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Avoiding rogue traders

The key reason for government schemes and the formation of trade associations, such as the National Builders Association, has been to help consumers avoid the risks of inadvertently appointing a “rogue trader”.

Rogue traders may sometimes appear unannounced at your home suggesting that you need your roof looking at, that they spotted cracking on some brickwork or that your chimney is in dire need of re-pointing. Normally, these “builders” will try to identify an area that is difficult for you to see clearly for yourself and present a frightening anecdote of what may happen if you do not take on their building services. In the case of these cold callers the best advice is often to tell them you do not buy services at the door and that you want to get opinions and prices from a range of building companies.

Ensure that builders are happy to communicate in writing. Verbal instructions can be difficult to prove but written conversations provide security and clarity to consumers and builders. Whilst you may not be sending letters to your builder they should be happy to provide you with their address. Any building company not willing to divulge this type of information should be approached with caution. Similarly, avoid any builder that is unable to provide a range of references.

Although not mandatory, builders may be able to show that they are part of the Government-endorsed TrustMark scheme, a quality mark for builders and other repair, maintenance and improvement professionals who are vetted (part of trade associations). Not all trade associations require their builders to be part of this scheme but regardless, a builder who is will display an additional level of professionalism. In either case, at all times you should double check that each builder you shortlist has current and sufficient liability insurance, adequate experience for the scope of your project and is willing to work under a contract with clear payment terms. Any reputable builder will be happy to (and often suggest) working under a contract which protects everyone’s interests and you should be wary of any builder that is unwilling to work under even a basic building contract.

Perhaps the most important rule is when it comes to payment. Never pay the full amount of money in advance of completion of the work, even if you are told the money is required for materials. Instalments are a welcome compromise as some trades and building companies will require a steady flow of income in order to cover business payments to suppliers and sub-contractors. Finally, be wary when a builder asks to be paid only in cash as you have very little protection against loss. Instead consider bank transfers or credit card payments as these offer security, protection and a way to identify who and where money has gone to.

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What builders need in order to give you a quote

Information. That really is it. One of the first questions many people ask when embarking on a building project is how much it will cost. But if you simply ask “how much for a rear house extension” you will not get an accurate answer. Costs can vary according to location, site conditions, access, availability of materials, size of project, approvals required, legal issues, finishes, design details and many more besides. If your builder is not made aware of these variables, how can they be expected to put a price against them?
Without sufficient information a builder will only ever be able to provide an estimate of costs. If you receive a quote from a builder based on loose or incomplete information then any additional works will be subject to additional quotes and therefore additional construction costs to you. An example may be where a builder installs surface mounted fluorescent lights but, when you see them, you announce you expected recessed LED fittings. The builder will inform you that the original quote did not allow for those more expensive fittings (which will be difficult to disprove without a full cost break down) and the result is that you will be responsible for covering the additional cost for the fittings, to get an electrician back to re-wire the circuits to be LED suitable and any re-stocking charges for the fluorescent fittings as well. There may also be further costs such as re-plastering as a result of the change.

In many cases building additions costing many thousands of pounds can be avoided by carefully worded lines of specification and a set of detailed plans.

The best way of avoiding these kinds of additions is by appointing an architect or designer. These professionals will cost you, but their known fees will save you when compared against the potential unknown construction cost additions! These professionals will be able to prepare a full range of drawings, details and schedules to inform builders of all your requirements and specifications. Importantly, you will get a direct say on what you want and can be confident that this will be communicated to builders. Changing, omitting or adding items is much easier and more cost effective whilst still on the drawing board! In commercial building projects, professional builders will often not work without a full range of detailed drawings and schedules. They will illustrate every conceivable element from the position and quantity of electrical sockets to how many layers of lacquer are required for a reception desk.

In larger building projects it would be wise to invest in a quantity surveyor who can list out in exacting detail the materials required so that the building companies can provide firm prices and fast and timely ordering of supplies. However, even the smallest home extension will benefit from a full set of clear plans and elevations which detail important elements from the size of the extension to the type of bricks the builder should use.
The more information that can be provided to a builder, the clearer the two of you will be about what is expected and the more likely your project is to be successful.

