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I will try and keep this as brief as possible:
After a successful refurb, my builder with whom I have always had a good relationship with, (think small rural self employed builder, limited numeracy & literacy skills, employing a couple of subcontractors) presents me with a considerable bill (circa £17k) for 'extras' right at the end of the job. Approx £5k of these were agreed additional works which I fully expect to pay for but other items include random stuff such as 'additional electrics £2K' that were not requested, never agreed and frankly I have no idea what they are for. To me it is pretty obvious they are an attempt to recoup money for a job he likely underquoted for and realised close to the end he was going to lose money on.
There were also works which the builder did not complete that were included in the original quote so I asked for a reduction in what was being asked. He has massively played down the amount they would have cost to keep the final figure owed to him as high as possible. All payments to him from me throughout the job were paid as agreed on the date he asked.
With repeated requests I gave him more than 10 weeks to get the list of snagging completed but he refused to come back on site to do this until he was paid for his invoice for 'extras' in full.
In the end I gave up trying to negotiate, as despite numerous attempts he refused to discuss/meet up and try and resolve the issues and wouldn't take my calls. I also made him a midway offer to resolve the dispute (more than I believe I owed him) but he point blank refused to accept anything less than the full amount.
Eventually I had the locks changed (as he wouldn't return the keys) and I am now in the process of putting all the snagging issues (and some other bigger issues I have found since) right with other tradesmen and getting the site cleared of all the rubbish & debris that has been left behind.
I have now received a solicitors letter which basically says pay up or else and with a veiled threat that if I don't comply within 7 days then there are lots more 'additional costs' for work he claims to have done and didn't charge for, which will be added to the amount they say I owe him.
(Note: I have had this happen before many years ago on an extension on my own home prior to investing in property where a builder admitted he underquoted to get the job, then asked for a large sum at the end for stuff that was never agreed. This resulted in a very long, painful and expensive legal wrangle in which the only winners were the lawyers).
I am keen to avoid this scenario again and I am happy to pay for what was agreed work but need to deduct the costs of the snagging when it is completed by the tradesmen. However, I need to reply to and appease the lawyers within 7 days or I am apparently being taken to court.
I don't expect this is a unique or uncommon scenario but as I have now been stung twice any advice to help me to:
a) resolve this situation and b) prevent it happening again would be appreciated.
Thanks in advance
I've had it too. Let him take you to court and prove his case. He will have to produce evidence etc ect. Put the onus on him. Don't employ a solicitor either. Just reply to his solicitor's correspondence as best you can. Perhaps make the solicitor the settlement offer, you made previously, in writing. The court will take a dim view if he refuses. Good luck. I don't envy you.
Agree with TOZ4 - don't use solicitors they are often terrible. An intelligent layman is usually far more competent.
I believe that he will have to pay 10% up front in court fees just to initiate the case, ie £1,700 with the new changes. You should also use a Part 36 offer at an early stage to "put the monkey on his back", ie he will be liable for all your costs if the court awards less (or I think only slightly more) than your Part 36 offer. So perhaps make a Part 36 of say £6k as you recognise that you owe him £5k (which he may be able to make a case of saying it should be a tad more) and then it will be almost impossible for him to win by going to court and you might have paid a grand more than you feel that needed just to make it go away (immoral and weak but probably worthwhile if you are not the sort of person who enjoys a fight).
Without a reasonable Part 36 if the court awards him £1k and he has spent £20k in legals he will probably get about £15k back in legals. The earlier the Part 36 the better as he is entitled to his legal costs before the Part 36 but not after.
If he then goes to solicitors you can do just do the minimum knowing that his solicitor is egging him on with false information (I have seen this many times) but the solicitor will back off before going to court.
I'm a Chartered Quantity Surveyor, I work for several small builders on their quotations and agreeing accounts.
It's a shame you are having problems with someone you have worked for before.
Hopefully you will have a contract that was agreed before he started, but if not The Construction Act applies. The Construction Act gives protection for small companies when not paid.
