Wednesday, 30 March 2016

How should you pay your builder?

Quote:
You should always write a detailed spec of the works need to be done then ask for written quote before start of the job.

If works changed in the middle of the works, you should renegotiate and receive a new quote.

Invoice:
You must always ask for Invoice when the work is finished.

The Invoice may or may not include the VAT (20% or so...) depending on whether the builder is VAT registered (their annual turnover exceeds a certain amount e.g. £65k).

Some builders don't give invoice and insist on receiving cash so that you and them don't pay any tax. While, that's being financially attractive but that's illegal and has penalties of imprisonment and conviction if caught so not worth the risk. Also if you don't receive invoice, you won't be able to claim the costs back when selling the property or reducing it from the rental income.

Payment:
It can be made via Cash or Bank Transfer. Preferably Bank Transfer since it's traceable in case HMRC investigates but Cash will also be fine as long as you have an Invoice and a Receipt from the builder.

Ask for a receipt for each payment for your own records.

Filing:
You should keep all the invoices, payment histories and receipts for many years; 6 or 10? in case HMRC investigates.

Monday, 21 March 2016

My Cowboy Builder - Walks Away!

My Cowboy builder walks away!

He realized he can't deceive me too much and I don't buy his empty false claims and promises.

Glad I didn't overpay him; payments only on a result achieved not on promises.

Why some people promise something without really thinking or meaning to fulfill the promise?

Thursday, 17 March 2016

What Should You Write in Your Contract with Builder?

You must always sign a written contract with your builder.

Never rely solely on the morale or good-will of people. You must verify every claim and not believing anything unless convincingly proven. I paid a very high price to learn this valuable lesson.

That's to support you as well as them and avoid misunderstandings and arguments.

1) Spec or Scope of Works

  • What needs to be done by the builder per room and for the whole house? E.g. rewiring, replumbing, reskiming, etc.
Tips:
  • Detail as much as possible to avoid arguments later.

2) Materials
  • Who should buy them?
  • Who should pay for them?
  • Who should arrange them to be delivered?
3) Price

  • Price for labor?
  • Price for materials?
  • Price for each work?
Tip;
  • Agree a fixed price for a fixed spec
  • In practice spec will always change no matter how detailed you plan or communicate it so leave room for that.
  • It's important to price each completed work because that determines how you must pay. You may also have to delegate some of the works to someone else.

Payment Plans:

Payments should not be based on time but based on a work delivered.

Set realistic weekly goals and only if those goals met, then pay.

Always keep the builder at least one week behind the payment.

Damages:
Make it clear that any damages must be paid by builder.

Deadline:

Set a realistic deadline plus 10% contingency for the spec.
Along with penalty for every delayed day (e.g. £150 per day).
And some bonus to meeting the deadline (e.g. 5% so £500 if price is £10k).


Termination:

If builder doesn't turn up to work.

If builder doesn't have have good progress in the reasonable opinion of the boss.

If builder doesn't meet the deadline.

If builder damages the property.

If builder causes harassments.

Changes to the Spec:

You may want to give some of part of the work to someone else if performance or quality not satisfactory.

That should be allowed and reserved within the contract.

Morning or Evening Daily Reports (5 minutes):
  • What builder has done yesterday?
  • What builder will do today?
  • Any obstacles or blockers need resolving?

Wednesday, 16 March 2016

My Cowboy Builder - Empty Promises on Deadline

My Cowboy builder promised to finish the jobs last week which failed.

Then promised to finish this week which failed.

Now he's promised to finish in 2 weeks time which will probably fail again as he doesn't turn up to work much.

What's your reaction when someone makes empty promises? frustration at start. then thinking to turn this to an opportunity.

Options to Speed the Works up?

1)
Set a bonus and penalty both for meeting the deadline.
In my case it didn't help since my cowboy builder has interest in prolonging the works and working on multiple projects at a time.

2)
Find a trustworthy handyman/builder and send there to assist the builder with the works then deduct his daily fees from the builder's fees.

This sounds like to be a better solution than bonus/penalty. The outside man would be your spy/agent on the job and will scare the builder to do more works otherwise will lose work to the other guy.

The challenge is that they'd have to cooperate.

My Cowboy Builder - How He Cheated on Plastering

I needed a plasterer and my builder said I'll do one wall as a sample free of charge and if you like it I'll do the whole house with a good price.

The sample was amazing, great quality, smooth finish, brilliant; I was impressed and said yeah let's go ahead.

After few days I realized the quality has degraded and the surfaces are becoming more bumpy and rubbish.

Basically what he had done was to do the initial sample with a good plasterer then some of the remaining walls with another junior plasterer and paying him peanuts to save money!

I complained and said you're cheating and I didn't agree with such rubbish quality and only the quality of the initial sample so I won't pay you for this. Do not bring your junior plasterer again because it'll cost you more as you'll have to redo it.

