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Dispute around building costs with the building team who are renovating our property

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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 ...


Edited by James Frome
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