Bulding - hat to do when things go wrong
Discussion
We have been involved in a large bulding project for about a year. The building firm has been looking increasingly shakey and recenty pulled out of the contact half-finished and laid their men off.
It has since come to light that several elements of the work have not been done correclty and have filed building contorl. The long and short of it is that is that we believe they have around 20k of our money which they shouldn't
I am taking advice from a solisitor later in the week, though my fear with litigation is that they owe everyone money and will just fold.
Does anyone have any suggestions for holding them to account.
It has since come to light that several elements of the work have not been done correclty and have filed building contorl. The long and short of it is that is that we believe they have around 20k of our money which they shouldn't
I am taking advice from a solisitor later in the week, though my fear with litigation is that they owe everyone money and will just fold.
Does anyone have any suggestions for holding them to account.
Without being overtly pessimistic - if it looks like the company will fold then I would initiate damage limitation immediately.
The traditional way is of course the legal route - which takes time and means that you may only get back a percentage of your money whilst your project doesnt get finished.
My recommendation if I were in charge of the project would be to go and see the owner of the company and *discuss* the situation from your point of view - be polite but dont leave until you have discussed the complete way forward with his job finished, whether he does it or not. If they are going to fold and/or cannot complete the deal I would negotiate to get back of much of the funds as quickly as I could before and insolvency becomes formal. At that point your money could be tied up for a long while.
The other important thing is to keep the big picture in mind. You need to get the project finished whether he does it or not - otherwise of course you may stand to lose a lot more money that what was being paid to this contractor. This is where 'thinking out of the box' comes into it. If his company is in the death throes of insolvency and cannot pay staff etc - if you can have your cash back, what about the equipment that is on site at the moment (even if you only need it the next few weeks, then you sell it off), and perhaps you could even get a new contractor in and use his subbies - if he cant pay them they will be glad of the work and he will be glad there are a lot less fists knocking of his door for money.
Again, solicitors are there for taking the legal route, managers are there to 'solve' the problem. Think of the big picture, what you stand to gain/lose over the whole project may be a lot more that the figures you may lose to this guy.
The traditional way is of course the legal route - which takes time and means that you may only get back a percentage of your money whilst your project doesnt get finished.
My recommendation if I were in charge of the project would be to go and see the owner of the company and *discuss* the situation from your point of view - be polite but dont leave until you have discussed the complete way forward with his job finished, whether he does it or not. If they are going to fold and/or cannot complete the deal I would negotiate to get back of much of the funds as quickly as I could before and insolvency becomes formal. At that point your money could be tied up for a long while.
The other important thing is to keep the big picture in mind. You need to get the project finished whether he does it or not - otherwise of course you may stand to lose a lot more money that what was being paid to this contractor. This is where 'thinking out of the box' comes into it. If his company is in the death throes of insolvency and cannot pay staff etc - if you can have your cash back, what about the equipment that is on site at the moment (even if you only need it the next few weeks, then you sell it off), and perhaps you could even get a new contractor in and use his subbies - if he cant pay them they will be glad of the work and he will be glad there are a lot less fists knocking of his door for money.
Again, solicitors are there for taking the legal route, managers are there to 'solve' the problem. Think of the big picture, what you stand to gain/lose over the whole project may be a lot more that the figures you may lose to this guy.
james s said:
We have been involved in a large bulding project for about a year. The building firm has been looking increasingly shakey and recenty pulled out of the contact half-finished and laid their men off.
It has since come to light that several elements of the work have not been done correclty and have filed building contorl. The long and short of it is that is that we believe they have around 20k of our money which they shouldn't
I am taking advice from a solisitor later in the week, though my fear with litigation is that they owe everyone money and will just fold.
Does anyone have any suggestions for holding them to account.
It sound as though they are very weak financially. If you are as forceful as would want to be (and by rights!) then they may just fold. It is unsavoury but you might need to offer them more money to complete the works. If they fold then it will cost you more to employ somebody else in the long run. It has since come to light that several elements of the work have not been done correclty and have filed building contorl. The long and short of it is that is that we believe they have around 20k of our money which they shouldn't
I am taking advice from a solisitor later in the week, though my fear with litigation is that they owe everyone money and will just fold.
Does anyone have any suggestions for holding them to account.
What form of contract were you using? Have you employed a QS or other Agent? If they have over certified the valuations to the builder then you could have a claim against them.
Whats the scale of the project (£ wise) & why have they got 20k of your money ? Surely someone was approving applications at your end.
The main thing, as other have said, is to keep the build going otherwise it will cost you a LOT more. Whats the L.A.D's on the project ? What payment terms is the builder working under ? What retentions are being withheld on every application(5%).
If he's doing a good job & is he honestly interested in finishing the work then how about suggesting he gives personal security to complete the works & in return you'll be 'helpful' when & where required. This way at least you'll know his intentions (or have more of an idea).
The main thing, as other have said, is to keep the build going otherwise it will cost you a LOT more. Whats the L.A.D's on the project ? What payment terms is the builder working under ? What retentions are being withheld on every application(5%).
