Problems with a building contractor that has abandoned the works.
It is neither the first case nor will it be the last; quite the opposite, since the contractor or builder who “flees” and abandons the works, simply leaving without so much as a goodbye note, is a classic, recurring situation. They leave and abandon the job for one reason or another, reasons that unfortunately recur in this type of contract.
They leave because they got the quote wrong (too low) and the contractor thinks they are losing money, or because they do not get on with the owner, who demands new things or things different from what was agreed, or because they use it to pressure the owner into agreeing to increase the price of the works, or simply because they have problems or things are going badly for them.
The scenario is as follows: an owner wants to build a new property on their plot with their design in hand, or to carry out a significant alteration, or simply works without a design, which they entrust to a known, recommended builder they have been told is trustworthy. In the end, however, due to problems with the builder, the works are never finished.
Sometimes, after the owner and the future contractor meet and a good impression has been made, the first unexpected surprise appears in the contract to be signed: the contract has to be signed by a company owned by the contractor or their family.
This is the first problem that can arise, because if the company has no assets in its name, and the contract is terminated before the works are finished or the contractor simply breaches it, suing is almost pointless, as the company will have no solvency or assets.
It is also likely that the works will be carried out without a quantity surveyor or architect, as the owner will think these professionals will make the works more expensive. But not having these professionals has the drawback that nobody is certifying the works as they are completed, and consequently we cannot reliably know how much work has been done since the start.
The second problem: if there is no professional certifying the works carried out and there is, for example, a balance in the owner’s favour, the owner has to hire a new professional to assess the value of what has been built and compare it with what has been paid to the contractor in order to prove it. Of course, you should never be tempted to pay “cash in hand”, as that amount will not only be illegal but will also be impossible to justify when calculating and proving what the owner has paid.
The combination of works carried out and certification signed by the quantity surveyor is useful, because you pay only for what has actually been done, and not a single brick more. Not to mention the support that professional provides, which always comes in handy, for their advice, their insurance, their ideas and for correcting in time anything the contractor has done badly.
But most of the time there is no quantity surveyor who has certified the works and their value, and we find an owner whose works have been abandoned and whose contractor has apparently received more, between advances and funds for buying materials, than the value of the work done on site.
So what should be done in that situation? A professional should assess and value the works carried out on site, the contractor should be credited with what has been paid so far, and the resulting balance established, if it is in the owner’s favour (when more has been paid than the contractor has built); then that balance should be claimed from the contractor who has fled, if the contractor or the company that signed the building contract is solvent and has assets. And good luck.
It is important to know who has possession of the works, because matters become more complicated for the owner if the contractor leaves someone on guard, or simply locks up the site to make it look as though they still have possession, thereby putting pressure on the owner to pay what the contractor believes is owed to them and preventing the owner from entering the works. In fact, the owner will not be able to change the locks to keep the building contractor out, since that could be illegal. It is that surreal, and that complicated.
Tips to avoid problems with building contractors:
To avoid problems, we therefore recommend:
- 1) Choose very carefully who you hire. It is not enough for them to be recommended or to have proven experience; they should be a company or self-employed builder that is likely to be solvent and will not lead us into a fruitless claim.
- 2) It is also advisable to make clear to building contractors, and have them sign in writing, that they will not have possession of the works. And, where applicable, not to leave them keys.
- 3) Keep everything properly documented: signed contracts, fixed-price quotes, proof of payments by bank transfer, etc.
- 4) If possible, hire a site management team (at least a quantity surveyor) independent of the building contractor, who issues the relevant progress certificates every week or two and acts as a privileged witness to what happens on site.
Otherwise, if the works are abandoned or halted, possession of the works will be open to dispute, and you will have to hire an external expert architect or quantity surveyor to draw up a statement of what the owner has paid and quantify the works carried out and their value. The balance must then be claimed by specialist lawyers. Get in touch with us.
DPcon Reclamaciones Daños Constructivos.
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