... after some time and naggings, he agreed.

Sunday, 13 March 2016

My Cowboy Builder!

A builder came to do our house refurbishment. I found them from Rated People.

I would purposely avoid naming their nationality or the trade name. Because not naming them may help you be more careful with everyone not just that nationality and trade.

I wrote the spec as detailed as I could and got him to sign it with the agreed price of around £10k labor to build an ensuite, new bathroom, new kitchen, disposal, flooring, skirting boards, safety certificates, etc.

Very quick start in the first week destroying everything, removing cabinets, old bathroom, very impressed!

Second week, worked very well.

Third week, turned up only over the weekend and maybe 2 hours a day!

4th week, didn't turn up much. He seems to have gotten another project.

5th week, slow progress. I complained about slow progress and set £500 bonus if he finishes on the 8th week and set a penalty of £150 per day for late finishes after the 8th week. It didn't motivate him...he seems to have other higher paid projects and doesn't keep his promises!

6th week, slow progress again but also demanded more money. I've paid him almost £7.5k so far but 60% of the job done only!

Problems with the builder:
  • He started very good in the first 2 weeks then slowed down.
  • Not honest and keep making empty promises on when the job is going to finish.
  • Agrees with something then denies. For example, he agreed to paint our external wall then said no I won't do it.
  • Not punctual.
  • He promised to finish the job this week. Lied, only 60% of job is done.
  • He said 90% of job is done. He lied, only 60% of job is done according to the spec.
  • He said if I had worked for Aldi I would have earned much more than what you're paying me! I said I'm paying you £10k labour for God's sake! Basically he's trying to see whether he can get more money out of us!
  • He said I won't do building works again, not profitable! Again trying to see whether he can get more money out of us!
  • He's late on every promise and keeps lying on deadlines.
  • He had promised he would paint outside the house including in the price. Today said, no I wont' do it.
  • He had promised he would pay for the cost of the glass replacement in the porch. Today said, no I won't do it.
  • He damaged our grippers, underlays, lost lights and lamps and broke our manhole lid costing me around £500. He said he will fix all these when damaged. Today he implied he won't fix those.
  • He did some extra work for me and said it's free when he did them. After a week, he started nagging that I did those extra bits for nothing, he said he made a mistake and he shouldn't have done that basically manipulating and trying to get more money... I said OK I'm fair I increase your wage by around £400 for the extra works you have done...
  • He started asking about my salary! I said salary of each person is personal, why do you ask! What was his intention? To see how much more he can get out of us! evil! 
  • He started nagging everyday that you're paying me peanuts and demanded more money. I told him that we had an agreement and nothing changed. He said I don't care about our agreement, I want more money or I walk away.
Range of tricks he used trying to get more money and earlier:
  • to be continued
His personality:
  • Cheating
  • Lying
  • Betraying
  • Promising to finish the job early. Just lying to get the payments earlier.
  • Unreliable on time management.
  • Deceitful & manipulative; trying to get more money than was originally agreed with every trick possible.
  • Denying agreed works
What are my options?
  • Intimidating him; not in my personality yet! I have so much self-control and hardly ever get angry and he can walk away anyhow. But intimidation is a skill that I'd need to learn - not to use against anyone but to defend against those who use it!
  • Manipulating him; not in my personality yet! I'm too honest and frank but something that probably works with such people. A skill to be learnt but to be used solely against those who are manipulative themselves!
  • Sacking him! Risking him to criminally damage the property. Oh yes, Police is often useless in the UK to prevent any criminal activity and can't recover any damage whatsoever when done. Legal system in the UK is stupidly expensive that you must forget about any money any individual owes you. Money paid is a money gone! Also cost of finding a new builder who doesn't know what works are done and with what quality.
  • Paying him a bit extra. It feels awful to give in to his manipulations and tricks but they know you're in a weak position when it's the middle of the work.
  • Setting bonus for early finish and penalty for late finish. I did that but didn't work, not motivated. He probably has other higher paid works and doesn't care about what he promises or agrees to.
My decision:
Not sure yet but I know that the only power we have over such builders is money; not morale, promises, written agreements, etc.

My Tips:

  • Never trust any words or promises. Write down spec and get signed written agreements. At start and in the middle at least 2 times because things can change.
  • Be fair. If genuinely more works added, you must pay them extra.
  • Be prepared that most builders can and will walk away at any time they feel they can't or they don't want to deliver what they promised so control the payment on result only not by time. I made a mistake to tell them I pay you on a weekly basis for a certain part of the project that took about 6 weeks whereas I should have set stages of completion for payments.
  • Assume every promise made is a lie unless proven and observed that it was not then you will control the payments more wisely.
  • Go on site every day and check every stage of the works if you can and ask questions.