James Frome

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.

Thanks for the thoughts. The technical designs are not complete yet. This cost plan was based on a number of conversations with the architect and semi-detailed drawings. Therefore, I am not going to jump the gun too much as there are a lot of provisional sums. I will give further updates off our conversation together tomorrow. For now, I have sent this email to the team: " Dear .... We are looking forward to our meeting tomorrow. So everyone is singing off the same hymn sheet, and so you understand our perspective and firm position, we are particularly conscious around the financing of this project. We bought the house for £600,000. We have now spent £693,000 including architects fees, stamp duty and other costs. We are assuming the structural engineer and party wall process will cost around another £7000. This brings the cost up to £700,000. We have a maximum total budget of £1,250,000 (including VAT). We estimate the house with the small extension room to be worth £1,300,000. We therefore are firmly targeting £500,000 (including VAT) as our total build cost with £50,000 leftover as a backup in case of unforeseen issues. If the small extension room isn't given planning permission, the house will be estimated at £1,250,000, and therefore our maximum total budget will be £1,200,000. If we assume the house is 128m squared, including the small extension room, then the total renovation / build cost per square metre has to be £3900 (including VAT). This means, if we assume the VAT to come in at 10% overall (as some will be 5% and some will be 20%), then the total cost per square metre before VAT has to come in at £3500. It is as simple as that, and our decision making flows from this premise. We will have to make some compromises clearly, but we are confident we can achieve a mid-high range finish with this budget. We hope this is clear, and we are looking forward to chatting through this tomorrow 🙏 Best, James & Grace"

It is a renovation. We are knocking down the outrigger and rebuilding that component with a kitchen (designed by the very expensive architects!).

I agree about creating contingency. Ideally, we don't want to be in a pressure cooker of stress, as we have a newborn, self-employed jobs etc. As you say, there are plenty of unforeseens with an old house renovation ...