When do I pay the builder?

[owensblues]

I am hoping to have an extension to my existing house. The quotes have come in and I am just about to choose the builder to use. I'm new to this and was wondering what the usual practice is when it comes to the payment...Do I give money upfront before any work starts? Do I only pay at the end?

I want to be prepared for when I ask the chosen builder what he requires. You hear alot about rouge builders running off with your money on the TV and want to make sure I don't get caught out!

Any advice would be appreciated. Thanks.

 

[joinerjohn]

Usual way is staged payments. Once building reaches certain stages , payments are made for the work done. Don't forget to keep some money back until the job is finished and your completely happy with it.

If your chosen builder asks for all of the money up front, tell him to take a hike and choose another builder.

 

[alittlerespect]

Hi

If I am to be totally honest, as a novice you should have appointed a company to manage the project, they would take all the uncertainty out of the equation.
For example who's done the design and specification, and has a form of contract been drawn up! Who is going to check the quality of the work as its progressing, who is going to value the work done when it comes to making interim payments?

My recommendation would be not to go down this road alone - you still have time to appoint a professional company/person to oversee the project, if necessary delay making a decision until you have thought things through - if not then you need to consider the following:

How long is the work likely to take in weeks - whats the cost?

The contractors should be able to give you the likely duration, divide weeks into cost and pay fortnightly in arrears that will give you a one payment retention at the end of the work, if your not happy with the work then don't pay the final payment until you are!

Before you appoint any builder ask them what their terms and conditions are for payment, what installments they would be looking for, if you don't agree with it offer the above set up. If they won't accept it then do not appoint that builder. Walk away and think again - follow 'joiner johns' advice.

If you are using a small local builder they may want say 20% of the value of the work up front (if so take out the 20% of the cost of the work and then divide the number of weeks into the remaining amount and follow previous statement. Under normal conditions you should expect contractors to have completed say 2 weeks worth of work on site before making any payment.

One question - have you asked for references - if not do it now, ask for 5 references and check out 3 references before you proceed any further.

Before you make any commitment - check out all the contractors on the above points and then get back to this discussion thread with their answers and if necessary delay appointing the contractor - do not tell them that you are using this forum as it will likely put their nose out of joint!

You may consider the cost of hiring professionals a tadd expensive, but they could save you one hell of a lot of headaches if things go wrong and if they don't then they will make life so much smoother for you - well worth the investment!

Regards

 

[freddiemercurystwin]

Have good drawings prepared and choose a good builder by reputation and ignore alittlerespect's scaremongering. Spend the £4K you'd spend on a Project Manager and fit a better kitchen or whatever.

 

[joinerjohn]

Two threads where alittlerespect has now suggested employing someone to project manage an extension.
IMHO average joe public can usually manage to do this themselves. Building Control will be involved at various stages throughout the build. They will certainly ensure it meets building standards.
The OP is asking about, when he should make payments for the job, not for advice on project management.
As a little respect has said, ask for references from previous customers the builder has been employed by. Some builders may well want weekly payments in these times as they have little work on and still have staff to pay etc.
Some homeowners even employ different tradesmen directly. A brickie for the main build, but then carpenter, electrician, plumber etc.
A good builder will almost certainly have no objections to you, using your own tradesmen and may well be able to recommend these, should you not know any.

 

[noseall]

Ignore ALR's advice and employ a recommended trusted builder. He is on a different (commercial building) planet.

You do NOT need to fork out 4K for a p.m.

You should only be forking out when you have received a product to the value of your payment, i.e. when the builder has completed a stage and it has been passed by building control.

It is not unusual for a builder to require some float, but even this needs discussion. I, for example, do not mind customers dribbling money to me as and when it is needed like paying for concrete or steel deliveries etc.

 

[Steve]

I have just been thinking about this. IMO it would be a good idea, if staging payments, to set up a "running statement", showing payments made and the outstanding balance. It would also show any agreed extra costs, as you add bits onto the work. At each addition to the statement, both parties sign to agree the payment made/recieved, and the balance left.

 

[noseall]

I have just been thinking about this. IMO it would be a good idea, if staging payments, to set up a "running statement", showing payments made and the outstanding balance. It would also show any agreed extra costs, as you add bits onto the work. At each addition to the statement, both parties sign to agree the payment made/recieved, and the balance left.

I keep a record and ask the customer to do the same. Every so often i will compare accounts to see we are both on the same page.

As for additional costs, these too are kept in the same book. Hours worked, dates and materials are written down then itemised and added to the final bill.

 

[jeds]

It really depends what sort of value you are talking about. If it's a 20k extension then agree to pay for work satisfactorily completed on a weekly basis. If you have to pay up front for bulk materials only do so if you can pay direct to the supplier. Problem is that most builders add a percentage for handling and supplier discount and they may not want you to see what they are adding. Whatever you do make sure it is agreed in writing before you start.

If the works are 50k plus then I wouldn't advise you to deal direct with a builder. A professional will only want about 5% to handle things for you and it will be money well spent. The professional will agree what has been completed at the end of the week and will chack that is is as specified and satisfactory. You have peace of mind that you are not getting ripped off and you have the PI cover of the professional if things go wrong.

 

[alittlerespect]

Well Its getting late and I am getting a tadd bit irritable, especially when I see comments aimed at me about 'scaremongering' and money better spent elsewhere!

This country is littered with people like yourself OB, people whose lives have been absolutely ruined by sub-prime building contractors.

At the end of the day OB it is your choice on which path you choose to take, I am only offering some impartial professional advice (take it or leave it at your discretion!)

Regards

 

[Thermo]

and others are offering their impartial and professional advice as well. do they need to get irritable as well?

 

[steveb1964]

4k for a PM your having a laugh

Get a builder upon recommendations, don't always go for the cheapest quote, view some of their work they've done in the past.

As for being a novice building regs will be checking the work as it goes along so no need to worry.

Stage your payments, never pay the full amount upfront and only pay once the set out stages have been completed.

 

[noseall]

As for being a novice building regs will be checking the work as it goes along so no need to worry.

There is no remit within building control protocol that automatically deals with quality.

 

[steveb1964]

As for being a novice building regs will be checking the work as it goes along so no need to worry.

There is no remit within building control protocol that automatically deals with quality.

Not quality which is why you go for recommendations. They do check things like depth of foundations etc to make sure the builder is building to meet the building control guidlines or so they've told me!

 

[noseall]

Precisely.

Which is why, just because a project has been inspected and subsequently passed by b.c. is no guarantee that you will end up with a quality product.

A poor quality extension complete with b.c. certificates will render a home unsaleable just as easy as one that has a quality extension without paperwork.