Firstly, make sure than whenever you are issued with an interim payment notice or invoice that you don't agree with, inform them by writing that you intend to pay them less, a "pay less notice". Without this notice, under the Construction Act, after a certain time has elapsed (generally noted in the contract), he can go straight to court and will be granted the entire sum requested, in full, even if you have evidence to suggest it is incorrect. It is the timing that matters. If you fail to pay, he can take you to litigation. There are companies out there already who do this at no cost to the contractor.
Under the Construction Act, you are allowed to consider the application for the final account for up to 6 months to decide the last payment. Hence, most contractors never issue a "final account" until the sum has been agreed.
What I would suggest is that you send a payless notice immediately to the builder, and his solicitor. Then ask for a full build up for prices for all the extra items. Remind him that you can claim any additional costs you paid out to other contractors to complete his snagging back from the account.
Didnt know any of that. Great stuff!
Didn't realise this about the Construction Act. Thank you. Been looking at https://www.boodlehatfield.com/the-firm/articles/are-you-aware-of-the-danger-of-failing-to-issue-a-payless-notice/ It looks like one only has 5 days to serve a Payless Notice - what happens if one is on holiday!!!
It is a bit similar to serving a Statutory Demand but here is automatic. Presumably this is like serving a Statutory Demand.
Also Alang you should watch out for the palintiff's solicitor putting a UN1 on the title deed. They don't have to tell you that they are / have done this. Once it is on it is more or less impossible to remove, get a loan on the property or sell. Fortunately most solicitors are too dumb to do this.
Sorry to hear this. I feel your pain as I've been there before. I know this is of no use to you now but maybe helpful for the next time... Because of this scenario I always have a clause in my contract to the effect that any extras are paid for on the day they are completed on a time & materials basis (agreed at the start). The builder is often keen to let it slide but I always insist and make sure I pay on the day. This is because if it's left to the end, it's always difficult to prove one way or the other what work was done and how long it took etc. If there is any dispute it's much easier to argue about what went on earlier that day rather than what went on several months ago. In this scenario you are always up-to-date with extras and there are no nasty surprises at the end.
Good luck with your dispute - I hope you get it sorted.
Let him take you to court if he wants. He wont get a penny as you didn't agree to the 'extra works' that hes done. Hes really as simple as that. Hes just trying it on
I am based in China and the U.K. I have contacts with people in China who want to invest in U.K. property. PM me if you want to work together.
I'm always keen to understand why things like this occur.
I cant answer any of the legal aspects. But second question was how to avoid in future.
Has the builder got into personal money worries/debts. The lack of numeracy and other characteristics spells recipe for disaster . So for future mitigation.
Take a hard look at yourself ( are you cutting costs, being cheap)?
I'm not trying to kick you when you down , just realised some of my mistakes were self inflicted in the past.
A phrase I like to keep in mind and get past mistakes. ( Even when I feel they are not mine)
When you point a finger at someone else , realise there are actually 3 fingers pointing back at you.
Evaluate characteristics of those you contract.? Fit for purpose
You have stated numeracy / literacy below par. So was inevitable? The clues were there..
Let's hope the rural builder sees sense and agrees to settlement. Try some further dimplocacy before costs escalate. ( Consider middleman you both respect if cant stand the guy) besides money there is your time and stress to consider.
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Thanks you all for your very helpful and knowledgeable comments, it is great to think that help is out there and your insights have helped to give me some clarity.
Question: if payless notices weren't mentioned in the contract, is there much point me serving him with one now? It is approx 5 months since he asked for the money for the extras?
On the advice given I will inform his solicitors of the offer I have already made, state my right to recover fees paid to other contractors for the snagging he refused to complete and do not intend to use a solicitor myself at this point.
If there are any other things you think I should be doing at this stage then please let me know.
Point taken about having clauses in the contract and taking some of the responsibility myself, you live and learn (the hard way sometimes).
Consider reading this. Might help formulate summary reasons why builders has failed in his contract with you.