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  • Refurbish/Develop

    Help! I Need to Select a Builder for Major Refurb Work!

    I have now received 3 quotes for the refurb works and they're all roughly the same price. The builder I would like to commission has quoted £16,472 for the works. However, he has asked for £6,472 before he starts; week 2 payment of £2,500, week 3 payment of £3,500 and £4,000 on completion. Would you agree to this payment schedule? Is this reasonable? He has given me one reference to call but I will ask for a couple more. I found him on http://www.ratedpeople.co.uk but he has no website so how do I know he's genuine?
    I am concerned about paying this sort of money into the builder's personal account so any additional advice you can offer would be greatly appreciated. This is totally new to me so I'm trying not to make any costly mistakes. The works will take 6-8 weeks to complete.
    Could you please give some guidance as to what specificially should be stated in the contract.
    Crystal
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    Rich,
    Assume the builder has an account at the merchant so they can get materials without cash from the client.
    Assume further that the client runs into a problem and does not pay as agreed. The builder seems to be caught in the middle with the very real possibility that the merchant will shut the builder off.
    I would expect the client to pay something upfront for materials to start a project. Otherwise the builder is almost acting as a banker for the client with the builder lacking the skills to do a credit check.
    John Corey
    Follow me on Twitter -> https://www.twitter.com/john_corey
    https://www.ChelseaPrivateEquity.com/blog
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    John Corey 


    I host the London Real Estate Meet on the 2nd Tuesday of every month since 2005. If you have never been before, email me for the 'new visitor' link.

    PropertyFortress.com/Events

    Also happy to chat on the phone. Pay It Forward; my way of giving back through sharing. Click on the link: PropertyFortress.com/Ask-John to book a time. I will call you at the time you selected. Nothing to buy. Just be prepared with your questions so we can use the 20 minutes wisely.

    Asking for a deposit normally depends on the prior client/builder relationship and the job particulars.
    If the builder is just providing labour than he might not ask for an upfront payment, ditto if each party already knows and trusts each other. This could also be the case with larger jobs, when more liabilities fall on the builder, if there’s a prior relationship although I think this pushes fairness somewhat.
    On larger jobs I would always expect to receive an upfront fee for materials and to cover wages. Not taking a deposit when you have just ordered a £30000 kitchen or when you employ 10 men at £750 week each is unreasonable and a tad dangerous in my book, especially in the current climate.
    Best wishes
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    Hi Crystal
    I would suggest you use a Minor Works Building Contact from the Joint Contracts Tribunal. This is the standard document used in the building industry for minor works and any decent builder will be familiar with the terms. It only costs £12.95 plus VAT but it could be the best legal document you ever bought if a problem arose. You can buy one at most good stationers or online
    Payments are made 4 weeks in arrears based on certain milestones being achieved and if a dispute arises, there is a standard dispute resolution process which you can follow. I would also recommend that you get all the certificates needed for the job, such as Gas Safe, NIC/EIC, FENSA, building control etc. as you need these if you should ever sell the property.
    Adrian Standing
    https://www.juniperproperty.com
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    Hi Richard
    I haven't been on the site for several weeks but I appreciate the time you have taken to give your advice. Thank you.
    Crystal
    Richard Greenland said:
    John and Marcus, as I said in my post, many builders do like money up front and it generally works out Ok for everyone. Personally I don't and there are a few reasons for that. One is that it depends upon the kind of service you see yourself providing. You generally pay first in a cafe, but in a restaurant you pay after dining. Restaurants don't usually have a problem with this. Another is that I'm quite choosy about who I do work for. Another is that I like to start from a position of trust. Another that people rarely catch a cold right at the start of the job. If they are going to have cashflow problems it is generally at the end when the money starts to run out. Another is that I've been doing it this way for nearly 30 years and never had a problem! But, if I had a few blokes to pay on my own books I might feel differently. As it is I always use independent subcontractors, they get paid independently of me. This is good for the client as it keeps much of the work below the VAT threshold, altho I take overall responsibility if I am running the contracts. We might want some money at the end of the first week tho!Hi Adrian, it may well be a good idea for Crystal to use a Minor Works Building Contact but I disagree that any decent builder will necessarily be familiar with the terms. I for one have never been asked to sign one. (Maybe that's because I like to start from a position of trust - see above!)RichRich
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    Hi Richard
    I forgot to say that I chose this particular builder because his references were excellent but also when I spoke to him he said he had a passion for refurbing properties. It gives me confidence when a person has passion as opposed to them being in the business because that's what their father and grandfather did! So far things are going well.
    I had to make a decision because there was a delay in getting a reply to my post.
    Crystal
    Regards.
    Crystal
    Richard Greenland said:
    John and Marcus, as I said in my post, many builders do like money up front and it generally works out Ok for everyone. Personally I don't and there are a few reasons for that. One is that it depends upon the kind of service you see yourself providing. You generally pay first in a cafe, but in a restaurant you pay after dining. Restaurants don't usually have a problem with this. Another is that I'm quite choosy about who I do work for. Another is that I like to start from a position of trust. Another that people rarely catch a cold right at the start of the job. If they are going to have cashflow problems it is generally at the end when the money starts to run out. Another is that I've been doing it this way for nearly 30 years and never had a problem! But, if I had a few blokes to pay on my own books I might feel differently. As it is I always use independent subcontractors, they get paid independently of me. This is good for the client as it keeps much of the work below the VAT threshold, altho I take overall responsibility if I am running the contracts. We might want some money at the end of the first week tho!Hi Adrian, it may well be a good idea for Crystal to use a Minor Works Building Contact but I disagree that any decent builder will necessarily be familiar with the terms. I for one have never been asked to sign one. (Maybe that's because I like to start from a position of trust - see above!)RichRich
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    Hi Adrian
    Thank you for your advice. I did not know about the NIC/EIC, FENSA certificates so I will enquire about those.
    Thank you also to Marcus and John. All the information provided has been very helpful.
    Crystal
    Adrian Standing said:
    Hi CrystalI would suggest you use a Minor Works Building Contact from the Joint Contracts Tribunal. This is the standard document used in the building industry for minor works and any decent builder will be familiar with the terms. It only costs £12.95 plus VAT but it could be the best legal document you ever bought if a problem arose. You can buy one at most good stationers or onlinePayments are made 4 weeks in arrears based on certain milestones being achieved and if a dispute arises, there is a standard dispute resolution process which you can follow. I would also recommend that you get all the certificates needed for the job, such as Gas Safe, NIC/EIC, FENSA, building control etc. as you need these if you should ever sell the property.Adrian Standinghttps://www.juniperproperty.com
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