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403 posts

Ultimate Geek


#268321 12-Mar-2020 13:30
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Hi everyone,

 

just looking for an opinion from outside the problem, how do you regard the following situation and more importantly - what can I legally do?

 

- builder was engaged for a project on a labour only contract, I provide all materials and consumables.

 

- we agreed on the total value of the labour and that it will be paid in 12 payments

 

- work started roughly mid Oct 2019

 

- when framing was up (not even paper installed, or windows) - he sent me the invoice for the 10 year warranty. I told him it is way to early for the warranty and I refused to pay that, he never brought that one back up.

 

- I have made the first 11 payments with a weekly frequency even if work progressed much slower than payments.

 

- I have raised concerns about this but I was told "just keep paying, do not worry, we will complete the job"

 

- basically as it stands, I paid more than 90% of the agreed sum (actually 11 out of 12 is approx 91.7%).

 

- I have made it very clear to the builder since January that the last payment will not be made until completion and that I regard this demand as request for payment in advance, which I will not accept.

 

- At a certain point he stopped showing up for work with no warning whatsoever, I left the house unlocked first day as I went to work before the time he usually shows up.

 

- in the fourth day he texted me "have you paid your outstanding invoice"? He refers to the 12th payment, which would be the last contractual payment.

 

- I would say there is at least 2 weeks of work for them on site, small deck, verandah to build, install stairs, finish a retaining wall, landscape steps, install all internal doors, skirtings and architraves (it is a 2-storey house extension).

 

- they did not follow the instructions on the drawings for some fixings and Council picked it up and wants those fixings installed, now it is too late to install what is on the drawing as cladding is up and those fixings require access from outside (if you know about building - 2x wire dogs between top plate and studs are required), one alternative requires far more expensive fixings (Studlok screws), the lower cost option advised by Builder is based on nail plates (Pryda SN50L) which will be fixed from the inside only and in my view might interfere with gib fixing and stopping, builder said they will not pay for the more expensive fixings but wants to use them (so they expect me to pay for their mistake) and that they will not do any routing for the nail plates, "it is what it is" they said...

 

- they also did another mistake picked up by the structural engineer and he asked that fixed too and I got charged for his time to investigate what they did, analyze photos, write report, etc.

 

- cladding stops 50mm above the underside of the structure instead of going down past that by some distance as per the drawings. Amazingly enough, they passed the cladding inspection but I will surely fail the final as someone will definitely pick that up. The issue is that they will be long gone by the time I reach final inspection (which I need to have before Oct 2020, that is 1 year after I started work)

 

- their general level of workmanship is extremely low and does not give me any confidence they know what they are doing or that they are able to fix these things at a decent level. Distance between deck piles is 1500 instead of 1800 as per the drawings and consequently now there is 300mm gap at the end towards a concreted area, gap which I need to fill somehow, otherwise I do not believe anyone will pass that during the final inspection... Some deck joists are 5mm higher than the adjacent joist but they do not install the decking (that is excluded), which means the deck installation will also have to include leveling the joists - which is not general expectation for the decking installer.

 

Basically he is blackmailing me to my face to make payment in advance otherwise he does not resume work. I find this behavior extremely unprofessional but amazingly enough is not the first time, the draughtsman did the same thing, asked for all money giving me the same reassurances and then stopped work and basically asked for nearly the same amount again otherwise will not do or issue anything, and it was pretty much at the same stage, 90% completion of his work, we were ready to lodge for building consent. It looks like this is what the kiwi tradespeople are trained to do when they get these so precious licenses they waive around, get all the money before finish and then blackmail client for more money to get work completed.

 

It looks to me that he is in the wrong but all laws and rules are written to protect the businesses, there is nothing protecting the tax payer... even if lots of organizations claim to do exactly that.

 

 

 

Thank you.

 

 

 

 


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  #2436850 12-Mar-2020 14:26
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If he hasn't built what's on the drawings then he has not fulfilled his end of the contract. Having said that, our annual refresher courses on various things - such as contracts - do mention that noncompliance of the other party does not entitle you to noncompliance yourself. Unless the contract said you would withhold the final payment until XYZ had occurred - such as council sign off of the construction - then you are likely still technically obliged to pay. If the total cost is under the Small Claims amount then that's probably a good route to go down. It's cheap to lodge a claim and if the work is as bad as you say it will be trivial to collect evidence to show it. Small Claims judgements are as enforceable as any other, so if you win he will have to fix it.





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These comments are my own and do not represent the opinions of 2degrees.


k14

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Ultimate Geek


  #2436885 12-Mar-2020 14:54
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First question, how did you engage him? What form of contract was signed? What were the terms of payment?

 

Do not pay any more money until you have clarity over when he will complete the job. As much as you will hate to hear this but you may have to cut your losses and start at looking for another builder to get it finished.


 
 
 
 


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  #2436958 12-Mar-2020 15:29
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Now you are not going to like this answer, and its clear that the relationship between you and the builder is near breaking ...

 

But you have pretty much 2 options,

 

1) Suck it up, smooth things over pay the final instalment and hope they finish the job...

 

2) Don't pay and then try to get them to complete the job on agreement that they will get paid at the end (hint: this is highly unlikely )

 

3) Don't pay , and walk away, find someone else to complete the job

 

What does your contract say about variations/additional hours, failure to perform?.. but to be honest the cost to enforce the contract (dispute or civil court) is likely to take more time/money/energy than the disputed sum..

 

 

 

 

 

 

 

 

 

 




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Ultimate Geek


  #2436975 12-Mar-2020 15:38
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thank you, for providing some encouragement that it is not somehow my fault...

