Why do builders costs always go up?
Property problems, Good Builders, Surveyors and Cowboy Clients!
This article on builders and costs has been written by an Independent Surveyor who is also a Builder.
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What is a quote?
Generally in our experience when a builder provides a quote he is looking to give a firm price for some work. There may be elements in it that are not firm and not fixed and these will tend to have provisional sums against them or prime costs. In large contracts provisional sums and prime costs are very well defined.
A provisional sum defined
A provisional sum being an approximate amount that may be used on something or may not be
A prime cost defined
A prime cost being the basic cost of something.
The builder has given me an estimate
In the case of an estimate we would tend to think of this as something where the builder is giving an indication of what the costs are going to be. It may simply be that the builder has used the term estimate rather than quote and does mean for it to be a fixed and firm price. You do need to check this out. You do need to also watch to make sure that the builder doesn't have pound signs in his eyes.
How do I get the builder started?
We would suggest that you write a formal letter or email to confirm the agreement in a language that you understand. You may want to refer to the builders quote or estimate and make any comments on areas that have been changed. It's all very well being friendly with the builder but you do need to have some information in writing so if things go wrong these letters or emails can be referred back to and they are very useful documents.
Let's talk about having disputes before the project has even started
We have made this comment because if there is a dispute you can refer back to your emails or letters that explained what you wanted. You could literally say to clarify your estimate or quote that is for x, y and z, it is for a fixed price of £x, 000 and the work is to be carried out between the 1 st September and the 22 nd October. The contract period is for seven weeks.
We always recommend that some form of agreement takes place with regard to additional work so within your letter you should have a section that says should additions or amendments be added to the project we recommend that these are calculated on pounds per hour of time served actually at the property, materials at cost with you (not the builder) keeping any discounts you have with the merchants. You could also put a clause in there with regard to time that if the project runs more than one week or two weeks over the contract period then the other party is allowed to renegotiate or stop the contract whatever you wish. Should there be additions I understand this may affect the amount of time and we would also recommend that you put can you identify any material orders that you feel would effect the time as it is critical to me or something along these lines.
Include how you are going to pay the builder
Most important in your letter confirming that you are having the work carried out and the dates etc. confirm how you will be paying the builder so this is clear from day one. Advise them that you will be paying weekly or that you will be paying monthly or that you will be paying at the end of the job. Advise them if you are going to have a retention at the end of the job.
What is a retention?
A retention is where you hold back 10 to 20 to 30% of the job depending on what it is, as a sum of money to be released once you can see that all the work has been carried out properly. This is normally after what is known as a snagging list.
What is a snagging list?
A snagging list is a list of all of the items that you don't feel have been carried out as per agreed and the specification.
The builder has built to time and within the budget and everything is good
If you can say the above sentence once you have had a builder carry out work for you then you are probably in the minority and should be recommending the builder far and wide providing of course the job stays a good job over the years. We often say that even a bad builder can do a good job to last 12 months. It's what it looks like in two, three or ten year's time that can be a problem.
A builder has just given me a bill for a lot more than the original quote
This is more typical of what we see when a building job is going wrong. We never seem to hear that a builder has just invoiced or billed someone for much less than the original quote!
Arguments and disagreeing with your builders
Often as building surveyors and builders we are contacted to sort out arguments and disagreements that the clients have with their builders. (We are called by both the clients and the builders). Often we come across arguments and disagreements over the quality of the work and in addition to this the amount of time taken by the builder also seems to have increased. So much so that it seems to have almost become a norm on all building projects. We as I am sure you have, have heard of building projects that have become a nightmare and where the final price has doubled or worse from the original quote. How can this be the case and how can it be so common with builders?
Builders intentionally don't see things
When a builder is asked to quote on an extension or alteration where walls are being removed or a new bathroom or any job it doesn't actually pay them to identify and spot things that haven't been noticed by the client. If they do point them out then their quote is likely to be more than another builder who doesn't point out the problem and the builder knows as he is a builder that the client won't have spotted the problem as most clients only live in houses, they don't know anything about the building whatsoever although they may think they do if they have carried out some DIY.
