Reasonable Costs For Works
The Builder Now Says It Will Cost More? They Have Charged More Than You Expected. What Can I Do?
You are required to pay only a reasonable price for the service that a builder provides unless the price of the service is fixed as part of the contract.
Check The Wording Of Your Contract!
The standard forms contracts for building work tends to be on the basis of a fixed price for a fixed amount of work. The work included is defined in the plans, specification and price breakdown for the project. During the project if the builder says extra work will be required this should be considered alongside the specification and plan documents. Additionally, the contract should also contain a mechanism by which the price for genuine extra work is valued.
Having an agreement to pay money at certain agreed stages can act as a useful reminder as it will give both parties the chance to review the work undertaken and approve this before moving on to the next stage. Ensure the contract sets out how and when you will pay.
Top Tip: Beware of the builders that request cash in hand. The Money Laundering Regulation applies to anyone paying over c£8k in cash in linked payments for goods or services. Even if your project is £10k (including VAT) and you pay this by cash in 5 separate payments of £2k, unless your builder is registered as a high Value Dealer this maybe an offence.
Top Tip: Try to avoid paying deposits or upfront payments and for smaller projects if the builder says they need to buy materials (Only pay on delivery of materials to your address), try offering to buy this yourself (this does not work for fixed price).
In larger projects this is not always feasible and in these cases you can protect your deposit or staged payments until the work’s complete by using a deposit protection scheme. In this case your money will be stored in a secure account until you and the builder are happy with the work. You could also consider an insurance-backed warranty or guarantee. Some contractors will sell these to cover the cost of finishing or fixing work if they do a bad job or go out of business.
If you agreed a price with the builder but you’ve been charged more, your rights depend on whether you were given a quotation or an estimate.
Be aware that a quotation or a fixed estimate is a promise to do work at an agreed price. An estimate is the builder’s best guess as to how much the work will cost.
The Builder Can’t Charge More Than They’ve Quoted, Unless There’s A Good Reason – Like:
- They let you know they’d need to do extra work, and you agreed to pay more because of it.
- It was obvious that the price in the quote was a mistake.
They can’t charge you more if their costs have gone up since they did the quote.
If you were given an estimate and the final bill is a lot more than what you were expecting, you can dispute it. The final price should be ‘reasonable’. You should consider the estimate you agreed to, any changes, and why they happened. You will need to check anything that happened that was beyond the control of the builder, like bad weather or the cost of materials increasing.
Top Tip: You could ask another builder for an estimate for the same work or seek an expert opinion. Let the builder know that you’re unhappy with the price and make it clear what you think would be reasonable to pay to the builder which should be done in writing.
Altion Law are specialists at advising and representing parties in a Contractual Dispute relating to a Construction Project. If you would like to have a confidential discussion with a member of our team, please complete our Contact Us Form, and we will call you back at a time that is suitable for you or you can contact us directly on 01908 414990.