Builders & Advance Payments
Unfortunately it sound perfectly reasonable that a builder should want an initial payment for materials before he starts. The trouble is that again and again we get involved because the builder never starts!! By the time we get involved it is often too late. It is difficult to tell the creditor that he has been duped. The builder ran out of money and is using my client’s money for the materials and wages to complete the previous job.
So easy to be wise after the event. He should have taken up references. If he is going to part with money then at the least he should have the builder’s home address and a guaranteed start date. The very wary will want to pay the supplier direct where this is practicable.
Payments in advance can be a separate cause of action. Where the builder has not started the breach of contract can be termed a failure of consideration.
There are other considerations, of course, where the builder starts and won’t finish. Sometime's that is accompanied by the insolvency of the builder’s company. Insolvency statistics vary from year to year but the trades that regularly top the list of companies in liquidation are contractors and builders.
It is sad how many clients think that because the builder himself is well off and drives a this-year’s Land Rover their money is safe. They simply do not appreciate that their contract is with the company. The company is liable and the directors (generally) are not.
The directors are not liable for breach of contract. BUT. There is a huge saving provision. Everyone seems to forget the Defective Premises Act 1972. Never mind if the contract is with a limited company, if a) the work relates to a dwelling and if b) it is carried out negligently ANYONE who carried out such work is personally liable,. That includes architects, surveyors, the roofer and if the builder supervised the work then that is exactly what the creditor wants – the builder is personally liable. Which brings us back to the beginning. Does the creditor know where to find him? He should have got the builders home address.
LMWise FCA
Barrister-at-Law
Leslie Wise has regularly written articles for the Solicitors' Journal, Solicitors' Gazette and Accountancy. His wide practical experience informs Debt Collecting London’s total approach to your debts and helps ensure a quick result.