If he's doing a good job & is he honestly interested in finishing the work then how about suggesting he gives personal security to complete the works & in return you'll be 'helpful' when & where required. This way at least you'll know his intentions (or have more of an idea).
Davel said:
Have you any stuff that you can recover?
Take advice today on whether you can call in a bailiff.
Damage limitation sounds about right sadly!
Take advice today on whether you can call in a bailiff.
Damage limitation sounds about right sadly!
Bailiff? for what exactly? If they have left stuff on site simply seize it. If your talking about sending in the bailiffs to seize stuff from there yard forget it, without a warrant of execution
1. We assume they are a LTD company, if not, you have several avenues open to you.
2. If they are LTD, it sounds like they may have been trading while insolvent, which is a criminal act and you can have them for it.
If you need any advice contact me. www.debtrecovery.tv
Sorry, wearing my Landlord's hat for a moment.
We rent out warehouses and called in the bailiffs when one customer was stalling on payment and about to go under.
We were lucky that the bailiffs managed to seize cars, lorries and office contents to more than cover the debt and their costs.
The bailiffs beat the receiver by just a couple of days!
Not appropriate in this case so just ignore me.
Good luck anyway!
Just a thought, if they have been trading whilst insolvent, how do you prove it without incurring significants costs and how will that get you back your money if it isn't there?
I'm interested because I had a problem with a guy in Perth who did just that and I lost about £7.5k in the end.
Sorry don't mean to hijack the thread but it might be a similar situation.
We rent out warehouses and called in the bailiffs when one customer was stalling on payment and about to go under.
We were lucky that the bailiffs managed to seize cars, lorries and office contents to more than cover the debt and their costs.
The bailiffs beat the receiver by just a couple of days!
Not appropriate in this case so just ignore me.
Good luck anyway!
Just a thought, if they have been trading whilst insolvent, how do you prove it without incurring significants costs and how will that get you back your money if it isn't there?
I'm interested because I had a problem with a guy in Perth who did just that and I lost about £7.5k in the end.
Sorry don't mean to hijack the thread but it might be a similar situation.
Edited by Davel on Thursday 25th January 16:09
Bailiff action for rent arrears is common, although its more about re-possession of a property (still need a possession order) any goods on site at the time of re-possession can be seized under that order in the case of rental arrears and / or to cover the lanlords costs.
Glad you beat the receiver anyway.
Glad you beat the receiver anyway.
Edited by jamesuk28 on Thursday 25th January 16:08
Just a thought but is it worth talking to the main client or their agent directly?
They may be witholding funds from your client and so you might be able to salvage something from this by dealing directly with them if you can.
After all, they'll be pretty keen to get the building usable as quickly as possible.
They may be witholding funds from your client and so you might be able to salvage something from this by dealing directly with them if you can.
After all, they'll be pretty keen to get the building usable as quickly as possible.
Was the builder NHBC registered? if so, go to the NHBC and have the defected work put right.
They are legally obliged to do this.....
If not and the Building Company was a Ltd one and has now gone bust, then the chances of getting anything out of them is very slim. Banks, VAT & Tax man will be first in the Pecking order.
Ive been Developing my own Properties for 11 years now and have seen lots of this type of thing going on.
If your profit Margin is a good one then put this down to experiance and hope in the time your build has been completed by proffesional builders the property has increased in value to substitute your losses.
They are legally obliged to do this.....
If not and the Building Company was a Ltd one and has now gone bust, then the chances of getting anything out of them is very slim. Banks, VAT & Tax man will be first in the Pecking order.
Ive been Developing my own Properties for 11 years now and have seen lots of this type of thing going on.
If your profit Margin is a good one then put this down to experiance and hope in the time your build has been completed by proffesional builders the property has increased in value to substitute your losses.
QUOTE (If his company is in the death throes of insolvency and cannot pay staff etc - if you can have your cash back, what about the equipment that is on site at the moment (even if you only need it the next few weeks, then you sell it off)UN QUOTE.
I am almost certain you will find that the bulk of his Plant (bigger than a mixer) will be on finance, or hired in, if that is the case it is then theft, as we have just found out to our cost!(long story) the same applies to any of the building materials on site, you can very easily find the Police at your door. One thing is confusing me though, if this is a large scale project the monthly valuations must surely exceed 20K. I am at a loss as to why in the situation you are in, you are not holding more than 20k in either valuations or retentions.
A few more details about your project would be helpful to all contributing to this thread. ie Why did Building Control/ NHBC/ Consultants or your own management not pick up on these faults, what are you building? how many other contractors are involved?
I am almost certain you will find that the bulk of his Plant (bigger than a mixer) will be on finance, or hired in, if that is the case it is then theft, as we have just found out to our cost!(long story) the same applies to any of the building materials on site, you can very easily find the Police at your door. One thing is confusing me though, if this is a large scale project the monthly valuations must surely exceed 20K. I am at a loss as to why in the situation you are in, you are not holding more than 20k in either valuations or retentions.
A few more details about your project would be helpful to all contributing to this thread. ie Why did Building Control/ NHBC/ Consultants or your own management not pick up on these faults, what are you building? how many other contractors are involved?
Edited by roger482 on Friday 26th January 21:40
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