Builder threatening legal action

[Beagle4321]

Hi,

Thanks in advance for any help people can give.

We had some building work undertaken and were paying fortnightly against an estimated cost of £15.5k The builder said that is how they preferred to work as costs for materials were going up and down.

As the billing approached the estimate, we raised concerns as we had only budgeted for that amount.

The builder said that he still needed to bill for electric and plumbing work and presented us with a bill for another £7k.

We have refused to pay this as it's a massive increase on the initial estimate.

The builder said his estimate is null and void as soon as he started work as the scope of the work changed daily. This is not true. He asked us questions each day about the work we wanted done and we stated that we would do what was best for the job to remain in budget.

He is now threatening court action.

We have received a letter froma company called Silverbacklaw stating that we have 30 days to pay the amount with interest at 8% added from the date of the invoice otherwise we may be taken to court.

The letter includes a reply form with options to pay the full debt, pay some of the debt, don't know, or dispute the debt.

Is this a Letter Before Claim? Should we respond as directed by Silverback law with evidence disputing the claim?

[Pezza54]

An estimate of cost is only an estimate. It is not the same as a quotation which is a fixed price for specified building work.
Did the builder specify the work he had allowed for in his estimate and if he did, did you get this in writing?
You say you made it clear that you wanted to keep the job within budget of £15k. The builder did not warn you that the job was going significantly over budget until work was almost finished. The builder should have warned you.
The letter you have received sounds like a LBA and you should not ignore it.
If you dispute the builder's final account and end up going to court the judge may decide to appoint an expert (building surveyor) to work out a reasonable cost for the work.
My advice is to try to negotiate with the builder and avoid the risk of going to court.
Is there a reason why you didn't get a quotation from the builder?

[Beagle4321]

Thanks for the reply. I'll respond to your points in turn

1.Did the builder specify the work he had allowed for in his estimate and if he did, did you get this in writing?

Yes, he provided a breakdown of the work with materials and labour against each item in writing. The work completed was aligned to some of this, but we also reduces the scope of some items such as not requiring decorating and providing our own flooring so he said that the cost will be lower than the estimate.

2.You say you made it clear that you wanted to keep the job within budget of £15k. The builder did not warn you that the job was going significantly over budget until work was almost finished. The builder should have warned you.

Yes we said that was our budget and all along each time he said he had to do more work or that the scope was changing because building control asked him to make changes, he said that it would not affect the estimate as that was a worst case scenario so he had estimated on the high side. He did not mention any significant increase in cost.

I raised concerns in email when we were approaching our budget, but this was ignored. He said that often people just run out of money before a job is complete. Is it a legal requirement to warn the customer about a significant increase in cost?

3.The letter you have received sounds like a LBA and you should not ignore it.

I spoke to Citizens Advice and they said that it sounded like further threatening tactics to provoke payment and that the response form is not the same as one that a court would send, so not to reply with a specific option, but to acknowledge it and provide the reasons why we dispute it. This is something we have already sent to the builder and a debt collector he employed.

4. If you dispute the builder's final account and end up going to court the judge may decide to appoint an expert (building surveyor) to work out a reasonable cost for the work.

We expected this might be the case and have offered to do this as a resolution. We have also offered what we believe is a reasonable amount for the work as since he left site, we have uncovered problems with the work that have had to be overcome by other contractors. We don't want him to complete the work as he threatened us and deliberately blocked our only exit to the house with his equipment for half a day whilst he was removing it from site.

5. My advice is to try to negotiate with the builder and avoid the risk of going to court.

We are trying to do this, but he is not replying to emails so it seems like he wants to take this to court.

6.Is there a reason why you didn't get a quotation from the builder?

We wanted the work to be completed before we moved into the house and he said that it would take 3 weeks to provide a quote and that would impact on the time as He said he had people ready and waiting to start work. This is why we agreed to an estimate.

As it turned out this was not the case and he was delayed by 6 weeks as he was working on another job meaning the work didn't start until we moved.

[Pezza54]

If you haven't already received a final account ask the builder to provide one that shows individual items of work with labour, materials and profit priced for each item.
Check the final account for variations and make sure the omitted work (decorations and material cost of flooring) have not been included.
Where an item in the estimate is identical to the item in the final account check to see if the material and labour costs are the same. If they aren't query this with the builder.
Out of interest, is there a big difference between the estimate and final account for the electrical and plumbing work? If there is can you justify this by additional work? If the builder tried to estimate this specialist work without obtaining a price from an electrician or plumber he may have under estimated.
Total up the cost of the work carried out by other builders to make good the original builder's work. Take photos of this work and let the builder know the total cost if you haven't already done so.
There is no legal requirement for the builder to let you know the cost of the work is going over budget. You said the builder told you "the scope of the work changed daily" and that his estimate should be disregarded. This is a possibility if the work in his estimate changed substantially. If this is the case a judge would ask an expert to work out a reasonable cost of the job which could be more or less than the £22k the builder is asking for.
Despite the fact the builder is now not replying to your emails you should still write to the building asking for info and requesting adjudication.

[Beagle4321]

Thanks for your response. And apologies for the slow reply. Details as follows.