Everyone thinks they are a builder
In most cases the clients will not be experienced in building work and will be asking for the work to be carried out in a non-technical manner. A wise builder will always then prepare a quote framed in the way that best suits the builder to make it most likely for him as the builder to proceed with the work. Why wouldn't he as quotations despite what is said are not free and take up time and are expensive for builders to prepare. The fewer they prepare and the more work they win the better.
Builders speak and clients speak in different languages
When a builder and client meet they are often from quite different places in what they are trying to achieve and they also talk in quite a different language. For example where a client asks a builder to take down a wall does the builder assume that is all the client wants to do or do they ask the client do they also want the radiator that is on the wall moving together with the plumbing pipes that are in the wall. Do they want the electric socket and switch point on the wall also moving? Do they want the builder to check if it is a structural wall before they remove it? So you can see that from quite a simple phrase of being asked to remove a wall that this on its own can lead onto lots of further questions. You could argue that the builders are doing this on purpose.
There are many unknowns when building, many builders and clients just want to get on with the job
With most building jobs there are many unknowns. Some of them are absolutely essential and need to be resolved before you start but lots of them can be sorted out as you go along and often this is the best way to do it for both the client and the builder on a smaller job. However it does mean the job could carry on for longer and be more expensive. There are some things that a good builder would see that a bad builder wouldn't. For example we have come across situations where a bad builder has removed structural walls because they didn't understand how the building was built and equally we come across a bad builder who knew that the wall wasn't structural and removed it yet they didn't mention to the client that given the age of the property which was quite new the radiator pipes are likely to come down through the wall and therefore when they took the wall down these pipes were exposed and then needed rerouting meaning an extra job and extra time.
What can Building Surveyors do to help with the unknowns?
Often a building surveyor will know from their experience with all sorts of different types of buildings the sort of unknowns that can come about and they can either say to the builder that it is most likely to be x,y,z and they should quote for that or alternatively they can get the builder to quote for several different senarios which should cover you in each case. It should be remembered that most clients who build regularly will use a building surveyor to help manage their developments and monitor what the builders are doing.
One of the worst things for a client is extra cost during a building project. One of the best things for a builder is extra cost during a building project.
Time and time again we come across builders that have not mentioned things that may be a problem as they fear the client won't go ahead as they will no longer be the cheapest option. The builder is then in the catch 22, if they mention the problem they may not get the work or the client may not go ahead, if they don't mention the problem then it comes up when the project is half way complete the client is likely to carry on and find the money from somewhere.
Let's take this simple example of taking the wall down a bit further. Taking the wall down is to enlarge the building, add another building on or open up into a larger part of the property. Just how much extra does the client expect the builder to do? Do they expect them to prepare drawings for the work? Do they expect them to advise them if they will need extra radiators? The answer is that different clients expect different things. Most builders work along the system of when they get to the point in a project they either ask the client what to do or make a suggestion. Some carry on working choosing the best way forward. As you can imagine all of these can end up in difficulty with extra costs being incurred that the client isn't aware of.
This is often the term used where a builder already knows there is likely to be a problem in the future and then builds and builds until he gets to that problem, then asks the client what to do. Of course the client has no technical knowledge and certainly less technical knowledge than the average builder. The client is then left with Hobson's choice or little choice at all and they have to carry on with the work in the manner that they are instructed or that the builder has decided. There are practically pound signs in the builder's eyes as they continue with the work. This can lead to the client taking on the cost or falling out with the builder.
What can building surveyors do to help me?
We can help manage the project with the builder, we can set regular meetings, we can act as an interpreter between building speak and client speak.
You don't want to fall out with your builder as other builders don't want to finish your builders work!
We suggest you re-read the above again and read this bit very slowly. When you do fall out with your builder completely and you say to them to stop work and not return to the building site problems have only just begun. You have a lot of problems to sort out. The first problem is how to quantify the work they have done and the materials they've bought and the time that they have put into it to pay them a full and final settlement and how to get another builder interested who will instantly, having knowledge that you have fallen out with one builder considers you as a difficult client and will therefore price accordingly and have to go back and check the other persons work such as in a bathroom and kitchen project that we were involved with and had to check what pipes were plumbed in and what weren't plumbed in. They couldn't have connected to a wastepipe assuming that it went all the way back to the drains if it then didn't and discharged down say the inside of the cavity wall or on the wall. In fact if it could be seen on the wall that would be better than if it was being discharged somewhere it couldn't be seen. Hopefully you appreciate the problem that a builder taking over another builder's job has to check everything and start again in many cases.
