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How to choose a trustworthy and competent builder and protect against losses from expensive building work

  • Only hire a business that advertises using a landline phone number 
  • Do a companies search and check accounts are filed and robust
  • Sign a written contract as it offers you protection if anything does go wrong 
  • Talking to local plumbers and electricians to find out if they have worked with the building company

The Carillion debacle has captured the headlines — and rightly so. But the crash of far smaller construction firms often goes unnoticed, although the fallout can be devastating.

Each time Anna Alexander, 35, arrives home with her two young children and a car load of shopping, she feels a swell of fury.

Thanks to shoddy workmanship, she cannot park her car on her cracked and damaged drive. And that’s just for starters. 

Sign of the times: Do your homework before choosing a builder or be prepared for the consequences if they go out of business

Sign of the times: Do your homework before choosing a builder or be prepared for the consequences if they go out of business

Fissures have begun to form in the rendering on the front of her house, while rust is appearing on the metal window frames.

Her calls and letters to the company she had employed have gone unanswered.  Anna and her husband now have to face the fact they paid £16,000 for a sub-standard job carried out on the property 18 months ago.

‘I can’t believe what’s happened,’ says Anna, a copywriter. 

‘What’s worse, a friend had used this builder and told me how quick he was — which suited me as I was pregnant at the time.

‘At first, the job seemed OK. But when problems started occurring, we couldn’t get him back. It has been stressful and frustrating.’

When Anna finally caught up with the builder, she discovered that he had dissolved the company, making it impossible to get her cash back.

A lot of the time, having building work done feels like a leap of faith. But are there ways to spot whether you can trust a builder to do the job and not leave you out of pocket?

Country pile: Set in countryside near Wrexham, this new build has four bedrooms, a double garage and French doors opening onto a private garden

Country pile: Set in countryside near Wrexham, this new build has four bedrooms, a double garage and French doors opening onto a private garden

Simon Ayers, chief executive officer for TrustMark Ltd, the Government-endorsed scheme for trades in and around the home, says that before even selecting a builder, you should set out a detailed brief with which to request at least three quotes.

‘Only hire a business that advertises using a landline phone number — be wary of those only willing to give you a mobile,’ says Ayers.

Insolvency practitioner Charles Brook advises doing a credit search on the business and its directors before taking anyone on.

‘Check the Companies House section of gov.uk, where you can access any limited company’s last filed accounts. 

'If the accounts are overdue, late being filed, or the balance sheet is weak, think twice.’

Once you do recruit your builder, it’s important they sign a written contract as it offers you protection if anything does go wrong.

Farm location: Help-to-buy development Hawthorn Close consists of six detached homes, overlooking farmland close to Shrewsbury

Farm location: Help-to-buy development Hawthorn Close consists of six detached homes, overlooking farmland close to Shrewsbury

Brook also advises talking to local tradespeople such as plumbers and electricians to find out if they have accounts with local trades merchants and suppliers.

‘Contractors will be quick to tell you if they have had a bad experience when working for a particular builder, especially if they weren’t paid,’ says Brook.

It helps if your builder is a member of a trade association, and especially if they are registered with the National House Building Council (NHBC).

‘If the builder isn’t around to deal with snagging during the initial warranty period, NHBC suffers the risk and won’t do that too often for builders that have a reputation for going bust.'

Having some form of contract will offer some protection. 

Andrew Burns, director of Atelier MB Architects in Manchester, advises using one of the pre-prepared contracts offered by organisations such as The Joint Contracts Tribunal.

Coastal retreat: Two-bedroom/two-bathroom apartments are for sale in The Coach House, Milford On Sea, close to the beach and town centre

Coastal retreat: Two-bedroom/two-bathroom apartments are for sale in The Coach House, Milford On Sea, close to the beach and town centre

‘These agreements have been tested in law so are likely to offer the best form of protection,' he says. 'If you do your own, it might be harder to predict the ifs and buts.'

David Guest, head of insolvency at Gorvins Solicitors, says it’s vital to be wary of heavily weighted ‘up front’ payments, and requests for early payments on account.

‘Also watch out for third parties claiming to be entitled to receive money on behalf of the contractor,' he adds. 'This may be a creditor or an indication that the contractor’s debts are factored in or invoice discounted and that cash flow is, therefore, an issue.’

If a builder — who is, or should be, VAT registered — offers to work at a discounted price, walk away, says Charles Brook.

‘It is not only criminal but may be a sign that the builder struggles to manage cash flow.’

Meanwhile, for Anna Alexander and her family the options are limited. Anna could apply to court to restore the company to the Companies House register, says Guest.

‘Then, as a creditor, place it into liquidation and appoint a liquidator to investigate the conduct of the builder.’

However, any cash recovered would be available for all creditors and not just Anna. Or she could make the claims against the director.

Anna could report the firm to its trade association. Or find out whether the company has a bond to guarantee its work.

‘It has been three years since the original work was done, which used up all our savings,’ says Anna. 

‘We moved from a tiny house to what was supposed to be a lovely home, but the whole thing has been devastating.’

The overriding rule seems to be: look before you leap.

 

Tags Property

ABOUT THE AUTHOR celebrityrave

Journalist, writer and broadcaster, based in London and Paris, her latest book is Touché: A French Woman's Take on the English. Read more articles from Agnes.

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