Extension - Pre-payment for Materials

Doozergirl

meggles wrote: »

The thing that I don't understand (and perhaps I'm overthinking this), is that the builder is happy to sign the FMB small works contract with the clause re: payment amended to say some materials pre-paid.

Surely if he's happy to sign, he won't do a runner....

But you never know...

If at any point he asks for you to pay £50k up front - don't you think that he may already owe that money to someone else? Who he owes it to is inconsequential to him. He might be genuine and in a bit of a pickle, but you don't want to be the one the house of cards comes down on.

Having had to take litigation proceedings against people before, I am instantly reminded of what the solicitor said to me. He asked if we were sure that the other party had money to pay us with. His exact words were "you can't get blood from a stone" and litigation solicitors are not cheap. You can easily be out of the realm of small claims proceedings.

He can sign an FMB contract (I hope he is FMB as they don't offer their contracts as a free for all anymore) but if he ultimately spends the money and has nothing to pay you back with, you will get nothing. If it is a limited company, he could effectively walk away if it has no assets - and you'd potentially have to pay to fold his business to find out if there were.

I still think that even if he asked for the money the way the rest of us do, I would be worried that he couldn't afford to sustain the build with his own cashflow. Something will go wrong.

The problem is his initial gall, not the subsequent negotiation.

meggles

Thanks everyone! The last line Doozergirl said "The problem is his initial gall, not the subsequent negotiation." sums it up nicely...

I had another think about the sums, and the extension is £80k with vat or £60 without. There is NO WAY £50 is materials...

I told him that we felt uncomfortable giving this amount of monies upfront, and whilst we feel he would be a good builder, we feel uncomfortable with his cash flow.

Any recommendations for builder local to peterborough? :-)

Thanks again. Lesson learned, and luckily no monies lost in the process....

ferretkeeper

Is there any reason you can't buy the materials from whoever the builder was going to get them from? That way he has no concerns over initial outlay, you have no concerns over money being spent where it should, and then you pay labour on an agreed regular basis as the materials are used and the build progresses.

You should be able to negotiate good terms and deals with a merchant if you are spending 10's of thousands in the next few months, so don't let a builder tell you he can get it cheaper...if they do get a discount they certainly don't pass it on to you!

Pretty much every job we've had done in the last 5-6 years, from fencing to laying concrete to kitchens and bathrooms, has been on that basis, where I bought 95% of the materials - the contractor only picked up odds and sods/consumables etc. The contractor told me what to get or even placed the order, then I phoned whoever and paid the bill myself.

meggles

We did think about that - a 'fit' only really job. But... I have a fulltime job and a 1yo & 3yo so my life is full enough. I know I'm paying slightly more for someone to actually source & pay for the materials, but for me it's worth it.

andrewf75

ferretkeeper wrote: »

Is there any reason you can't buy the materials from whoever the builder was going to get them from? That way he has no concerns over initial outlay, you have no concerns over money being spent where it should, and then you pay labour on an agreed regular basis as the materials are used and the build progresses.

But you still have the concern that your builder wanted 50k up front for materials that would never cost that much...

He was trying to rip the OP off. What on earth would make you suggest still using him?!