Section 75 - Builder not completed work - Jan 2020 - UPDATE (2) OCTOBER 2020

hoth0416

Hi all

Background

Last summer, we got some work done in our garden, involving levelling, building a retaining wall, and laying outdoor tiles and artificial grass.

We found our builder from MyBuilder and proceeded to agree details.

Transaction details

We agreed an amount of £10k.

In terms of documentation, the builder had a contract with a very vague basic scope of work. To ensure there was no grey area, I prepared an (probably overly detailed) contract that outlined very specifically the work required and the responsibilities of both us and the builder. This contract was signed + dated by the builder.

In addition, I was insistent on paying a small amount by credit card. The builder didn't originally accept card payments, but he got a credit card reader from his bank provider and I ended up paying a small amount by credit card.

Work undertaken

The work largely took place over the summer, throughout which I paid in installments. The agreement was 4 installments paid in advance, followed a small final amount after sign off by me.

Upon paying the final installment, the majority of the work was complete and there were small points left to do, as well as for me to complete my snagging check. This was at about October. From then, he started showing up less frequently, using the rain as an excuse - as one of the main points was to seal the outdoor paving. He would stay in touch and message to say he hasn't forgotten, and I would continue to chase.

I did a snag check around this time and there were one or two key points I noticed I wasn't happy with (grass wasn't down properly, drainage wasn't in place so water marks were staining the wall, small areas looked incomplete).

Current situation

I had given him the benefit of doubt over winter - but we've just had a week of good weather where I messaged him multiple times to come (he said he would come on one day) and he didn't.

Whilst he hasn't really attended over the last few months, this is the first time he's committed to a day and didn't come, and then responded to my messages. Therefore, the first time I've been concerned about whether he will fulfil the contract. Note that one of the contract terms was timely finish...!

I have a small amouny left to pay him, but considering the snags outstanding, I think the work required may be in excess of this - which is why I am now concerned.

Questions

I have the following questions:

1. Is a payment made by CC covered by Section 75?
   
   
2. I would consider my next step to be sending him a final note that states I require the work to be completed within 14 days with a list of all points outstanding. Is this the best next step?
   
   
3. Am I covered by my credit card if he does not respond in a timely manner or he does not rectify the issues? How does this work, do I put in a claim and get some independent quotes to complete/rectify the issues and ask my CC to cover? I'm reluctant to spend more money without knowing that I am covered.
   

Thanks all - appreciate your comments in advance. I wanted to clarify my position and confirm what the best thing to do next was at the very first point things are looking like they may not work out. I didn't want to go ahead and do something (e.g. get someone else to complete) and then realise that wasn't the best thing to do!

Happy to clarify any points or answer any questions that help explain the situation!

18cc

This might help...

https://www.moneysavingexpert.com/shopping/section75-protect-your-purchases/

Paying £1 by credit card means you are covered for the payments you have made - not for any additional surveys by someone else etc. Just for the money you have paid the builder. You need to claim from your CC company and see what happens.

born_again

Talk to your card provider and they will advise you on what information they will require.

I would think that you will need to get a 3rd party report. But do not do anything till you have spoken to card co.

hoth0416

Thanks both.

I think I'll give the builder one last chance by messaging again to see if/when he'll come.

However, at the same time I'll contact my card company to see what the next steps are and what information is required.

I'm hoping Barclaycard Anywhere isn't deemed a 3rd party payment processor like Paypal, given the underlying business account is also with Barclays

I'll update you on progress!

born_again

hoth0416 wrote: »

I'm hoping Barclaycard Anywhere isn't deemed a 3rd party payment processor like Paypal, given the underlying business account is also with Barclays

I'll update you on progress!

No they won't. All that it is, is a Barclays supplied device that allows you to take payments via a phone. Do not even mention that to your card provider.

hoth0416

Hi all
As an update I was able to contact the bank with full details on the issues + an independent report. 

They emailed me this morning to say they are reviewing the claim and have contacted the retailer to confirm their position.
I have had some frantic calls and messages from my builder this morning. I will call the builder back a little later to understand their position.

I just want to confirm where I stand with this - I'm not sure whether I feel comfortable with the original builder any more - but i can see from reviewing some ombudsman case outcomes that the original builder needs to be given the first opportunity to resolve it. I felt as though I had done that previously in trying to get them to sort the issue. 

I will update following my call with the builder - but would be good to hear your thoughts in the meantime.

Thanks

hoth0416

Hi all

I called the builder (he'd left two missed calls, a text, a whatsapp and a facebook message asking to call urgently...!). He noted that the bank had contacted him asking for £20k+ (the amount the independent report stated to rectify).

His view was that the contract was complete. He noted that he under quoted but said the issues I was facing was just because of the weather and backed up his work as being to a sufficient standard (I know this isn't right and the independent report supports that). When I challenged him he just came back with more defense on why he thought the work was fine. (As a side note, I think it's a slam dunk the work isn't fine, and am conformable any amount of independent reports would support that..)

However, his main concern was about his business and it was quite serious in him saying that he was worried and concerned that the business would fall under if the CC company pursued him for that sort of amount.

I'm at a bit of a crossroads now - as I don't want the failure of a business (and people's jobs!) on my conscience - particularly at a time like this. The reason I paid a small amount via CC was to avoid having to deal with the business itself and instead have the safety net of my CC. I understand that one could argue that a business that doesn't do it's job should go under etc.. - but in reality there is more to the situation and it has wider implications.

