Hired the cheapest builder

This is a refurbishment disaster story. These stories are shown as examples of how good people can get in financial trouble when hiring a builder.

Introduction

The Client was a married couple who bought a plot of land with intention to build their ‘dream house’. They hired an Architect and got planning permission from the local authority and looked for a builder.

They asked their friends and family if they knew any builders and also researched themselves. Then they contacted several builders and got prices from them.

These estimates were too expensive and so they looked for cheaper estimates and spread their net a little wider.

Eventually they found a builder who was within what they could afford. This builder did not have many completed homes that he could point to as proof of competence. But he did have a couple of completed homes in the area and so they took a chance and signed a contract with this builder.

Problems throughout the construction process

The couple faced many of the same issues that Clients face in a construction project.

Staff and project managers were changed a lot

Every month a new site manager would be appointed, and the old site manager would have left the company or be working on another project. This meant that there was no real continuity and the couple had to start again with each new appointment.

Delays onsite

The works had to stop for several weeks – this was due to the builder not filing the correct paperwork on time which meant that a complete investigation by the local authority had to take place.

The builder promised to shorten the program and catch up as much as possible so that they could move in at a certain date and so the homeowner sold their existing house. Unfortunately, this date passed and the couple had to rent a home.

Issues with quality

A surveyor’s report found a lot of problems with the build and the couple requested that all of these issues be fixed.

The couple started hearing that other people were having problems with this builder. The builder passed this off as ‘problem Clients’.

Legal issues

In the end the homeowners hired a lawyer and upon some initial investigations it turned out the builder had not paid their suppliers and subcontractors in several months.

This led to the property being vandalised by some angry subcontractors even though the builder had long since been terminated from the contract.

The builder filed for administration several months legal proceedings were launched against them.

In the end, the Client had to pay for all of the incorrect works to be replaced and also the works to be finished even though they had paid for most of this works already. So, they not only went over their budget but really went far beyond it.

Summary

The homeowner went for the cheapest builder. They started out correctly and obtained several quotations. If all of the quotes came back over their budget, why did they think that if they kept looking that the cost would go down. At some point they must accept that the average cost returned to them is the realistic cost. Why did they think this new builder was so cheap?

They did not do enough research on their builder and so missed out on all the previous horror stories about the builder.

It is important to note that a lot of Clients talk about projects going over budget. This is sometimes laughable because it turns out their ‘budget’ is simply what they can afford. A real budget for a construction project is the actual realistic cost of a construction project. If the Client cannot afford that budget, then they should not proceed. In this case the Client simply found a builder who claimed they carry out the works for what they could afford.

This is how construction projects go wrong!