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Harris
Harris, Law Specialist
Category: Law
Satisfied Customers: 2725
Experience:  Family Law - Specialist in Divorce, Financial Relief and Children Matters
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We have an issue with a house build project - our builder

Customer Question

Hello - we have an issue with a house build project - our builder provided us with an estimate and a timeline, both of which have now been exceeded. The initial indicated timeline was 12-14 weeks - we are now at week 27 with no finish date. There had been much sub quality work with 3 walls having to be rebuilt as it wasn't straight and some woodwork having to be redone. The costs are a little complicated - he gave us a very detailed written quote but encouraged us to enter into a 'cost plus' exercise with him on the basis that he thought this would be cheaper for us. We have raised our concerns about escalating costs in relation to the extended timeline and received a written list of variations orders on top of the initial quotation that he thought we had incurred a few weeks ago. However, when we challenged him again on costs last week he indicated that costs had escalated and had now requested another £18k to complete the job. This would mean that his costs are almost £30k above his quote and almost £20k above where he indicated where we would finish in November. What can we do.
Submitted: 1 year ago.
Category: Law
Expert:  Harris replied 1 year ago.
Hi, thanks for your question. I am a qualified solicitor.
Was it an "estimate" he provided or an actual quote for the work? If it was an estimate, then the builder cannot be bound by this.
If further costs were to be incurred then the builder should have raised this with you and given you the option as to whether you wished to proceed with it or not. You are obviously not obligated to agree to further work that the builder proposes and should not be liable for costs that you did not agree to.
If the sub-quality work was carried out by the builder, then the rebuilding to correct this should not form part of the costs as it would have been the builder's error.
Please let me know if you have any further questions regarding this.
Harris and other Law Specialists are ready to help you
Customer: replied 1 year ago.
It was a formal quote provided through a formal tender exercise. However, the builder suggested we proceed on a 'cost plus' as he was confident it would end up being cheaper for us. It was a very detailed quote and we also received other quotes for the same work - which he had now exceeded both in terms of cost and time.
Expert:  Harris replied 1 year ago.
What exactly were the terms of the costs-plus? Was it as a percentage or fixed fee?
As it was a detailed quote, you can hold the builder to the original quote, unless you had explicitly agreed to the further work that had to be undertaken.
Customer: replied 1 year ago.
The terms of the cost plus were costs plus 21% (overheads and profit). We have several times asked him for an update on costs and that was when he provided us with a list of variations above the fixed quote he originally provided. This was just 4 weeks ago and at that stage he did not indicate any costs above this to complete the original job as he had now, He also encouraged us to employ sub-contractors directly ourselves to reduce costs (although this had actually not had an impact).
Expert:  Harris replied 1 year ago.
What are the reasons for the increase to the costs and variations - it seems very excessive. Also, have you agreed to what he has suggested and the new costs?
Customer: replied 1 year ago.
We have not agreed to anything above the work done to date (there were some minor variations to date which were requested by the building inspector). However the additional costs he has sent us this morning are to complete the job and are all included in his original quote. At this stage, we have not agreed to pay this additional money as we believe he should complete the job within his original terms. Is this correct? He has not given us a reason for the costs - other than that they have exceeded his original quote and timeline.
Expert:  Harris replied 1 year ago.
Yes, I agree that you should not be accepting his new quote if all the work is included in his original quote, so long as it was a a fixed quote (plus costs-plus agreement).
He will have to give you specific reasons for the costs and you need to be satisfied that these are necessary and outside the original quote agreed on, otherwise he will be bound by the original quote.
Customer: replied 1 year ago.
That is really helpful - thank you.
Expert:  Harris replied 1 year ago.
No worries, and good luck. Please do come back if you have any further questions or if things change. You can ask me directly here: http://www.justanswer.co.uk/law/expert-london-solicitor
Customer: replied 1 year ago.
Am trying to contact you with regard to further advice following our discussion last night. Is that possible?
Expert:  Harris replied 1 year ago.
Of course - If it is to expand on my previous response then you can do it on this page.
if it is a new question please ask it here: http://www.justanswer.co.uk/law/expert-london-solicitor/
Customer: replied 1 year ago.
Thanks. It is for advice regarding what next steps I should take.
Expert:  Harris replied 1 year ago.
As the work started prior to 1 October 2015, he is bound by the Supply of Goods & Services Act 1982 (As amended). The builder needs to provide you with detailed reasons for the increase to the costs. If they are not able to do this or if the reasons are unsatisfactory then they are bound by the original agreement and quote given to you.
You should demand that they keep to the original quote if there is no necessary work outside the quote and put this in writing.
If the builder still does not agree, request confirmation if he is part of a trade union, or check the paperwork you have - also check if he is part of an Alternative Dispute Resolution scheme, who will assist to mediate in the matter. If he is not you can make a referral to one yourself: http://www.tradingstandards.uk/advice/ADRApprovedBodies.cfm
If none of this works, then you will need to proceed with an application to Court.
Customer: replied 1 year ago.
Super, thanks.Are we within our rights to employ another contractor to finish the work or do we need to give this builder the opportunity to respond about costs first? Our preferred position would be to pay him his quote for work done to date, minus the amount he has stated it will cost to complete the original works - and then get someone else in as a matter of urgency. We are in the difficult position of being left with an unfinished and not secure property over the Christmas period which is frustrating and very worrying.
Expert:  Harris replied 1 year ago.
You will need the builder to explain himself first as if you employ another contractor without the current builder having an opportunity to set out reasons then this could impact any future claim you have if you proceeded with an action against him.
I think it would be best to have have a formal meeting with the builder and have your discussions and outcome recorded in writing so that you can both refer to it in future.
Customer: replied 1 year ago.
Thanks. Your guidance is very much appreciated.
Expert:  Harris replied 1 year ago.
Thanks - hope it all works out