Resolving disputes with builders
The UK home improvement market is reported to be worth in excess of £14 billion each year. In light of the costs associated with buying a larger property, it is not surprising that refurbishing or expanding your own home is seen as an attractive alternative. But before you instruct a builder make sure you both know exactly what is expected to avoid costly disputes.
David Morgan suggests some tips on avoiding disputes and offers advice to those already in difficulties.
Don’t rush in
The most important thing you can do to avoid a dispute is to plan the work carefully. Regardless of the size of the project, it is vital both parties should clearly understand the work that is required and the price being paid for that work. This should be recorded in a contract. Any changes to the scope of the work should also be agreed and the price documented.
Whilst this may sound obvious, one of the major reasons for breakdowns between clients and builders is their having a different understanding of the job being done.
Communicate with each other
Throughout the project, check progress regularly, keep a dialogue going and raise any issues as soon as they arise. If an agreement is reached over a particular issue (this may include an agreement to make an extra payment), record this in writing.
Agreeing to pay money at certain agreed stages can act as a useful reminder – giving both parties the chance to review work undertaken and approve this before moving on to the next stage.
On completion, refer back to the contract and make sure you are happy with the work, that the area has been cleared up and that you have received all relevant certificates. Draw up a list of any snagging issues and, once they have been attended to, make the final payment.
As well as any rights under the terms of the contract, under the Consumer Rights Act 2015 (“the Act”), which came into force on 1 October 2015, every contract to supply a service will include a term that the trader must perform the service with reasonable skill and care.
If the builder fails to do what was agreed, for example by using the wrong specification of materials or the work is not of satisfactory quality, then they are in breach of contract and there are a range of options available to you under the Act or otherwise. These include the right to require the trader to perform the service again and the right to a price reduction. Do not pay for any disputed work as you may be deemed to have accepted it.
If the builder fails to address the problem by a deadline set by you then you may be entitled to instruct a third party to do the work and claim the cost from your original builder, depending on how much you have already paid. Before doing so you should obtain quotes from other builders and let your contracted builder see how much you will be claiming if they do not put the problem right. If a defect with the work crops up after completion, check whether the work is covered by a guarantee.
If the builder leaves site before finishing the job they have failed to complete their side of the bargain and will be in breach of contract. There may be a dispute as to how much is payable for the partially completed work. If you have been making staged payments this will be easier to ascertain. If you paid the builder in advance of work then you will be entitled to a refund. If the builder is insolvent then you may have some difficulty getting the money back. This is where an insurance-backed guarantee will be useful if you obtained one at the outset.
If the time for performance is not fixed by the contract then, under the Act, the trader must perform it within a reasonable time. If they fail to complete the works on time or they take longer than is reasonable, you may have a claim against the builder for financial losses suffered as a result of the delay.
At the end of the project a builder may demand more money than previously agreed. This is why it is preferable to have a written agreement in place which you can refer back to setting out what price was agreed and what for. Any price variations for extra work or amended work should have been agreed in writing before the work was done. In the absence of such an agreement but you were aware of the changes then a reasonable price will need to be negotiated.
If the builder does not put right any problems, consider contacting their trade association or seeking legal advice. A solicitor’s letter to the builder and the threat of legal proceedings should encourage them to take the matter more seriously.
Before getting any remedial work done by an alternative contractor, collect evidence of the problem such as photographs or an expert report. These will assist if court proceedings are necessary to recover any losses you have suffered as a result of the builder’s breaches of contract.
If legal proceedings are necessary, get legal advice before issuing a claim to discuss whether you have a good case and to ensure that you put your best case forward. It is also worth considering whether the builder has sufficient assets to make them worth pursuing.