Fixed price agreement - can you please help?

[Ananda]

My son and his young family agreed a fixed price with a developer to have a house converted (the developer employs the builders on a contract basis). During the conversion it became necessary to knock walls down and rebuild them. This has obviously cost the developer money which he is now trying to recover from my son before the house is finished - what should we do?

[sequenci]

Do you have the agreeent in writing?

[Ananda]

Hi, thank you for responding. I believe my son has a schedule of work together with the final price.

But it does not include anything regarding 'extra work' the old house was surveyed and wall/foundation problem not picked up, so the developer went ahead on that basis. Makes me think that his beef should be with the surveyor(?)

 

Thanks again.

[sequenci]

No worries, this is outside of my usual area - I'm going to alert the thread to the rest of the team.

 

Best wishes,

 

Seq.

[Ananda]

That is very kind of you.

[HSBCrusher]

I am in the building trade, and have come accross this many times before.

 

The problem here is that before any extra work is carried out there should be paperwork with an agreed price. If its in writing, there is no problem.

The builder has had to do extra work (which is not his fault) and wants paying for the work. I suppose the only lever he has is not to do anything else till he gets paid for what he has done already. If he has done the work, and its to a good standard he should be paid.

Hindsight is a wonderful thing, but always get everything down in writing.

Additionally, the surveyor might not be at fault either. I have surveyed buildings before, and sometimes the faults are not readily apparent till work is begun. I have fitted windows only to find the lintel has failed and needs replacement. Surveyors are generally quite good, but they don't have crystal balls.

 

IMO if the work needed doing, then it will need to be paid for.

[Ananda]

Thanks for taking the time to help.

But, surely the point is that the developer 'agreed a fixed price' based on the budget available and maybe he should have known better?

Although he kept them posted, at no time was extra payment for extra work mentioned by the developer.

 

Thanks again.

Edited November 24, 2010 by Ananda

[HSBCrusher]

The developer agreed a fixed price for the work given in the original schedule.

He has now done more work than this, and therefore needs paying.

 

Surely the extra works would have been agreed (even verbally) before they were begun?

 

has the developer paid the builder?

 

did the builder do the extra work at the request of the client, or the developer?

Edited November 24, 2010 by HSBCrusher

[Ananda]

Hi, Nope, the subject of extra payment was never mentioned - the developer has paid the builder (?)

The extra work was carried out at the direction of the developer - without discussion or hint of extra payment with my son.

When my sons wife said 'I bet you are sorry your started this' he replied to the effect' my fault for not being more careful' (I paraphrase).

We have reason to believe that the developer has tried to get recompense from the surveyor and failed, so is now trying the next in the line.

Edited November 24, 2010 by Ananda

[HSBCrusher]

did your son agree to the extra work?

was he led to believe it would be free of charge?

Edited November 24, 2010 by HSBCrusher

[Ananda]

The subject did not come up, other than general moans from developer.

My son was not even asked to agree to extra charges, and therefore by omission was led to believe costs were going to be met by the developer.

Edited November 24, 2010 by Ananda

[HSBCrusher]

at what stage is the building? Is it "liveable"?

[Ananda]

Hi there, yes just liveable but no kitchen, tiling needs doing and other bits and pieces.

I have seen the signed agreement and there is a price 'total cost' no mention of 'extra charges'.

[HSBCrusher]

with a building project converting an existing old building like this there is no such thing as a fixed price, there are always extras that come along.

however, these must be agreed and any extra charges should be down in writing.

 

So, what options does leave us?

 

1. your son can get the work finished himself, it doesnt look like there is a lot left to do. The developer might come chasing your son in the courts, but he will not have anything in writing, so this will make things difficult for him.

2. your son pays for the additional work, and the builder finishes the work.

3. come to some negotiated agreement with the developer, after all the work has been done.

4. your son gets solicitors and courts involved, and to be honest, who knows where that would end (although its certain the solicitors would do well out of it)

 

I have seen this before, it can get very messy indeed. Personally I would go for some sort of negotiated solution.

 

just my opinion of course.

[Ananda]

I appreciate your help and thank you.

The latest seems to be that unable to get the money the developer wants, my son has told him not to finish the job and keep the money instead.

My son will then get the work finished himself.

[HSBCrusher]

I'm really sorry this hasnt worked out better for your son, Its not ideal, but I think this is probably the best outcome.

 

Just a tip: if he needs to save money on the kitchen, buy cheaper carcasses and spend the money on the worktops, doors and taps etc.

Edited November 25, 2010 by HSBCrusher

[Ananda]

Thank you again for your kindness, will keep you posted.

[HSBCrusher]

you are welcome:-D

 

please do.

[Ananda]

Hi HSBCrusher, may I ask for your advise as regards the best strategy regarding a letter to the developer.

It has been suggested that we take the initiative by writing an amicable letter outlining what we were led to expect and what we have received and monies paid to date.

Possible, we should outline how we would like the matter to end and place a time limit of maybe seven days in which we would like to know his intentions. If no reply is received we will take it that no more work is being undertaken and our relationship is at end - what do you think? Many thanks.

[perplexity]

As was suggested before, it is all down to what exactly was agreed, so if it is not yet clear what was agreed, a letter to outline an understanding of the facts of the matter would serve to clarify the issue, and if the developer fails to respond it would be fair to construe that as a consent to the version presented.

 

It sounds like the developer made a mess of it all by failing to inform in good time, but you need to beware that the developer's version of it may not be quite the same as your own impression.

 

I wonder if the builders could throw some light on the subject. If they only ever dealt with the developer, with no knowledge of a need to look elsewhere for money to come, that's a large part of the story accounted for.

 

[Ananda]

I really appreciate all the sensible help provided on this forum.

The developers version may, obviously, vary, but he has nothing in writing with signatures which can show that extra charges were notified or agreed - they were not.

Once again, thanks for helping.