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Understanding Value for Money

The first rule to understanding Value for Money is that it doesn’t mean getting the cheapest quote.

You must ensure that you are able to get a range of comparable building quotes, even if you have a favoured builder. This will give you building quotes which you can assess to make sure that you are not being charged too much, or too little. You may think that being charged too little is no bad thing, but it may be a sign that a builder has missed, or not included something important. Contractually speaking a builder may have the right to claim costs for an item that was obviously misquoted (something that many clients will not realise nor accept). However, a builder that realises too late that he stands to lose too much may end up trying to claw back some of the losses, which will usually result in either a longer project or a lower quality of finish.

When comparing quotes you will need to weigh up a range of project specific variables such as the construction period, the finish or choice of certain materials and any other additions (such as a dedicated Building Site Manager) or exclusions (such as travel and parking permits).

The trick is then working out exactly which builder gives you the most for their price. A full breakdown of building costs can help to clarify items and let you get a better understanding of what a builder will be providing. As an example, a builder’s quote may state that “tiles” are included but the cost of tiles can vary by hundreds of pounds per square metre! Do you know what you will get? Many builders will quote a “provisional” figure, which is an amount set aside as an allowance. If you want more expensive tiles then you will need to top up this figure. With this in mind you will want to make sure that any provisional sums can meet your expectation for finishes. The ideal situation is to have already picked all of the finishes, so that a builder can source and price for exactly what you want.
As an example let’s take a hypothetical home extension project with three builders’ quotes:

Builder 1: quotes a price of £28,000; 20 weeks construction and excludes parking costs.
Builder 2: quotes a price of £30,000; 16 weeks construction but does excludes finishes and rubbish clearance.
Builder 3: quotes a price of £35,000; 12 weeks construction, and excludes parking costs. They ensure that tradespeople used are registered on relevant trade schemes, offer compensation for overrunning work and list a range of provisional figures for finishes. They also include rubbish clearance.

Although Builder 3 offers the most expensive quote, they provide the shortest construction period and the most cost certainty as well as greater assurances and additions. It is likely they actually represent the best value for money even though they have the highest quote.

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Do you have a builder’s estimate or a building quote?

A building estimate;

An estimate is what a builder thinks the work will cost based on past experience and a short assessment of the particular variables likely to affect your project. An estimate may be based on an approximate building cost per square metre but the best estimates will be based off of tangible information such as a set of planning drawings. Whilst a building company would not be able to accurately price or build from these, they would be sufficient to work out a likely budget range. An estimate is not a firm offer to provide building services at a set price but it is a realistic guess and can be useful for getting a rough idea of construction costs.

Building estimates may come verbally or in writing but are not legally binding and are open to change.

A building quote;

A building quote is an offer to carry out a project at a certain price. If you accept a quote then the builder cannot charge you more for any services included in it. A builder should provide all quotes in writing and if it is not clear what is included (and what is not) then you should ask the building company to clarify the quote and provide a cost breakdown. However, if any new information or requirements are introduced during the build then the builder will normally have a right to provide additional quotes to carry out the additional work.

A builder who is happy to supply a fixed quote based on minimal information will be looking forward to profiting from changes and additions that they know will need to be clarified later.

Getting your quotes;

Architects and designers will often suggest that you “Competitively Tender” your project. This is basically a process whereby the full range of drawings and details are submitted to a number of building companies. Those building companies should be made aware that they are being assessed competitively against other builders but should not be made aware of whom the other builders are, so that there is no chance figures can be manipulated. Because they are all given the exact same information you should be confident that the quotes you get back can be easily compared and should reflect a realistic cost for a builder to complete your project.

It is usually recommended to obtain quotes from at least three builders.

Builders will form quotes by passing details on to any sub-contractors and suppliers and often involves the builder finding the most appropriate and cost effective tradesmen for your project. This can be a time consuming process but it’s worth being patient for an accurate and competitive quote.