the quality of the work, attendance of the builder or the payments edging beyond the progress, stop the job: more accurately suspend works.

This gives you the opportunity to take advice, re-evaluate the position, discuss with the builder and commit any variations to writing. This can cause some frustration between the parties and may leave a bit of a bad taste in the builder’s mouth, but it prevents things getting too far out of hand.

What tends to happen is the builder exploits the vulnerability of the homeowner in needing the house finished by Christmas or before the baby’s due, for example, to increase the price or the payments.

However, if you succumb, you’ll set a precedent and find yourself on a slippery slope which will likely substantially increase the price without any security of completion.

This is the time to get legal advice and get the contract back on track, this may involve a variation of contract or an ancillary agreement or perhaps even to realise it’s time to cut and run.

Stormcatcher specialises in resolving building and home improvements disputes at any stage of the project – call us today for first free advice.