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If you’re reading this, you’re probably experiencing, or have experienced, delayed building works and increased costs. Not an uncommon occurrence when it comes to construction.
Hiring contractors to carry out a project can feel like a daunting task. You are essentially putting your trust in someone you don’t know and handing over a large amount of money. That, along with the multitude of stories about ‘cowboy’ builders plastered across social media, and you might find yourself panicking when the plan starts changing.
It’s right to be proactive when you hear about a delay. But you need to consider the terms set out in your construction contract before starting a dispute with the contractor.
Many non-commercial clients are unaware of their rights in these situations and seek advice months after agreeing on the building work delay and increased cost. In many cases, these disputes lead to a complete breakdown in the relationship with the contractor.
In this blog, I discuss basic legal principles regarding your rights in these situations, often called prolongation cost claims. These are time-related claims resulting from a construction delay that is out of the hands of the contractor.
Looking to cut to the chase? If you’re looking for a solicitor to help you resolve your construction dispute, just call us on 0203 007 5500, or submit a contact form.
Client, customer, employer, contractor...
The contractor is the person undertaking the construction work, including sub-contractors and project managers.
The law identifies the booker of the work as the ’employer’ as they chose to hire the contractor. People may also typically call them the ‘customer’ or ‘client’.
How to ensure building delays and increased costs are for genuine reasons
It’s common for builders to find faults with the site that weren’t initially available to the eye.
For example, an Engineer carrying out a floor replacement removes the old flooring only to find that the foundational beams of the building have rotted due to a leak and need replacing. This kind of scenario shows how genuine unforeseen circumstances can affect the original timeline and quote, as the contractor can’t install new flooring without the building being safe.
Other genuine reasons for building work delays and increased costs can include:
- Poor or extreme weather
- Material and labour shortages
- Delivery delays
- Design changes following the original quote/contract
- Site permits and permissions
- Sub-contractor issues
If your contractor presents you with a building delay or increased cost, you should consider whether the reason is relative to the specific job they are doing. Most importantly, you should refer to the construction contract.
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What to look out for in a construction contract
Your contract outlines the services provided by the contractor and includes important details to resolve any disagreements.
Before you even enter into a construction project, you should review the contract. Certain key contract elements that cover both parties can indicate that your contractor follows best practices.
1. Notification requirements for delays
Your contract likely includes a mandatory notification process for situations like this. Why? Because proper documentation protects everyone involved.
Here are the typical notification ‘must-haves’ outlined in most construction contracts:
Format and Delivery Method: The notice should be in writing and delivered via a specified method (email, certified mail, etc.).
Strict Timing: There may be a deadline for notifying the other party about delays or cost increases.
Detailed Content: Builders should provide evidence of the delay’s cause, costs incurred, and a new projected timeline.
If your contractor fails to follow these steps, you may have grounds to challenge their claim. Don’t just take their word for it – refer to the notification terms in your contract.
2. Evidencing the causal link between the delay and costs
Contractors need to consider causation in a prolongation claim. The sums sought should compensate the contractor for losses they will suffer. It is ultimately a claim for further time-related costs caused by the delay.
A contractor will likely struggle to convince the court they are entitled to costs if there would have been a delay or cost increase regardless of their prolongation claim.
A notice for prolongation claims in a well-drafted contract requires the contractor to provide:
- Evidence of the delay
- How it is outside their control
- Summary of what costs are attributable to the delay.
Going back to our previous example, the contractor could state:
The scope of the job needs amending to cover the costs of extra labour and materials in order to fix the structural issue discovered when the floorboards were lifted. Materials for new foundational beams cost £680 and the labour to install them is £400 on top of the original quote of £1000. The new job total is £2080.
You should clarify any uncertainties about delays or costs in writing as a response to the delay notification.
3. Evidencing costs
An often neglected part of a construction project is record keeping. From the outset of the project, your contractor should collect all important records such as receipts, emails, and contract terms. They should also share any relevant records with the client.
As the burden of proof is on the contractor to prove their prolongation costs are genuine, it’s essential that all records are available. Not having any records significantly affects the case.
You should also keep accurate records of the project. Make clear at the beginning of the project (ideally in the contract terms) what documents you want the contractor to share with you. Shared records can quickly show whether a prolongation claim can be substantiated.
If your contractor delays the project, you need to consider why there is a delay, as well as the length of time. You can weigh up what parts of the delay are out of the contractor’s control and what parts they are liable for. Talking openly and looking at records can help you both agree on a fair plan moving forward.
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How to avoid building work delays
Building work delays are practically inevitable due to the volatile market and unpredictable nature of the work.
Even with a robust construction project plan, you can’t foresee what will occur or be uncovered during a project. For example, builders would never have been able to predict COVID-19 and the impact it would have on work and materials.
With that said, it is always better to prepare so you can be ready for all eventualities. Here are some ways you could avoid or at least minimise the effect of a building works delay:
- Find a reputable contractor. Even better if you can see their work in person or receive a word-of-mouth referral from their previous customers.
- Ensure you have a construction contract in place and that you’ve actually read it and understood it.
- As you contractor questions if you don’t understand or agree with any terms.
- Look out for the three contract items listed earlier. If they aren’t in there, ask about it or find a new contractor to continue with.
- Plan for delays – what would you do if there was a delay by x number of weeks? Would you be able to wait and for how long? How much extra cost can you add to the budget?
- Set a budget and then set up a contingency budget. You should always allow for extra unexpected costs.
- Keep in mind a backup contractor in case you need someone else to take over work.
If you need help reviewing a construction contract, our construction solicitors are here for you. You can book a consultation on 0203 007 5500.
When to seek legal advice over building work delays
You can consult with a solicitor at any point in your construction work.
We can help you with:
- Reviewing or negotiating contract terms before a project starts
- Checking your contract terms when a contractor has delayed the project
- Construction disputes with a settlement
- Court litigation
Taking a contractor to court is not always the best or most cost-effective route. Speaking with a specialist construction solicitor will help you clarify whether you have a case, roughly how much it will cost and the length of time it could take to resolve. From there, you can make an informed decision on how best to proceed.
Can I refuse to pay my builder for delayed work?
Everything comes back to the contract. If you withhold funds from the builder, you could be breaching the contract and therefore they can bring a claim against you.
Aside from the legalities, this is likely to heighten the tension of the situation and cause further delays.
Compensation for building delays
There is no set compensation amount for building delays. All compensation is relative to the case, the evidence, and the damages caused by the delay.
It can also go the other way; your contractor may seek compensation from you depending on what the delay is. You could be liable for a claim if you delay the project because of a change of scope or use of materials on backorder.
To summarise:
- In times of uncertainty, start by going back to the contract.
- Notification requirements should be in a good construction contract and adhered to.
- Causation is key.
- Record keeping can avoid or at least narrow a dispute.
- Seek legal advice if you are unsure of your stance at any point.
In many cases, delays will be for genuine reasons, and you can work with your contractor to resolve any issues. However, sometimes legal intervention is required if the contractor is breaching the contract or reasons for delay are avoidable.
If you need advice about building work delays, you can book an initial consultation with our construction solicitors by calling 0203 007 5500.
How can Britton and Time Solicitors help?
We know how stressful and costly construction disputes can be. That’s why our initial consultations with our construction solicitors offer you:
- Unlimited time to go through the details of your case and ask any questions
- An overview of your legal standpoint and your available options
- A precise time and fee estimate for your case
To arrange your initial consultation with one of our solicitors, simply call us on 0203 007 5500.
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