Run a small construction co. - client won't pay final invoice. - help RE: Small claims please ***Resolved***

[Kwabena]

Hi all,

 

I hope this is in the right forum...apologies if not! 

 

I run a small construction company and have a client who isn't paying their final invoice. 

 

Without going into to much detail they don't really have any grounds to do this other than not wanting to pay and trying to find excuses not to.

 

How do I go about starting a small claims action against them...never done this before!

 

Thanks

[Kwabena]

Thanks for the reply @BankFodder

 

Built an extension for them on a daywork basis and have been invoicing weekly up until this point. Work is all to a good standard and signed off by building control.  Communication has been bad on this job and they have only wanted to communicate via email throughout rather than speaking every day like most client..to the point where I was having to email them from my phone in their garden while they are sat in the house.

I think this lack of ongoing dialogue has led them to become suspicious of whatever I do which is extremely unfair as I have worked hard to give them a good service.  

 

The final invoice is for approx £3,000 which is half labour and half materials (I have invoices for all materials).

 

I have been on the job for approx 3 months and every other invoice has been paid up to this point

 

Do you need any more information?

[Kwabena]

Thanks both for your replies.  so yeah just to summerize and answer some points raised

 

Every other invoice has been paid but I have felt the relationship going downhill for a while now.  The emails from them have got shorter and then for the last few I sent as we we're getting finished I didn't recieve any replies.

 

Originally I did quote for this but the job had so many unknowns on it that we decided it may be better on day rate.  I don't have access to the total costs at the moment but I would expect it to be more than the original quote.  The job grew massively though as we found a lot of problems during demolition,  and there was also much more work to rebuild it as originally we were going to re-use some of the old structure but this couldn't stay.  There was never really a guide for dayrate as we both understood that this job was full of unknowns

 

When I put my final invoice in they didn't respond.  After two weeks I sent them an email asking if there was a problem and I got a reply explaining the reasons for holding back the money. One example is that I add 10% to any materials I supply to cover my bookeeping costs.  They say they will not pay this as I had to do school runs sometimes and so they feel they are owed some money for that.  In my original email (from before the job started) detailing my charges etc I mentioned I have school runs occasionally and I still charge a full day (I do alot of work in the evenings/wknds to do with the running of this job to make up for it), I had also mentioned the 10% charge on materials and they had agreed to both and not bought it up until now.

 

The rest of the reasons are all pretty much bassless like this and I have historic emails from them contradicting their reasons  for not paying

 

It really does seem to be a case of not wanting to pay and looking for any reason not to.  The only reason I can think of that they can argue is that the quote is less than the total cost of the job is,  but like I say the job is completely different now to the original quote...and once daywork was agreed the quote is irrelevent anyway.

 

 

 

[Kwabena]

The original quote was around £80,000 plus vat,  I have no idea what the current total is.  They have been invoiced for approx £35,000 by me including labour, materials I have supplied and hire equipment that went through my account

 

No comments as to the quality of the job

 

Arrangement with materials was that I would get quotes and let them know what we needed.  Any materials that wen't through my account would have 10% added to tehm but I would give them every opportunity to pay direct and avoid this.  Materials that went through my account added up to about £3,500 but I'm only adding 10% to about £1,600 worth

 

I put in the final invoice and have been off the job about 3 weeks now

 

Not sure if this is relevent but the job isn't finished yet.  The agreement was that we would get the structure up and get it wind and watertight.  Once this was done we would get them loads of quotes for plasterers, plumbers etc and they were welcome to deal with trades direct or use us to help out with anything/everything.

[Kwabena]

I think I didn't explain myself to well...originally I had quoted for this work to include everything and that quote was around £80,000 plus vat. 

 

Once we moved onto the option of doing daywork they have been paying all other trades and most of the materials direct to supplier/tradespeople so the £35,000 I have received just includes labour for me and my team and whatever materials/equipment has been supplied through my trade accounts.  Everything else has been paid directly by them which is why I don't know the full amount this job is costing

 

There's no breach in terms of the job being complete...we specialise in doing the structural work and getting the job to a stage where other trades take over to finish the internal stuff.  It was always the agreement that we would get it to this stage,  set them up with all the trades they need and then they will deal directly with them to get the job completed.

 

just to clarify the total cost of the job up to this point will be more than £35,000.  This is just the amount I have received for services/materials provided directly by myself

 

[Kwabena]

Everything that I was originally booked in to do has been done to a good standard.  The extension itself isn't completed but it was always the agreement that others would finish this.

 

I supplied just some of the materials...about £3,500 worth.  The majority of the materials were supplied by the client who payed the suppliers directly

 

The 10% was  doesn't even cover my bookkeeping fees for the time I have been on this job! I emailed them before the job started with our daily rates, and a few more details including the 10% mark up.  The reply from them said "thanks for the email,  which makes sense"

 

 

[Kwabena]

So once I sent the invoice and didn't hear back from them for two weeks I sent another email chasing.  They came back with an email stating reasons they didn't want to pay.  I replied going through their points one at a time and explaining why I disagree.

 

I haven't heard from them since and that was close to a week ago.

 

I can reproduce them here, was worried about putting it into a public forum though...

[Kwabena]

ok fair enough...I'm just about to go out for a few hours.  I'll post it up here later.

Thanks for your help so far,  i really appreciate the time you are taking with it

[Kwabena]

Here is the reply to my email chasing up payment

 

 

Quote

 

Hope you had a good break.  

 

Further to receiving the last invoice for the work at *********, we will be retaining the monies until a few issues are clear and have been concluded.  

 

Firstly, the drain and pump has not been installed and there is the risk that the groundworks installed so far have not been completed correctly.  The contractors that have been on site have expressed the same concern.  We’ll know more once it is fitted.  

