Protecting Large Purchases

[newhome]

We have had several discussions in the past about how to protect large purchases against the supplier going into administration, with the favoured option being to pay a small deposit by credit (not debit) card if at all possible that will protect purchases of between £100 (per item not total invoice amount) and £30k. This protection is provided by Section 75 of the Consumer Credit Act. Often however it seems that the supplier won't accept a credit card payment so what to do instead? 

 

I came across this website and wondered if this has a place in the self build community? It's neither a recommendation nor an advert for the company as I haven't used them and nor have I heard of them before, but the fees seem pretty reasonable (assuming there are no hidden costs). The supplier will have to agree to the arrangement too of course. Their website claims that they are FCA regulated. So caveat emptor but it may be worth a closer look the next time you have to pay a supplier a large amount of money in advance of goods being delivered. 

 

https://www.transpact.com/

 

 

[nod]

Great post 

 

I was watching building the dream yesterday

and there TF supplier went bust without warning 

[SuperJohnG]

I'm very interested in this also. I was at a seminar for a SIPS supplier and ask ednthe question about what happens if they go into administration and there is a latent defect in the panels system or similar, which has then led to me questioning how is your money safe when making particularly large purchases going from the point of order to receiving delivery. 

 

The main one being if you've outlaid 50-100k to a TF/ SIPS supplier and they go bust as you would have no way of knowing this was going to happen unless you seen the up to date balance sheet but even at that it could be completely fabricated evidence.  

[newhome]

38 minutes ago, SuperJohnG said:

 

I'm very interested in this also. I was at a seminar for a SIPS supplier and asked the question about what happens if they go into administration and there is a latent defect in the panels system or similar, which has then led to me questioning how is your money safe when making particularly large purchases going from the point of order to receiving delivery. 

 

 

What was their answer? 

 

In theory if your goods are with the company ready to be dispatched you should still be able to receive them. This is more likely to be the case if it’s a bespoke order. 

 

“If your purchase is completed, packaged and ready to be dispatched in the retailer's warehouse, they should still be able to fulfill your order. You may need to reconfirm delivery and in some circumstances arrange to collect the item yourself if they are unable to get it to you”

 

50 - 100k is a crazy amount to pay with no protection so there must be a way of safeguarding money paid. 

[scottishjohn]

24 minutes ago, newhome said:

 

What was their answer? 

 

In theory if your goods are with the company ready to be dispatched you should still be able to receive them. This is more likely to be the case if it’s a bespoke order. 

 

“If your purchase is completed, packaged and ready to be dispatched in the retailer's warehouse, they should still be able to fulfill your order. You may need to reconfirm delivery and in some circumstances arrange to collect the item yourself if they are unable to get it to you”

 

50 - 100k is a crazy amount to pay with no protection so there must be a way of safeguarding money paid. 

ye its called escrow --used widely by people buying things from abroad--a bank or someone has your money and only releases it when the goods have arrived and are OK and they decide on any arguments  if the contract has been fullfilled or not-- a solictior can do it --common in usa for house purchases

 there would need to be a  detailed contract for purchase --so the bank /solicitor can make a decsion if it has been fullied correctly  in the case of a dispute

Edited October 31, 2019 by scottishjohn

[SuperJohnG]

40 minutes ago, newhome said:

What was their answer? 

 

'Erm...erm don't worry about it as you'll have purchased a structural warranty'

 

Now we all know how much use they are.

 

My question was really what warranty did they offer on the kit..but it was nothing which surprised me.  

[scottishjohn]

1 minute ago, SuperJohnG said:

 

'Erm...erm don't worry about it as you'll have purchased a structural warranty'

 

Now we all know how much use they are.

 

My question was really what warranty did they offer on the kit..but it was nothing which surprised me.  

what warranty do you get if you buy a s/h house --sod all--

[recoveringbuilder]

54 minutes ago, newhome said:

y if your goods are with the company ready to be dispatched you should still be able to receive them. This is more likely to be the case if it’s a bespoke order. 

Funnily enough I had a chap here yesterday who was telling me he’d done several self builds himself and he said the last one he did the timber frame company went into administration before he’d had delivery of his windows, the windows were in the company yard but he could not get them as the administrators wouldn’t release them, cost him thousands to then have to go and buy windows.

[newhome]

1 hour ago, Christine Walker said:

Funnily enough I had a chap here yesterday who was telling me he’d done several self builds himself and he said the last one he did the timber frame company went into administration before he’d had delivery of his windows, the windows were in the company yard but he could not get them as the administrators wouldn’t release them, cost him thousands to then have to go and buy windows.

