While we don’t wish it on anyone, the sad reality is that even the best builder might not be quite so good at the financial side of his business. How do you know if are you dealing with a bankrupt builder? When embarking on a renovation project, this can be the scariest possibility.
Here are our 7 hints to suggest that you might be dealing with a bankrupt builder:
- Progress is slow, or slows down (If you’re not sure, divide the length of time the project is supposed to take, by the number of stages – if you’re a fifth of the way through in time and the first stage of construction hasn’t been achieved, that’s a concern).
- Your builder does a day of work and then calls with a reason why he can’t work the rest of the week. And does this week after week.
- Your builder keeps saying “that’s going to cost more” and keeps looking for variations.
- You get calls from subcontractors (i.e. surveyor, brick layer, electrician etc) saying they haven’t been paid (although this normally only happens towards the end of the project).
- Your builder approaches you for money in advance.
- Your builder tries to make a ‘deal’ with you – normally related to them having some money from you in advance.
- Suddenly, your builder stops calling and goes very quiet.
What To Do If You Suspect That You’ve Hired A Bankrupt Builder
Any one of these in isolation isn’t an issue – two and I’d be paying attention. Three of these signs occurring and I would be asking questions. Four and I would be talking to my lawyer about the options to get out of the contract. And I would be talking to other builders, at least as a back-up option.
If you’ve picked your builder by who is cheapest without sitting down with multiple builders in detail to ensure their prices are comparative, then you are more likely to end up in this situation.
All builders are licensed. In Queensland, QBCC (Queensland Building and Construction Commission) licenses builders. This requires them to take out adequate insurance to cover a project. However, we believe every client should take a pro-active approach and be aware of what warning signs to look out for. QBCC can only protect you so much, and the time involved might use up any potential profit in an investment project.
When Do I Change Builders?
Finally, keep in mind that if you are having problems with your builder, you’re better to change builders and get out sooner than later. The further along the project is, the harder it will be to find another builder willing to take it on.
Another builder has to take on that first builder’s work, and there’s a lot hidden that he can’t see. If you’re using your mortgage to fund the builder or a bank is involved, they will usually support you in changing builders at the start of the project and towards the end. But keep in mind that they are unlikely to support you halfway through the project.
So make sure you get as much professional advice as possible before you make any moves. Don’t be afraid to ask tough questions and protect yourself from hiring a bankrupt builder.
About the author: Rebekah Hurworth was a gifted architect based in Brisbane. We are no longer able to link this article to her site because she passed away in late 2018. Rebekah was the brightest of the bright and incredibly generous with her wisdom was way beyond her years . We continue to share Rebekahs content because such a bright star should shine always and never be forgotten. RIP Rebekah xxx