If you haven't already received a final account ask the builder to provide one that shows individual items of work with labour, materials and profit priced for each item. Check the final account for variations and make sure the omitted work (decorations and material cost of flooring) have not been included.
Where an item in the estimate is identical to the item in the final account check to see if the material and labour costs are the same. If they aren't query this with the builder.

- We have invoices for the work that has been done with materials, labour and profit. I can't see for sure if committed work has not been included as it's difficult to relate the costs back to the estimate.


Where an item in the estimate is identical to the item in the final account check to see if the material and labour costs are the same. If they aren't query this with the builder.

- Nothing worded in the estimate is similarly worded in the invoices. I have asked for a breakdown of costs as they relate to the estimate, but the builder said that the estimate was null and void as soon as we agreed to the work being carried out so he has not supplied this. He has however talked about additional unforeseen costs via email when I questioned his invoice, but again it's unclear how the additional costs relate to the cost of the work that's been carried out as the wording is different to the estimate.


Out of interest, is there a big difference between the estimate and final account for the electrical and plumbing work? If there is can you justify this by additional work? If the builder tried to estimate this specialist work without obtaining a price from an electrician or plumber he may have under estimated.

- again it's unclear. Plumbing and electric are not itemised on the estimate. I have an email saying that plumbing is included, but electric is not. I assumed plumbing was included in the cost of the kitchen fit, which was estimated at £2, but the Plumbing work invoiced was for £2.5k and electric for £700. It has since cost a further £600 for plumbing and electric respectively.

I will write to the builder again with current costs and quotes and ask again for a final account that details the jobs carried iut and the cost. I don't mind paying a reasonable amount for work carried out, I just can't see from the current paperwork where the cost is justified and I'm disappointed that cost increases weren't raised with us until after the fact.

[Pezza54]

Please check your figures. In your first post you said the builder's invoice for plumbing and electrics was £7k. Your last posts states you have been billed a total of £3.8k
A new kitchen fit-out is probably one of the worst jobs you can ask for an estimate as opposed to a quote. Kitchen fittings can vary significantly in price. My neighbour recently paid £25k for a kitchen fit excluding builders work, but it was a big kitchen. Also, a kitchen is a room where the customer is most likely to change their mind about fittings, tiling, position of appliances etc as work is going on.

[Pezza54]

I have just noticed you didn't mention the cost of other tradesmen you had to employ to make good the original builders work.
Don't forget this. You should use this figure when you negotiate to try to reduce his price.

[Beagle4321]

Please check your figures. In your first post you said the builder's invoice for plumbing and electrics was £7k. Your last posts states you have been billed a total of £3.8k

- sorry. I should have been clearer here. The estimate was 15.5k, we have already been invoiced for and paid 15k, the current invoice is for £7k of which plumbing and electric makes up £3200. Plumbing and electric is not mentioned as an item on the estimate, but I have an email saying "plumbing is included, electric is not". It has so far cost ~4k to finish the work and I expect that will be more like 6k as we have a floor to put in and some outstanding roof work, which would take our total to around £28.5k. Apologies if my maths is out, but It's substantialy more than what was estimated and I have nothing in writing to indicate why that would be the case.

I've asked for the breakdown, but the builder is saying he's answered all our questions and is not prepared to go over it again and is threatening legal action.

Today I had an email from the previous debt collector that had been in touch saying the above and saying that Silverback law are their solicitors and that they are still intending to pursue legal action.

[Pezza54]

The next correspondence you receive could be from the court. The solicitor has given you 30 days to reply to his LBA.
You have to make a quick decision. On the information you have provided I feel your defence will be weak.
The main disagreement appears to be the builder saying you changed your mind about the building work every day and you denying this.
It would be a time consuming exercise to compare the estimate with the actual work carried out as it would require a visit to your property.
That is why in court the judge is likely request an expert report to determine a reasonable cost.
You are taking a big risk if you decide to contest the claim, but in the end it is your decision.

[Beagle4321]

We have come to a reasonable settlement that will avoid court. The debt collection agency has made an offer on behalf of the builder as a "full and final settlement" which we are prepared to accept. We have had further serious problems with the work, but at this stage do not intend to pursue them for compensation, so we are proposing that some of the amount is paid under protest as we are still uncovering sub standard work.

The letter is titled "Without prejudice". Does this mean that if the builder tried to pursue us for more then they could as the court would not acknowledge our agreement?

What should we do to ensure this is truly the end of the matter, but allow us to make a claim against the builder if there are more issues

[Pezza54]

The offer of settlement was made to you "Without Prejudice" in case you decided not to accept their offer and tried to use this letter as an admission of guilt in court.
If you are prepared to accept their offer, you should reply confirming your agreement to the offer and state the date when you will make payment by. To prevent the builder presenting your letter as an admission of a valid claim in court, you should also mark it "Without Prejudice"
This does mean that there is a possibility of future court claims by either the builder or yourself.
The end of the matter will be reached at the end of the 6 year limitation period.
It does sound that it is more likely you that will instigate a future claim-"make a claim against the builder if there are more issues"

[Beagle4321]

Thanks. We have replied "without prejudice" and discussed a payment plan and stated that we will part pay under protest, reserving our right to pursue a claim about the quality of work in future.

This has been accepted and we are awaiting a new invoice