Ralph

Contractor Has Gone Bust

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I've been told by one of his employees that my builder has gone bust. We are trying to find out from him the exact circumstances but he's not being exactly communicative (he seems to be blaming us because he went over on a fixed price job).

 

We have a JCT minor woks contract so the contract administrator is handling that side of things. Luckily, we are near the end of the build and we have retentions that will probably cover 80% of what is outstanding. 

 

I'm trying to get a picture of what we still need to do, the outstanding work will be clear enough but it's the other things I’m trying to get a handle on.

So far I’m thinking I need to sort out:

·         Securing the site, alarms, getting his keys etc

·         Site Insurances, I reckon we have 3 weeks work if I can get trades, but will I need site insurance etc

·         Unoccupied home insurance

·         Structural warranty, I have a feeling he was bullshitting us on that and it’s not in place and has not been inspected as house has progressed.

·         Building standards inspections and completion certificate

 

Anything obvious that I have missed out there, any thoughts.

Thanks folks

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Firstly make sure everything on site belongs to you.

if the builder has been supplying materials then the supplier may retain the right to removal if not paid for.

if you know who the suppliers are, it could be worth contacting them, … then again you could be opening a can of worms and end up paying twice!

if the builder had any morals they would be speaking to you and working with you, sadly many companies going bust simply run with whatever money they can grab leaving you to pick up the pieces.

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Just about everything that can be moved is locked in the house. I think I may change the locks just to be sure.

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The update is that he's not actually been forced into insolvency or administration at this point, he's paid off all his staff and is not doing anything, not even communicating. It looks like we will have to terminate the JCT contract either mutually or using a default clause. 

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Where are you on payments?

 

If you are owed cash a Small Claims action can let you do cute things such as freeze his bank account and have the money paid to you from there, and so on.

 

But you have to get in early.

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Cheers @Ferdinand It's a complicated one. We have retentions to this point so we are covered. By contract terms we can keep that to finish the house then go after him for more as it's a fixed price job. All depends how the contract is termimated.

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The QS or contract administrator should be able to advise.  Sometimes contracts need to be "determined" rather than "terminated".

 

Any goods supplied and fixed on site cannot be recovered.

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At this point I'm glad we do have an architect practice adminstrating the contract and we also fixed price there work. 

One thing I have discovered is https://www.perlego.com/ have a lot of useful books including a few on JCT contract administration and construction law. It costs £12 a month with a couple of free weeks.

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