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Hi, does anyone know if you can claim from a builder for a delay in his completing his work? We had some work that was meant to take 5 weeks but ended up taking 16 just as the builder just didn't turn up when he said he would with a variety of excuses. He's also charged VAT when not VAT registered and not done the work he quoted for. Can't remember why, but I seem to recall you can only claim 5% of lost income & costs (utilities, council tax etc); anyone have any ideas?
Chartered Accountant, Tax Advisor and Mortgage broker
(and BTL portfolio owner)
I think its usually an implied term that the works were proceed with due haste/ diligence etc etc in which case if you can demonstrate that you are loosing rent etc and the builder knew what your purposes were then damages may be claimable.
What you are referring to are indirect losses not direct losses. Utilities and council tax would be incurred anyway it is just that he has presumably another home so is paying twice. It is the other home which is the cost and that's an indirect loss.
I believe you can only get compensation for direct losses unless contractualised and even then these losses must be minimised.
The below article is useful.
There are three options:
1) Go to court and say that the contractor is liable. Expensive even through the fast track construction dispute process and there will be counter reasons and claims coming out. The claimant would need to prove a breach of contract by the contractor to obtain these damages. And I don't think it would extend to indirect losses unless the contract provided for this.
2) Rely on the contract which says what would happen on a contractor caused delay. This needs to be a genuine pre-estimate of loss. This is just a contractual matter but could include indirect losses.
3) Negotiate with the contractor (the threat of VAT reporting may be enough to get him to see sense (but I doubt it)).
it is with trepidation that I (slightly!) disagree with you, but not even you can know everything!
you state: 'However if the builder has no obligation to finish by a set date I think it will hard to impossible to secure any costs from him.' but the poster states:
'We had some work that was meant to take 5 weeks' so seems there was some sort of end date and this doesnt have to be in writing to be binding.
loss of rent could very well be a direct loss. and it wasnt me who referred to utilities or council tax.
I dont think that there is a distinction between direct and indirect costs. this isnt borne out by your link as far as I can see. what matters is that costs were foreseeable and result directly from the breach (and obviously reasonable and wouldnt have been incurred anyway).
you have mention LAD (liquidated and ascertained damages), but of course if there is no written contract then this isnt relevant. However you havent specifically mentioned unliquidated damages for which no written contract is required, i.e. this is implied as I suggested in my earlier post: