James Frome

We only started paying attention in February 2024, when the invoices started skyrocketing despite there only being 2% left to pay. This seemed very unusual to me, and it immediately eroded the trust that had up to that point been total. I had really signed the contract, paid and operated in a trustworthy way up to that point, not really questioning anything. I had also assumed that we would be notified of any price changes. What I later learned was that the contractor took a blank cheque position, which was not my understanding of our agreement. In terms of the CITB, I am a bit confused - is the general consensus that this is inappropriate? If not, what specifically justifies the position that we should pay for CITB? Based on the above advice, we have started discussions with a QS. If anyone knows a great one, who would like to be involved, please let me know.

Hi there. To be clear, we are being asked for around £44,000. The contractor wants all £44,000 (this includes £11,000 retention). During financial discussions in February 2024, we agreed to pay a large amount to get us to completion, at which point, we would discuss any outstanding payments. We are now at that point of discussions.

I have posted a few times at various points in this difficult process, but we now have an updated situation. To provide some brief context, we agreed to a cost plus contract with a friend's building company. We signed his contract, agreeing to his PM and QS (we trusted him). It was a Cost Plus basis contract. We agreed 10 payment instalments in a six month window (May - November 2023). Jump ahead to December 21st 2023, and we are still going with the project. The payment plan has increased to 14 instalments, and we have paid 12. We are led to believe that works are close to completion with only a few weeks left aside from decoration (due to conclude by the start of March 2024). By December 21st 2023, we have therefore pay 96% of all costs (including retention). We do raise our concerns with why we are paying so much in advance (in an email on 21st December), but at this point, we ultimately revert to trust (the email was ultimately ignored). Soon after this point, on the 2nd January 2024, the PM suddenly leaves the project. Then, a day before the final 2% is due (aside from retention), around 10th February 2024, we are told that the costings are wrong, and this ultimately leads to a jump of £80,000 ish with a reduced scope of works and plenty of PM done by us (all the decoration, the carpets, the external cladding of an extension). We are consequently charged around £5,000 for the resulting financial discussions including the QS, with the contractor stating: "The QS costs were incurred to deliver this project, as such they're re-imbursable on the basis that this is a cost-plus contract.". We have now concluded the project (aside from snagging) and we are in dispute over a range of items. It isn't legal, yet, but the discourse is heading that way. Given that much of the contract may be construed as a cost-plus contract, certain aspects are complex to contend in a black and white manner. Moreover, the whole accounting process has been unclear to say the least. However, there are certain lines of avenue that I am interested by: 1. Should we be charged CITB tax? We have been (it was never mentioned until March 2024 and it was never in the cost plan upon which the contract was signed). The contractor stated this to me recently when I queried this: "This is mad!! I have explained this so many times. Who are you talking to. CITB is a legal requirement for a main contractor. The amount is determined by the required works on site and varies project to project so is a project cost. Google it." 2. We have received some documents during our queries that give a price with a subcontractor with CIS and without CIS (please see attached image). We have never actually seen a single invoice for the whole works, and have simply seen payment orders issued by the contractor. This subcontractor came in at £65,000 total where originally it was stated to be £44,000 (also the works they were supposed to do came in at £50,000+ over and we were only told about this in February 2024 - they left the project without completing all their works and going £21,000 over - again, we weren't told about this until February). Given our concerns about CITB, we have suspicions the contractor has either not paid CIS or we have become responsible for it. My question about this recently was simply ignored. How can I delve deeper into this in a sensible manner? 3. Are there any questions / specific documentation we should be asking for to get a bit more clarity? Can we ask for certain subcontractors invoices with breakdowns of CITB etc. Can we ask for proof of CIS payments for certain subcontractors to verify we didn't absorb it in any way? I do know that the contractor paid certain subcontractors (like the one referenced above) cash only. 4. Should we be getting the input of a QS or some other profession (we thankfully do have quality legal advice as my partner's father is a construction lawyer)? If we were to get a QS, how much should we expect to pay for this? I have spent about 30 hours going through various financial documents provided, but I still can't pinpoint things (partly because alot of contention points were historical before we clocked onto things being amiss / partly because I feel there are some accounting games going on). Would a QS input be useful if things went legal? Finally, if anyone can recommend a QS, please do (if you advise going ahead with one). It may just be that the QS advises us how to deep dive a few areas that I have already pinpointed as interesting. Thank you!

We have discovered the work is of a very low quality (two builders came up to me on my last site visit to tell me this unprompted). Looking at £60,000 more in costs with them. We have agreed to take over the painting and decorating phase. They did have a QS and a PM.

The building operator is working through a limited company - why is this a problem?

Hi Lofty718, In retrospect, I made a mistake here. He persuaded me, bringing the quote down to £505,000. We had just had a baby (a month before), and I failed to find the resourcefulness to go through the full tendering process (we got a quote from another company that we had been in talks with, but it came in at £600,000 - perhaps they were just highballing as they didn't want the job). I did take the advice on board: I went back to the builder with many of the concerns mentioned, and I thought the adjusted quote seemed more reasonable. However, it seems now it was a mirage. Over the course of the project, my trust increased as we were coming close in on budget - it is only at the tail end where costs have exploded (clearly they have suppressed these until the end, camouflaging the true state of things). I appreciate the comment and input 🙏

In terms of surprises, not really - it was a complete refurb, so we have had a clear picture of the road ahead since June when it was taken back to brick.

It is the builders own contract, although it states it is based on a JCT contract

Some notable clauses: a) If the changes increase the amount of work shown in the work details and X (the building company) agrees the changes, X shall quote a price for the extra work and time involved. The Client will then decide whether to go ahead with the changes. b) X will keep the Client updated on changes on a regular basis

Hi everyone, We have found ourselves in an uncomfortable position, and I would really appreciate some wisdom. For context, a friend (I know!) persuaded me that his building company would look after us. Below is an excerpt: “On the project you would have our Project Manager and a part time Quantity surveyor. Both have it engrained in them to run the project to its highest efficiency. That means ensuring cost control and programme duration. That is their job… Again, from the beginning we will have clear costs and a timeline they are working towards so any changes will have an explanation. I will also have a pretty good steer on things.” Based on this and having known him for over a decade, we settled on a contract which was not fixed price; rather, it is a Cost Plus basis contract. We agreed 10 payment instalments in a six month window (May - November 2023). The house was taken back to brick, so there was a degree of confidence in costs moving forwards. On October 28th 2023, we are advised that there has been an uplift of £10,000, eating into our contingency. We had had no updates with this for the previous six months, so we were annoyed, but let it go, given that we were still well within our worst case scenario. We were given a detailed breakdown of where these extra costs came from. Jump ahead to December 21st 2023, and we are still going with the project. A revised cost plan is sent through, with the anticipation that works would now finish in March 2024. The revised payment plan is accepted (although £5000 under our worst case scenario budget), and we are assured multiple times that the delays will not incur extra management fees by the project manager. Believing the end is close, we pay the next invoice (97% of the current project cost has now been paid - 1% left + 2% retention). At this point, the PM suddenly leaves the project with two days notice. My friend (who owns the company takes charge). Jump to February 1st 2024 (the project is due to be finished in one month), and we are told that we are suddenly projected to be £30,000 over our max budget. We have made no changes to the project between December 21st 2023, and we can't figure out what has happened. It then takes a week for an email to come through detailing where the extra costs have come through (that email arrived in my inbox this evening). Within the extra costs are £7500 of additional management fees for the remainder of the project / £8000 of missed fees from the 21st December 2023 invoice (the QS' oversight) / extra skips and site welfare fees of £2500 (the delays in the project have been down to screed drying time and waiting on an order to arrive - all of this was orchestrated by the PM) / £7000 of additional joinery work (some missed off architects' drawings) - most of this is not in writing although in phone discussions with PM - this bit is a grey area for me / £8000 on extra materials and labour on 8 different tasks with no forewarning. To me, it seems like the QS and the PM completely lost track of the numbers and it all came to a head at the end of the project. My sense is there is some accounting shuffling going on, and they are coming up with reasons to plug the hole that has just recently been discovered. We have seen no invoices with subcontractors, and can't believe costs have suddenly exploded out of control at this point. Up to this point, we made decisions based on the knowledge we had. We were given this knowledge by the PM and the QS for 9 months, and our decisions pivoted around this knowledge. There is still significant amounts of work to be done in certain areas of the house. Any advice / input would be deeply appreciated 🙏 (I realise quite a few mistakes have been made by us along the way in terms of trusting). I can provide further information in response to questions ...

