Keep hold of some cash
Don’t succumb to pressure to pay a big lump sum deposit. Mr Jahangiri recommends no more than 5pc of the total contract value, and then only pay for work that has been completed. “If a builder is struggling financially, a tell-tale sign that there might be problems ahead is that they ask for larger sums of money during construction that don’t reflect work done.”
And, to make sure any post-build snagging is repaired, he also advises you to hold a 2.5pc retention on payments, payable 12 months after the completion of the project.
Red flags
Back in West Sussex, it was not long before red flags began to fly.
First Richard noticed large deliveries of materials turning up at the site long before they could be used. When he queried this he was told that as prices were rising it was prudent to buy now rather than pay more later. He suspects, in fact, that the builder was ordering the items on credit, then charging him and walking away with the proceeds.
Then some of the workmen approached him and asked how often he was paying their boss. Every 14 days was the agreed programme. “He’d told them it was every 45 days, so they were only getting paid every six weeks or so,” said Richard.
He also noticed that the actual speed of the work was failing to keep up with the agreed programme.
However, with his mind on his health, Richard didn’t fully put it all together – even when his roofers confided they were still awaiting payment for a previous job, and a couple of the workers complained they had run out of nails. “I said: ‘You have 35 boxes in the house’, and they said: ‘Yes, but they are the wrong size. And when we tried to change them we were told our account was on stop’.
“As soon as the boys told me they were getting paid every 45 days I should have shut down the site, and ended the contract,” Richard said. “But I didn’t.”
Then in the spring of 2018 Richard received a call from the company’s young project manager asking for a job reference because it had gone bust and he needed a job. Richard was owed £38,000 at that point, and spent another £15,000 on replacing wrong or over-ordered materials.
