Our Dispute Resolution Department have been involved in many building related disputes.
Like any significant project, building works are not always straightforward and with more and more people extending their home. The project is also likely to be expensive, with costs ranging from £10,000 for a simple extension to over £100,000 for a significant building project. Whilst you may have spent significant time and money designing your dream building and getting the right builders, have you considered what would happen if something went wrong? Who would you turn to? What outcome would you expect? It is not possible to avoid problems entirely, but there are certain things you can do to minimise the chances of things going wrong or to mitigate the difficulties that occur when they do. Here are my five top tips to avoid building disputes:
Do Get A Contract in Writing.
The importance of getting a contract in writing cannot be overstated. Building works are notorious for changing as they progress, but there is nothing to prevent you getting a price estimate and time estimate in writing before any work starts. If your builder gives you a verbal time or cost estimate, then get his email address and confirm his estimate to him in writing. Your email could begin with: “Further to our conversation earlier today, I am writing to confirm what you said …” It is also essential to repeat this process to confirm any changes. A common cause of building disputes is about changes to the contract. Recording changes in writing will significantly reduce the chance of this occurring.
Fixed price and time contracts are good.
In an ideal world, you will agree a fixed price for the whole job. If this is not possible because the extent of the work cannot be determined in advance, then ask what rates you will be charged for work. You can also reduce disputes over the timing of the work by agreeing start and end dates in your contract. As key contractual terms, all these agreements should be confirmed in writing. The law requires your builder to provide his services for a reasonable price and within a reasonable amount of time. However, the courts have very wide discretion about what is “reasonable”. The clearer the written terms, the less likely there will be a dispute about what it all means. It is also vital to make it clear if there is a fixed deadline. For example, if you need the building work finished to host the family Christmas you must make it clear to the builder at the outset that time is of the essence to be finished in good time for Christmas. If you do not specifically make time of the essence and explain why, then the law assumes it is not vital and you fall back once again on “reasonable time”.
Pay a proportion of the work in arrears.
Ideally, you do not want to pay anything up front. However, for anything but the smallest jobs, it is likely that the builder will want some payment as the job progresses and this is usually quite reasonable. Also, the builder may need you to pay for materials in advance, especially when they are particularly expensive. Ultimately, this is a matter for negotiation between you and your builder, but there is no specific legal model and therefore do not allow your builder to persuade you that “this is the way everyone does it” because everyone does it differently!
Research the builder and find out about their reputation from past clients.
Selecting a good builder is vital. The law requires that all building work must be carried out with reasonable care and skill, with materials of satisfactory quality that are fit for purpose. However, this is also subject to the interpretation of the Court. Knowing your builder’s reputation in advance is therefore important. Personal recommendations, internet searches, company searches, references from previous customers, recommendations and endorsements from trade bodies are just some of the ways to get further information regarding your potential choice of builder. Ideally, you should visit some of the builders’ previous jobs. Most reputable builders will be more than happy to show off their previous work and while you are there you can ask their previous customer for a personal reference. Researching a limited company on Companies House can also be a useful source of information. If a builder’s previous work cannot be varied, and you cannot find any information about them independent, you should discuss this with them before agreeing a contract. If their answer is anything less than satisfactory, you should consider whether to proceed with them.
Insurance – check which insurances the builder has. Ideally they have these three.
Check whether the builder has insurance. Most builders will have public liability insurance, but do they have Employer’s liability insurance or Contractors’ all-risk cover? Ideally, your builder should have all three. A brief description of each type of insurance is as follows:
- Public liability insurance: this covers injury to a third party (for example, a passing pedestrian being hit by a falling slate) and damage to third party property (such as the kitchen unit installer ripping the lino)
- Employer’s liability insurance: a legal requirement for limited companies; it covers the employee who breaks a leg when the company’s ladder collapses; plenty of sole traders forgo this cover, which could involve the homeowner in litigation.
- Contractors’ all-risk cover: a third of builders do not bother with this, which could land the homeowner with huge bills. It covers work carried out by the builder, such as an extension, accidentally destroyed before completion or before the homeowner extends his policy to cover it.
You may also wish to consider Site Insurance or Contracts Works Insurance, which can be taken out yourself or jointly with your builder, particularly if your builder does not have Contractors all-risk cover.
Ensure good communication and get regular updates.
Make sure you have got more than one way to reach your builder – preferably by phone, email and fixed address. Ensure that you communicate with your builder throughout the project and discuss issues that arise. Regularly being updated on the build will help you feel in control and will allow you to ask any questions or raise any concerns you may have. Equally, your builder will be able to raise any concerns they have and if additional time or money is required due to changes in the building works then this can be discussed as it arises. Problems often multiply when they are not talked over and lack of communication can lead to distrust and a breakdown in the relationship.
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If you need a fixed fee consultation, either for us to look at a proposed contract or to help you with a dispute, please get in touch. The hour long consultation can be reserved for just £95.
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Chris Miller works alongside Justin Sadler in the Litigation Department on a wide range of civil litigation matters including Debt Collection and possession claims, as well as assisting with contentious probate matters.