Hi everyone, We have found ourselves in an uncomfortable position, and I would really appreciate some wisdom. For context, a friend (I know!) persuaded me that his building company would look after us. Below is an excerpt: “On the project you would have our Project Manager and a part time Quantity surveyor. Both have it engrained in them to run the project to its highest efficiency. That means ensuring cost control and programme duration. That is their job… Again, from the beginning we will have clear costs and a timeline they are working towards so any changes will have an explanation. I will also have a pretty good steer on things.” Based on this and having known him for over a decade, we settled on a contract which was not fixed price; rather, it is a Cost Plus basis contract. We agreed 10 payment instalments in a six month window (May - November 2023). The house was taken back to brick, so there was a degree of confidence in costs moving forwards. On October 28th 2023, we are advised that there has been an uplift of £10,000, eating into our contingency. We had had no updates with this for the previous six months, so we were annoyed, but let it go, given that we were still well within our worst case scenario. We were given a detailed breakdown of where these extra costs came from. Jump ahead to December 21st 2023, and we are still going with the project. A revised cost plan is sent through, with the anticipation that works would now finish in March 2024. The revised payment plan is accepted (although £5000 under our worst case scenario budget), and we are assured multiple times that the delays will not incur extra management fees by the project manager. Believing the end is close, we pay the next invoice (97% of the current project cost has now been paid - 1% left + 2% retention). At this point, the PM suddenly leaves the project with two days notice. My friend (who owns the company takes charge). Jump to February 1st 2024 (the project is due to be finished in one month), and we are told that we are suddenly projected to be £30,000 over our max budget. We have made no changes to the project between December 21st 2023, and we can't figure out what has happened. It then takes a week for an email to come through detailing where the extra costs have come through (that email arrived in my inbox this evening). Within the extra costs are £7500 of additional management fees for the remainder of the project / £8000 of missed fees from the 21st December 2023 invoice (the QS' oversight) / extra skips and site welfare fees of £2500 (the delays in the project have been down to screed drying time and waiting on an order to arrive - all of this was orchestrated by the PM) / £7000 of additional joinery work (some missed off architects' drawings) - most of this is not in writing although in phone discussions with PM - this bit is a grey area for me / £8000 on extra materials and labour on 8 different tasks with no forewarning. To me, it seems like the QS and the PM completely lost track of the numbers and it all came to a head at the end of the project. My sense is there is some accounting shuffling going on, and they are coming up with reasons to plug the hole that has just recently been discovered. We have seen no invoices with subcontractors, and can't believe costs have suddenly exploded out of control at this point. Up to this point, we made decisions based on the knowledge we had. We were given this knowledge by the PM and the QS for 9 months, and our decisions pivoted around this knowledge. There is still significant amounts of work to be done in certain areas of the house. Any advice / input would be deeply appreciated 🙏 (I realise quite a few mistakes have been made by us along the way in terms of trusting). I can provide further information in response to questions ...

Hi @Lofty718, We are the freeholders I will have a look on companies house. Is there anything of use we can glean from the information on there?

We are taking it back to brick before renovating.

A small saving grace is that the figure did include full interior design (by the architect). It did not include support through the works themselves.

This is something to keep an eye on - to what extent are they double counting? Thanks for raising.