 

Yes I wondered about that. I have a couple of friends who have just been hit by this. Paid for equipment (not build related) up front. Made to order. They were then contacted by the company to pay for the items to be delivered as their order was ready to be dispatched and on paying the company went into administration. They are not being allowed access to the equipment despite being ready to dispatch (allegedly). So it seems that what should happen, doesn’t. 

[joe90]

16 minutes ago, newhome said:

the windows were in the company yard but he could not get them as the administrators wouldn’t release them, cost him thousands to then have to go and buy windows.

 

Seems bonkers and totally unfair.

[Ed Davies]

The small print on most paperwork for these sort of things says that title doesn't transfer until the goods have been paid for in full. It's funny how the inverse doesn't seem to apply; once you've paid for the goods they don't seem to become your property. Shouldn't it be that if the administrators dispose of the specific goods you've paid for, and therefore own, to anybody else it's straightforward theft. A lot more complicated when it's only a deposit which has been paid or you've paid in full but the goods aren't yet on their premises (e.g., on order from or waiting to be ordered from their suppliers).

Edited October 31, 2019 by Ed Davies

[scottishjohn]

7 minutes ago, Ed Davies said:

The small print on most paperwork for these sort of things says that title doesn't transfer until the goods have been paid for in full. It's funny how the inverse doesn't seem to apply; once you've paid for the goods they don't seem to become your property. Shouldn't it be that if the administrators dispose of the specific goods you've paid for, and therefore own, to anybody else it's straightforward theft. A lot more complicated when it's only a deposit which has been paid or you've paid in full but the goods aren't yet on their premises (e.g., on order from or waiting to be ordered from their suppliers).

"possession  is 9/10 ths of the law"-- remember that one .LOL

 it could be that the goods you paid for have in actual fact not be paid for by your supplier ,so the supplier will claim them back if they can 

 so they were not theirs to sell you 

 escrow will protect you from that -an expense ,but if worried thats the safety net

Edited October 31, 2019 by scottishjohn

[Ed Davies]

1 minute ago, scottishjohn said:

it could be that the goods you paid for have in actual fact not be paid for by your supplier ,so the supplier will claim them back if they can 

 so they were not theirs to sell you

Good point. I'd think that's the common case when a company goes into administration.

 

This Dickensian system of payments being delayed 30+ days needs to go. When goods are delivered payment should happen between the moment the pallet rests fully on the  the floor and the forklift finishes reversing away. Ultimately, it's only the bankers who benefit; everybody else along the chain is paying for the borrowing one way or another.

[scottishjohn]

13 minutes ago, Ed Davies said:

Good point. I'd think that's the common case when a company goes into administration.

 

This Dickensian system of payments being delayed 30+ days needs to go. When goods are delivered payment should happen between the moment the pallet rests fully on the  the floor and the forklift finishes reversing away. Ultimately, it's only the bankers who benefit; everybody else along the chain is paying for the borrowing one way or another.

the place that happens in biz normally is petrol sales --a tanker draws up and they want 50k 

I got round that by giving them a lean on my property -to the value pf 300k -- It meant did not need as much working capitol --cos most petrol sales are by card --so unless you pay an extra charge  to get it within 2 days --that could be 7 days before it hits your bank  so summer could be 5 deliveries in a week !!!

winter 2 dliveries --thats 110k of dead money -not counting whats in the tanks 

 same with any biz --thats why you want as long a credit line as you can get

 motorsport parts suppliers -- they always wanted  payment with  order--even if it was going to be a month to delivery - -so of course i did same with my customers 

payment with order --they could change their minds then i,m stuck with something wierd

Edited October 31, 2019 by scottishjohn

[Temp]

7 hours ago, newhome said:

 

Yes I wondered about that. I have a couple of friends who have just been hit by this. Paid for equipment (not build related) up front. Made to order. They were then contacted by the company to pay for the items to be delivered as their order was ready to be dispatched and on paying the company went into administration. They are not being allowed access to the equipment despite being ready to dispatch (allegedly). So it seems that what should happen, doesn’t. 

 

Check the terms of the contract as sometimes full payment is the trigger point at which ownership is transferred. If that's the case I think the administrator should release them.

 

Perhaps taking the administrator to the small claims court would get things moving?

Edited October 31, 2019 by Temp