How do you make sure that a building project keeps to price and keeps to the time schedule?
To ensure that the price is kept to by the builder you need to have a specification and specifications need to be specific identifying what needs to be done and how it's done. This will also be of benefit to you because you will be able to have quotes from several builders who will appreciate that you are taking a professional approach by providing such a specification. We can provide a specification and drawings.
The builder said he would provide a specification
Firstly we will reiterate a specification needs to be specific. In our experience builders provide specifications that best suit and present their work in the best way possible. For another builder pricing against the same specification they find it;
2/ do not always agree with the materials chosen
3/ they may not agree with the way of carrying out the work
4/ they may have a better idea of how to carry out the work
Whereas if an architect or building surveyor specifies work they generally quote as per that specification. There will be clauses in there about things that you rarely would think about such as scaffolding requirements to give safe access to different areas, such things as where the builders will store their materials and other such things as what times they will work between and things such as what toilets they will use etc, etc. All of these things help a project go well.
What can surveyors do to help with this?
We can provide technical advice prior to the project and provide drawings and specifications to ensure you get the job you want rather than the job the builder gives you and we can also minimise future delays and future costs by having a weekly or monthly meeting to monitor the work and advise on the quality of the work.
Is it worth me having a contract such as a JCT (Joint Contracts Tribunal) Contract?
On larger projects it is worth having a contract in place that states that if the builder doesn't meet the requirements then there are various penalties in place but in many cases showing a contract to a smaller builder will panic them and mean that they
1/ don't return the quote
2/ add a substantial sum of money to it to ensure that they don't get in their eyes caught out by the contract
Free quote and free lunches
Most builders say that they do free quotes. Quotes are not free as they take time and money and effort to prepare. They normally take a site visit to see the property and also for the builder to get to understand the client. This is why sometimes when people say that they are getting quotes from a builder and they haven't been quoted it's because the builder has made the assessment that the client is too difficult or too awkward and is not interested in the work. At the end the day there is a lot of relatively easy work out there for a good builder. Why would he want to do hard work? Sometimes being hard on a builder means that you don't get any quotes or the quotes you do get are particularly high. It's what's known in the trade as a cover price which means it just about covers every eventuality and the awkwardness of the client if they wish to carry it out.
How do you make sure you are a good client to the builder?
We always say take time to show the builder everything you require. Have a specification of the works that you require and the timescales and anything that would inconvenience you such as working on Saturdays and that sort of thing. Have a deadline set for when the builder should complete. With all of these things have a cup of tea meeting and be flexible as to what the builder thinks is best. If you obtain three quotations you will by the third quotation understand a lot more about builders and building and probably a lot more about yourself. Your approach to builders would have changed to some extent. Make sure you are fair to all builders quoting. Remember it will take them time and effort and energy to produce the quote. You need to make sure that they are happy to work for you and you of course need to have an agreement as to how they are going to be paid. Will it be weekly? Will it be monthly? Will it be as the materials arrive? Will it be as they send in bills? We have heard of many a good building project that was good until it came to the point of having to pay the builder! Many builders use the term cowboy clients for any clients that don't pay and are difficult to work for.
I've been recommended a good builder
We always wonder what this phrase means as often the person recommending a good builder has limited knowledge as the clients don't usually have any technical knowledge to assess if it's a good job or not and in most cases even a bad job will look good for a year to three years. Interestingly when we have questioned people about why they think their builder is good it is often because they have done what they have said within the set time, the set budget or more often than not they say they got on well with the builder and they were helpful. There are certainly more good builders out there than bad builders.
We would refer you to other interest articles on our website:
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If you have a commercial property, whether it is freehold or leasehold then sooner or later you may get involved with dilapidation claims. You may wish to look at our Dilapidations Website at www.DilapsHelp.com and for Disputes go to our Disputes Help site www.DisputesHelp.com .
We hope you found the article of use and if you have any experiences that you feel should be added to this article that would benefit others, or you feel that some of the information that we have put is wrong then please do not hesitate to contact us (we are only human).
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