Consumer rights expert Martyn James explains everything you should have set up and in place before you hand over any money to builders or tradespeople
Home is where the heart is – which is why we spend so much money on doing up (and propping up) the places where we live.
Yet every year, I’m contacted by readers who have found themselves trapped in long, complicated and often hostile disputes with builders, tradespeople and other home design specialists. Builders get a bad rep. Many of the disputes I see arise because the homeowner has a vision in their head that they haven’t adequately explained – or their expectations are far too high.
Let’s be honest though; there are also a lot of cowboy builders out there. I’ve seen disastrously shoddy work, appalling corner-cutting, jobs that stretch out far beyond acceptable timescales and even threatening behaviour. In addition, there’s been a rise in the number of tradespeople who suddenly go out of business. So getting your money back when things go wrong is a vital factor to consider when commissioning a home redesign. Here’s my guide on how to avoid a builder breakdown.
Start with setting out a contract
Tempting as it is to launch straight in to a building project the moment you‘ve sketched out your vision, don’t even think about it until you’ve agreed a contract, written it up and all parties have signed it.
Here’s my checklist on what the contract should cover as a bare minimum . I put this together based on the complaints I hear about every year from readers. It’s not foolproof, but it’s also a useful checklist for you, so you know what questions to ask and what things you might want to consider. The contract should include:
- Precisely what the work will involve.
- Timescales for completion, including when payments are made.
- The plans and design.
- The final quote you’ve agreed.
- Working days and hours (in case the builder is working on multiple jobs at the same time).
- Materials, where they have been sourced from and if they are in stock.
- Clearing the site and removing waste on completion and through the process.
- Payments and how they will be made.
- Insurance details and information about the registration of the companies involved.
Payments
Can you think of any other business sector where you pay huge amounts of money cash in hand to a stranger? Astoundingly countless numbers of people still pay for building and trade work off the books. This is bonkers. Don’t even think about paying for building work in cash.
Any builder and contractor should accept debit or credit card payments. If they don’t, be suspicious. How you pay directly affects your rights if there’s a dispute or the business goes bust. Starting with the best method, pay by credit card if you can, even if you are only paying a deposit.
I often mention it in this column, but just to reiterate, if the goods or services aren’t provided, the contract is not met or the business goes bust, you could get the whole amount back from the credit card provider under the Consumer Rights Act. There is an upper limit of £30,000 though. Check out my guide to this in the Mirror.
Plastic makes perfect, because if you pay by either debit or credit card and the goods or services aren’t provided, then you can ask the card provider to ‘charge back’ the money from the business. You’ll need to provide proof of the problem when making a chargeback claim and card providers won’t get involved in disputes over quality of work.
E-payment services like PayPal have buyer/seller dispute schemes of variable quality but you can go to the Financial Ombudsman Service (FOS) if they don’t uphold your complaint. Watch out for PayPal’s ‘friends and family’ option which is only for paying people you know personally – not businesses. That’s because it’s a bank transfer – which you can’t recall when it’s gone. Any other method of payment, like cheques, bank transfers or cash can’t usually be recalled once paid or cleared.
When to pay
For big jobs, you might want to agree to pay in instalments at the completion of each stage of the work. This is because paying upfront leaves you at a disadvantage if you are unhappy with how things are going. Make sure this is all set out in the contract.
The same goes for materials. You might want to see if you can pay direct for the materials used in the build. This serves two purposes. Firstly, you can deal with the manufacturer direct if there’s a problem. Secondly, you can check to see if the items are in stock. Many a building project has been waylaid by a lack of materials.
Check out the contractor
Do a bit of research in to the builder or contractor before committing. Most businesses have reviews online, but local forums and review websites can give you a bit more information too. Ignore people with obvious grudges who sadly abound online.
Check Companies House to see if the contractor is a registered business. This is not guarantee of good service. However, you can find out how long the business has been operating, if it’s paying tax and where the owners are registered. This is important if you need to take legal action.
There are loads of specialist trade and membership bodies out there covering builders and tradespeople. Again, while not a guarantee of quality, they will confirm that the business has committed to certain standards and practices. Many of these organisations have mediation schemes which can step in to try to work out a resolution if a complaint arises.
Don’t forget insurance!
Insurance is vital with building work. Not just your policy, but that of the contractors too. It’s a legal requirement for tradespeople and anyone who contracts them to have employer’s liability insurance. This covers the workers if they get hurt on the job. Without it you could find yourself having to pay out in the event of a claim.
I’d suggest asking about public liability insurance too. Any contractor with their salt will have this. This type of insurance covers things like property damage, including neighbouring properties, and legal liability for the damage or injury to workers and you too. You can buy this yourself if necessary.
You can also take out ‘all risk cover’ which covers the many things that aren’t covered by legal liability insurance. This includes damage as a result of accidents, storms, floods and explosions, loss of materials and other unforeseen circumstances.
Make sure you let your insurer know about the work you’ve commissioned. This can help identify potential problems with the building work you want to undertake. There may be an increase in premiums to cover potential problems like damage to the structure of the building. But it’s better than being left without cover.
And finally…
Dream big, by all means, but don’t expect builders and contractors to be mind readers. You might feel like you’re going on with yourself a bit when arranging building work, but trust me, it’s worth going in to every last detail to avoid a disaster!
- Martyn James is a leading consumer rights campaigner, TV and radio broadcaster and journalist
