Jump to content

Spending Money, Reducing Risk: Due Diligence

Recommended Posts

This post is about attempting to  reducing the risk that self-builders take when purchasing goods and services. By another name:  Due Diligence. The intended audience is self-builders. People who have an on-going building project and are spending what (for them) is a significant chunk of cash. This post (when it's finished) is intended to help readers decide for themselves how to reduce the risk involved in the process.


 The notes below assume that the client (you) is a Domestic Client (under CDM 2015 that term is explained here ).  This post is not intended to be anything more than a general guide. A starting point for your own thinking. The contributors  are not experts. But over time, some of us  have become what the research literature calls Expert By Experience. (Here's a web search that explains the term)


Some members here are professionals - builders, sparkies, plumbers, brickies,  there's even the odd Structural Engineer, a BCO or two, and - praise be - someone who knows about rendering. There's even a man who knows about trees. There's a Planner or two and  we have some people with a good deal of legal experience under their belt: that's not to call them lawyers. They may from time to time let slip that they are - in the business. But Its more common for members to keep that to themselves. There's the odd bar-room lawyer here too.


I would like to emphasise that even if the posts those members write appear to you to be definitive, that the post sounds authoritative, and is exactly what you need to read, members  acting on that advice should still  do their own Due Diligence. Nobody here knows your project as well as you do.


We're all in a hurry to get on with  our building project .


That means KISS doesn't it?


This thread isn't the place for that (KISS). This thread is intended to enable everyone else  to contribute their comments . So it'll go off topic now and then, that's normal. When the comments settle down and the thread loses 'steam', I'll summarise it, and ask the Mods to pin it so we can all have access to it quickly.


Due Diligence needs to be appropriate and proportionate to the project.

So the post is divided into subsections below



A quick note on building projects, family, friends, Mates Rates and Due Diligence.


Here be Dragons. Nasty fiery dragons.


A professional relationship is often impossible  when you employ people close to you. It could be seen as insulting to ask  (say) an uncle to refer you to a couple of his clients to talk about his clients' impression of his work.  Maybe you can't avoid employing a close relative because there have been cost over-runs, and the 'generous' offer is made to sort-it because 'I've done loads-a jobs like this ' .

And S(H)WMO is chittering about completion dates and the kitchen spec disappearing into a forced trip to IKEA.


My own teeth are clenched now.....


There's no way round the problem. Passive Aggression is unlikely to work. The only way I have found round the issue - and its only a partial answer -  is to ask the 'mate' to do very small bits of work, and try to build a good working relationship from there.

Mates Rates is often a diplomatic nightmare.


Maybe you have a good handle on how to deal with poor work and Mates Rates. Please contribute below.


At it's simplest,  Due Diligence is about risk reduction. It can be a hugely resource intensive process, and at the other end of the scale it can be a quiet word in the pub with someone who has worked with [...]


The  process needs to be proportionate to our needs. The notes below disregard the 'heavier' end of the scale: there's little point in doing Due Diligence on British Gypsum, but there is every good reason  to think about why plaster board is being offered at a very low price on Ebay. And you really do need to look what a Check-a-Trade operative has built before now



Due Diligence: The online guidance

Bearing in mind the caveat that the Internet is full of shared ignorance, and on Social Media in particular, I've done a few searches and read some apparently authoritative sites  to promote  discussion here.


Here's what architecture100 has to say on the matter

The Construction Wiki has this to say about the process

This section on the Master Builder website had me sucking my teeth about what was left out of their advice, but for the sake of completeness, here it is.

Here's another Architect's take on the matter . I haven't found any Architectural Technician's website offering advice on Due Diligence.


Social Media.

I'm not sure whether to recommend that we check a trader's or company's social media profile. Those profiles are  so easily manipulated. But on the other hand , it only takes a few seconds and may provide some pointers to further research.


Companies: for example window suppliers or build-system suppliers


I'm very conscious that concerns originating in this sector of the build market 'caused' this thread. Many contributors  had good points to make, and I'll summarise them in the pinned thread (later)


Sole traders


How do you check (do Due Diligence on) a Sole Trader? At first it seems a daunting task but , broken down into small chunks the task becomes manageable.

The process of building a house relies on networks of people.  Many of whom will know one another, or 'of' one another. That network is invaluable. And it is often exactly what is not available to the average Domestic Client. You can - with a lot of effort - break in to that network.  But it takes time. Nobody wants to spend more time than necessary building a house.  Locally it is common to hear of customers waiting for a couple of years for the 'right' builder to become available. In Due Diligence terms, a customer makes the judgement that it is worth the wait to have builder X working for them. The risk is acceptable


Due Diligence is hard work. It involves active listening and listening between the lines. Some 'cues' are easy to recognise. Like these   for example;

"But I thought the decision to buy [...] was a Done Deal .... Why are you hesitant now?


Another useful cue is the persistently unanswered phone call, the unanswered emails.


Asking for referrals from someone who is already working for you is a good method of risk reduction. Traders are unlikely to recommend poorly performing colleagues.


I'm sure there are aspects of Due Diligence that I haven't covered. Thats why I hope that you'll add to the thread below: tell us what you think, what worked for you.  So we can all benefit from what @MikeSharp01 memorably  calls the Hive Mind.

Online resources

Expert By Experience: web search 19/04/2023 https://ggle.io/5i5v

Architecture 100 website downloded 19/04/2023 https://bityl.co/IGSE

Construction Wiki 19/04/2023 https://bityl.co/IGSV

Master Builders website on Due Diligence 19/04/2023  https://bityl.co/IGSp

  • Like 2
Link to comment
Share on other sites

All my suppliers of services came from direct recommendation of other people on site or I already had previous experience of them as a company, those companies are the ones I took recommendations from. There was two exceptions two exceptions to that, the company that did the roof structure and our standing seam roof covering.


The roof structure company wanted a material deposit, this deposit was to be paid to the company building the roof posi rafters.  I insisted the deposit would not be paid until I was copied on all correspondence with the third party company and had seen the PO issued. A final payment had to made for material prior to them starting at site. So agreed that as soon as the lorry was parked by our house I would release the funds. Which I did, they started work the next day.


The other company and all other companies were paid for work and materials after the work was completed, or I purchased the materials myself and free issued on a labour only basis.


How you mitigate for a company going bankrupt, is difficult. Durisol went that way after our build was completed. But having a more normal build you can at least spread your supplier base so all your eggs aren't in one basket.

  • Like 2
Link to comment
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
  • Create New...