13th Oct 2017
It has recently been reported in the EDP that Alan Blanchflower, a local builder, has been leaving Norfolk families tens of thousands of pounds out of pocket after taking payments for construction projects which he has then failed to complete.
Sadly, this is becoming an all too common problem for home owners and subcontractors alike. So, what can be done to help avoid falling into a similar trap? Here are some practical tips suggested by our Dispute Resolution team:
- Make sure that you agree in writing with your chosen builder before the start of the project the exact works to be completed and at what cost.
- Be clear as to whom you are contracting with, an individual or limited company for example.
- Agree who is going to be responsible for acquiring the materials, and how they shall be paid for (direct to the supplier by the homeowner, or by the builder then invoiced to the homeowner?)
- Agree and document a clear timetable for the works to be carried out to help you monitor whether things are going to plan or are beginning to go wrong.
- Agree any extra works or variations to the project in writing.
- Make sure that your agreement is clear as to payment terms, and avoid being persuaded to pay for the full cost of the project “up-front”. Staged payments help to control how much you are spending and when, and give you the option of stopping payments if your builder abandons the project part-way through.
- Set out in your agreement what the parties’ termination rights are, e.g. notice period and circumstances that entitle either party to terminate the agreement.
- Be clear as to when the final payment for the project becomes due, e.g. is an architect/surveyor to certify the works as being complete?
- It would be prudent to try to obtain references on your prospective builder, and have credit reference checks carried out. If they have a poor credit rating or have been insolvent, alarm bells should be ringing.
The above tips apply equally to builders and having a written agreement will assist in the event of a customer defaulting on payments.
But what can be done if you are a victim, with works uncompleted despite paying the builder?
The Individual Insolvency Register can be searched for free online and will tell you whether a person is subject to a bankruptcy order, debt relief order or individual voluntary arrangement. It will not however tell you if an application for any of these has been made. If you find that your builder is already bankrupt you will need to “prove” in the bankruptcy for the amount owing to you. Often a bankrupt will have insufficient assets to cover all of their debts, meaning that you are very unlikely to recover all that you are owed.
Assuming that your search comes back clear, your next step would be to issue a letter before action to your builder warning him that you will issue court proceedings if they do not pay you within a set period of time (usually 7 days). If you still get no joy, you can issue court proceedings in order to obtain a County Court Judgment, which you can then enforce. The method of enforcement will depend on many circumstances, including the amount you are owed and the assets of the person who owes you the money.
The Dispute Resolution team at Rogers & Norton has a wealth of experience in dealing with debt recovery matters from the initial letter to your debtor, through to obtaining a judgment and enforcing it. We have enjoyed many years of success in recovering money rightfully owed to our clients and may be able to tailor fee structures to suit your individual needs. We are also experienced in building and construction claims and disputes.