What steps should I take to pay a builder?

ahfh1

Hi,

I will be speaking to some builders soon about building an extension. I want to be straight with them about how and when they will be paid.

I expect the extension to cost around £40k. Should I first agree with the builder that he will be paid in installments? What proportion should I pay him intially, and how many installments should I pay him?

For example, should I give him 25% of the costs up front, 25% when half has been built has been built, 25% when the extension has been completed, and hold back the final 25% say 2 weeks (gives me time to inspect everything and make sure everything's working e.g. electrics, plumbing etc.) after it's been completed?

Thanks

Imp

Get a contract, such as the JCT contract

http://www.jctltd.co.uk/stylesheet.asp?file=29072005100153

look at the payment terms in the contract, and stick to them. Don't even think of spending 40,000 pounds without a contract.

chappers

Would agree with Imp, set up a contract with an agreed payment schedule included, preferably a JCT or at least something like the one on the FMB website.
Write into it a prearranged payment schedule based on works completed.
I would think of retaining a small proportion say 5% for 3 months against defects, think of breaking down the payments into something like footings and foundations, brick work to wall plate, weather tight and then completion.

keystone

Yep - stage payments against measurable milestones of achievement. If you go for the retention suggested (which seems a bit on the high side if he's guaranteeing his work) you might have to expect his acceptance of it to be reflected in a small price increase.

Cheers

Plasterer

Agree with IMP, If you give a builder 25% (£10,000) up front without a contract in place your playing roullette!!!!! Make sure the company you choose is a fully reputable building company and get some evidence of their works, how long they have been trading etc. Also please ensure they have public liability I would suggest at least £5 million coverage.

waveyjane

I think others have pretty much answered you question, but I've just finished having an extension built and we went for an FMB form F220: Domestic Contract for Minor Building Work and arranged for staged payments after each of the main council inspections for footings/drains, then walls, then roof and then a final payment for all the rest (fixtures and fittings) at the end.

Note that the contract said we retained 5% from each payment, which we keep for six months after practical completion, so they (or somebody else) can come back and fix anything. We then pay that retention (assuming it's not been used) and the job is done.

slummymummyof3

You could also open an account with a builders merchants and buy in the materials yourself - that way you are not effectively paying the builder 'upfront' for materials. This also gives you an opportunity to source materials more cheaply by shopping around.

Build Center are pretty good for this. Cavity wall insulation, floor insulation etc I suggest you look at someone like seconds and co (online), windows - try dunsterhouse.co.uk, roof tiles you can often get reclaimed ones on ebay really cheaply - there is a lot of opportunity to save money sourcing the materials yourself (if you have time)

To make it cheaper, you could project manage yourself and get someone in for the groundworks, brickies for up to dpc and then up to wallplate etc etc

themanbearpig

Out of curiosity, how much of the £40k is materials, and how much labour. And how long will the build take, and how many people will the labour be split by?

Just trying to understand why extensions cost so much!

slummymummyof3

themanbearpig wrote: »

Out of curiosity, how much of the £40k is materials, and how much labour. And how long will the build take, and how many people will the labour be split by?

Just trying to understand why extensions cost so much!

A lot depends on where you live, what the extension actually is - as in, is it a kitchen or a playroom, is it brick/stone or blockwork and render - the sky is the limit really.

The price of labour has really come down in the last 12 months - brickies quite happily used to charge £250 per day and now you can easily get them for £90 (depending on where you live)

chappers

slummymummyof3 wrote: »

You could also open an account with a builders merchants and buy in the materials yourself - that way you are not effectively paying the builder 'upfront' for materials. This also gives you an opportunity to source materials more cheaply by shopping around.

Build Center are pretty good for this. Cavity wall insulation, floor insulation etc I suggest you look at someone like seconds and co (online), windows - try dunsterhouse.co.uk, roof tiles you can often get reclaimed ones on ebay really cheaply - there is a lot of opportunity to save money sourcing the materials yourself (if you have time)

To make it cheaper, you could project manage yourself and get someone in for the groundworks, brickies for up to dpc and then up to wallplate etc etc

Most builders are very wary of working like this I have done it in the past and it usually always turns out to be a disaster.
It is fine if your client is there all the time and can ensure your materials will be there on time but usually after a couple of days the client ends up saying oh could you just get that for me as I'm at work. He can't just pop to the builders merchants when you need the odd length of timber, also you send him off with ashopping list and he either comes back with the wrong stuff or comes back with nothing because he didn't realise that x could have been used instead of y.
Unless you have experience of managing a project i would stay away and get aprice for athe complete job.

DVardysShadow

chappers wrote: »

Most builders are very wary of working like this I have done it in the past and it usually always turns out to be a disaster.
It is fine if your client is there all the time and can ensure your materials will be there on time but usually after a couple of days the client ends up saying oh could you just get that for me as I'm at work. He can't just pop to the builders merchants when you need the odd length of timber, also you send him off with ashopping list and he either comes back with the wrong stuff or comes back with nothing because he didn't realise that x could have been used instead of y.
Unless you have experience of managing a project i would stay away and get aprice for athe complete job.

Agree. It is also a bit iffy to insist on a guarantee from the builder to cover his use of the materials you supply. If it goes wrong, you have less claim on the builder - you have given him a very plausible defence.