I appreciate that the process should work that the CC is the middle man and they would always go to the supplier - but the builder has called me and my concern now lies in three places:

• The builder clearly thinks the contract is fulfilled and there are no issues. Therefore he will not be willing do rectify anything. I don't see how the builder can rectify the issues in this case. 
• The builder will certainly not be willing to pay the £20k+ for someone else to rectify it.
• In the event he is pursued, the builder (and it's employees) all know it is me that have caused this and know where I live etc.. (of course there's nothing to suggest anything untoward - but the seriousness of the situation based on what he said means anything could happen.)

My response to him was that I have no intention of coming after the business - I just want the work complete to the standard it should be and therefore I was holding my CC company as liable as I could not resolve it with him (the builder). I said he should reply to the CC company honestly with his view. 

He asked me to monitor and asked that if he is 'backed into a corner', I consider dropping the whole thing.

One final nuance - the actual limited 'company' I entered into the contract with was dissolved whilst the work was ongoing (builder didn't send off some standard CH forms so dissolved via compulsory strike-off). I understand the builder is now operating as a sole trader. My contract was with the Limited Company and payments went to the limited company bank account.
 
I would really appreciate any advice on this! Few immediate questions:

1. Should I tell the CC company I've been contacted? I plan to - in the interest of being fully transparent!
2. Any advice on dealing with the CC to help get a positive outcome? I want to ensure i do everything properly and feel as though so far I have been!
3. Any way this can be sorted without the business going under?
4. Does the fact the limited company i entered into the contract with is now dissolved make a difference?

Thanks in advance

eskbanker

hoth0416 said:

One final nuance - the actual limited 'company' I entered into the contract with was dissolved whilst the work was ongoing (builder didn't send off some standard CH forms so dissolved via compulsory strike-off). I understand the builder is now operating as a sole trader. My contract was with the Limited Company and payments went to the limited company bank account.

I'm no lawyer but I think this does make a significant difference - for one thing I don't think that the bank can pursue the builder personally for charges incurred by a defunct limited company, or at least not without going via the courts rather than routine s75 processes.  Likewise, since the company was liquidated you no longer had a valid contract - did you and/or the builder make any attempt to novate the contract over to the new sole trader business, transferring rights and obligations?

As an aside, it boggles my mind that relatively minor snagging on a £10K job is estimated at £20K, how credible are either of those figures?

MEM62

You would be well served by giving him the opportunity to bring the work up to the specification stated in the contract.  (Why not show him the independent report you had commissioned)  However, if he is insistent that the work is complete and of a satisfactory quality you cannot take the matter any further with him.  In that case you have two choices - continue with your current action or drop the case.  Unless you feel that you are not being reasonable, the future of his business is not your responsibility.      

hoth0416

Thanks for the responses! Responding to each point in turn:

eskbanker said:

I'm no lawyer but I think this does make a significant difference - for one thing I don't think that the bank can pursue the builder personally for charges incurred by a defunct limited company, or at least not without going via the courts rather than routine s75 processes.  

Does this mean that if the company was still intact the CC company could have 'gone after' the builder? What does that mean now - that the CC co can't go after the builder?

eskbanker said:
Likewise, since the company was liquidated you no longer had a valid contract - did you and/or the builder make any attempt to novate the contract over to the new sole trader business, transferring rights and obligations?

I didn't know the company had dissolved until the builder told me this morning and I checked on Companies House! 

I would suppose from my point of view - I would still be protected via my CC?

eskbanker said:

As an aside, it boggles my mind that relatively minor snagging on a £10K job is estimated at £20K, how credible are either of those figures?

Sorry - I should have been clearer here - following the independent report there were some more significant issues unearthed. And one of the snags I noted actually was a result of the groundwork not being properly prepared which meant it was more significant than just a 'snag'. Therefore, most of the old work needs to be taken out and re-done properly. Therefore, when you account for that, plus the fact the original builder likely under quoted, it comes out as not totally unreasonable (though agree it is high!).

MEM62 said:

You would be well served by giving him the opportunity to bring the work up to the specification stated in the contract.  (Why not show him the independent report you had commissioned)  However, if he is insistent that the work is complete and of a satisfactory quality you cannot take the matter any further with him.  In that case you have two choices - continue with your current action or drop the case.  Unless you feel that you are not being reasonable, the future of his business is not your responsibility.      

Appreciate what you're saying. But in his view (after I described the independent report in detail) - he can't see what he would do differently. Appreciate that's the difficult decision I have to make. I suppose it's easier to swallow when you see it's the bank that is covering you as opposed to an actual local business.
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 In terms of my questions - I think this is where i am now:

1. Should I tell the CC company I've been contacted? 

I think I should inform them to ensure I am absolutely transparent.

2. Any advice on dealing with the CC to help get a positive outcome? I want to ensure i do everything properly and feel as though so far I have been!

Any comments would be appreciated

3. Any way this can be sorted without the business going under?

Based on the above, it seems as though the CC company may struggle to recover this from the business in any case as it's now dissolved (see 4 below). However, I need to make a call on whether to proceed or to stop as ultimately it's my call on whether I want it resolved.

4. Does the fact the limited company i entered into the contract with is now dissolved make a difference?

Possibly, it may make it harder for the CC company to recover the amount from the business.

Out of interest - does anyone know if the CC company have any legal basis to try to reclaim any amounts from the builder (as that would not really make the CC company 'jointly and severally liable') ? 

born_again

1. Yes.
2. Tell the CC what  the builder said.
3. Do you want it sorted out? If the original co is dissolved, then they are already gone.
4. No

It would be highly usual for a CC to reclaim the funds. Not worth the court costs. Although the will use that as a stick to get results.

jointly and severally liable with the retailer. So they share the debt. In reality. Card provider should not be losing out for someone elses fault.  Remember that lost funds have to come from somewhere.