 

There is a Contract, which is a standard contract he brought. It is titled "Fixed Price+ (Labour Only) Building Contract" right on top of the first page. It is a 25-page document which appears downloaded from somewhere, so it must have been a standard form put together by some professional body.

 

due date for progress claims was agreed 5 days.

 

Due date for final pay was agreed 10 days.

 

Amount on last invoice is $5951 incl GST.

 

The main dispute is that he sent the invoice for the final pay way too early, when the work was far from complete, and because it was not paid it shows as outstanding in his system and he acts based on that. But surely there must be some common sense that final pay HAS TO to be in relation to the work being completed (the claim for such pay should be sent only when work is complete).

 

also, the contract does not even clarify that the payments needed to be weekly, it just shows week 1, week 2, etc, without fixing these payments to a certain date or progress on site (milestones). The contract sum was arbitrarily split between an equal number of payments and I got invoiced for that amount periodically. Some weeks he only worked 2 days or 3 (public holidays) but invoice was the same.

 

He just sent me invoices and I got his money weekly but I could have stopped payments much earlier and still be within my Contract, as there are no dates set for the payments. Just the due date relative to an invoice. Here is what the contract shows, just "week 1", "week 2", etc... no other time frame apart from the date when he issues an invoice, which for the last one I would say he does not apply common sense, and that created the whole mess...

 

 

 


k14

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Ultimate Geek


  #2436993 12-Mar-2020 16:03
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Tell him you will pay him in daily for the remaining days of work? Totally unreasonable to expect you to pay in advance and certainly don't pay anything more until you get some clear assurances that it will be completed.


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  #2437001 12-Mar-2020 16:14
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What building contract are you using, and are they a certified builder, or a member of any of those organisations? If so have you contacted them about this?




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Ultimate Geek


  #2437012 12-Mar-2020 16:24
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he is LBP, and their website shows this - do you think NZCB would have any interest or any power in this matter?

 

Or a fairly quick response / action?

 

 

 

 

 

 

 

 

 

 

 

 

 


 
 
 
 


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  #2437017 12-Mar-2020 16:27
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aucklander:

 

he is LBP, and their website shows this - do you think NZCB would have any interest or any power in this matter?

 

Or a fairly quick response / action?

 

 

Maybe, have you paid for their insurance yet?




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Ultimate Geek


  #2437020 12-Mar-2020 16:31
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and here is the cladding terminated above the underside of the framing!!

 

(just so you understand that I am not totally oblivious to these details and requirements).

 

This passed the cladding inspection, so I have no way to ask him to fix it until I fail the final inspection, which is few months away. There might be water damage to that structure (old particle board floor 40 yrs old), as the rainy season starts... This area was only a re-clad. I showed it to them and they started to explain to me how hard it is now to add another board... as the cavity closer is already installed... etc... like that helps me somehow to get a completed work which looks decent.

 

 

 




403 posts

Ultimate Geek


  #2437023 12-Mar-2020 16:33
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wellygary:

 

aucklander:

 

he is LBP, and their website shows this - do you think NZCB would have any interest or any power in this matter?

 

Or a fairly quick response / action?

 

 

Maybe, have you paid for their insurance yet?

 

 

 

 

No, the insurance was quoted separately (it is called HALO guarantee?) and it was not paid yet as the invoice was sent when only the structure was up, in my view it was way too early to "buy" any sort of warranty.


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  #2437028 12-Mar-2020 16:40
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Well, we're having renovations done at the moment (and by 'renovations' I mean demolition down to sub-floor joists and rebuild on top plus extension). I paid for Builder's Risk Insurance up front out of pocket, and the Master Builder's Guarantee is included in the price, and I think that part has already been invoiced. Incidentally, if you want an amazingly good builder to fix it, let me know and I'll PM your our builder's details.

 

 

 

 





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These comments are my own and do not represent the opinions of 2degrees.


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  #2437033 12-Mar-2020 16:46
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Don't pay anything and see a lawyer. There is a fairly reasonable chance of a nice letter from a lawyer, complete with counter claims will get him back to work.

Your builder is likely in breach of the Construction Contracts Act but you need advice on this.



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Ultimate Geek


  #2437045 12-Mar-2020 17:09
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Handle9: Don't pay anything and see a lawyer. There is a fairly reasonable chance of a nice letter from a lawyer, complete with counter claims will get him back to work.

Your builder is likely in breach of the Construction Contracts Act but you need advice on this.

 

 

 

Lawyer will charge at least $2000 - $2500 to become familiar with the case and write the letter. I guess these costs might not be recoverable.

 

If we get to court somehow, then I can claim expenses in preparing the case and the party found at fault then is asked to pay these costs to the other party. (the lawyer, time off work, etc). Unfortunately stress and frustration, along with uncertainty and the risk arising from dragging the project for longer than needed is not quantifiable and nobody cares about that (house insurance, building works insurance, float rate for the construction loan, etc).


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  #2437051 12-Mar-2020 17:14
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This isn't going to get fixed for free. Construction disputes are common and the CCA has specific provisions that can help you but it needs some work to do this.

An initial claim letter from a lawyer is likely to be around $500-800, it's really up to you whether you want the work finished in a satisfactory manner or you want this to drag on.


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  #2437053 12-Mar-2020 17:17
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Oh you should also request the builders address for service and advise him you are off to see your lawyer about what can be counter claimed due to his delays. Do it politely but make it clear you are seeking advice and you will vigorously pursue your right to counter claim on him.

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