 

Secondly, there is the cost of fitting the drain.  Because it was not fitted at the time that the other groundworks were completed we've incurred an additional cost.  The equipment hire costs are being quoted at c£500 to c£600 for the same items that were on-site.  

 

Hopefully this will be resolved over the next few weeks, at which point we will come back to you.  

 

In addition, there are a few issues highlighted below which will mean the final amount will be reduced:

• For the book keeping charge that has been included won’t be covered by us, this is because we have paid a day rate that and the time taken to make the payments is covered by the reduced hours on site due to childcare arrangements.
• For the kitchen lights we’ll purchase the replacement lights and bulbs and take the cost of this from the final amount paid.  
• There is an excess of steel from Buildbase left on site and we are happy for you to return this to them for your account to be credited.  We’ve checked the cost on Buildbase and will reduce this from the final amount paid.  The steel is located at the side of the house (where it was left underneath the pallets), please let us know if or when you'll pick it up.  
• Similarly there are unopened materials which could have been returned, so again we’ll reduce the final price and for the cash float there is £10 unaccounted for, so we’ll also take this from the final amount.  

So in summary, payment of the last invoice (at a reduced sum) will be held until the remaining works are completed.  This is because the contractors met on site are not confident that the work has been completed as required and because of the additional costs incurred.  

 

I’d suggest we communicate by email until this is resolved.  

 

A camera has been left on site which you are free to come and collect.  Please inform us when you'll be picking this up.  Please note, the images from the camera on the extension’s build can’t be used. 

 

Regards 

 

 

[Kwabena]

And my reply to that message...

 

Thanks for your response, I'll try to address these items in order

 

Drainage

 

At the moment you have a pipe coming out of the wall capped at the end, there's not a great deal that can wrong with it.  What are the specific concerns you or the contractor have with this?  By rights if there's anything wrong with it you  need to give me the opportunity to put it right as a first resort but I just can't see what this would be.

 

The drain couldn't be dug out when we had a digger onsite as we were still discussing what drain you wanted (see email dated 6th Jan) after the digger was off hired so this isn't a surprise.  I'm not liable for any future costs associated with this project.

 

Bookkeeping charge/school run

 

This was all agreed beforehand, you can find it in the email chain dated 14th October and are two completely separate items.  As agreed, I still charge for a day when I have the school run but this is mitigated by the time spent in the evenings and weekends running the job and organising items, deliveries, trades etc.  As you can see from the amount of email contact we have had over the course of the job and the days/times they were sent this is not an insignificant amount of time.

 

The bookkeeping charge was also agreed and is a reasonable charge for items which go through my account, most builders add more than 10% and I have always offered for you to pay direct if required to avoid this. Just for information since the start of this job I have had to pay my bookkeeper approx £400 so it doesn't even cover it.  I even took the charge away from the larger items like concrete and digger hire

 

Kitchen lights

 

The kitchen lights were set aside at the back of the garden for re-use and I don't know what happened to them...I'm not 100% sure I'm liable but as a gesture of goodwill I was always willing to replace them.  I seem to remember there were 7 lights so I'm happy to provide like for like replacements or refund the money at trade prices.  The bookkeeping charge I offered to remove more than covered this so it's up to you which you take?

 

Steel/materials left on site

 

There is some steel left over...I think the lengths that are there have been cut so can't be returned. Even if they could be returned you asked for all leftover materials to be left on site so this is what we did (apart from the insulation and Hardieplank which we returned as agreed) so you are welcome to return whatever you want but they are nothing to do with me anymore and I won't accept any deductions  for these items

 

Camera

I'll get Gav to remove

 

In summary

 

It's not up to you to arbitrarily hold money, deduct money or change the terms of the agreement when it suits you,  that's not how these things work.  If you have any issues related to what the invoice is for then please let me know and we can discuss,  otherwise I would expect you to pay the final amount owed.

 

 

I'm sorry that you seem to be disappointed with what we have done,  we came onto this job and worked throughout with good intentions and at all times tried to do the best for you.  I had hoped for us all to work as a team but the lack of communication from you has been staggering, speaking to each other regularly would have made things so much easier. It seems to me like this lack of communication has ended up with you thinking that we are working against you and being suspicious of everything we do,  and if that is true then it is just so unfair as that has never been the case.

 

I'm happy to keep this on emails if you would prefer but I still think even now it would be better to come over and have a chat about it.  So much easier to get our points across and understand what the other person is trying to say face to face

 

[Kwabena]

And no communication since I sent my reply a week ago

[Kwabena]

So is it ok for them to hold money back based on random reasons that as far as I can tell are nothing to do with me? I thought that I could just take them to small claims for everything...do you think that's not the case.

The only thing I can see that may sound like it is relevent is what they are saying about the drain but the reality is there is nothing wrong with it.  I have left them with a drainage run coming out from the new extension which needs to be connected up once the external drains are put in (by others)..its pretty standard stuff and there is nothing wrong with it.  

It's hard  to say what they are disputing as they haven't given any ore detail than I have given you, and have stopped communicating.

[Kwabena]

What question is it you think I'm not addressing?  I thought I had answered  everything but happy to cover anything I've missed.  The outstanding amount to be paid from the final invoice is approx £3,000 which includes vat

[Kwabena]

If the drains need adjusting at this stage then it will be quite costly...possibly £1,000 or more.  Luckily they are installed correctly

 

As for the other stuff  it's hard to say but maybe another £1,000

[Kwabena]

I think that if everything they say is true it could be in the region of £2,000 so only £1,000 left undisputed.

 

It's very hard to put a value on these things as we are dealing with a problem that's in his imagination.  If there is an "unknown" problem there is also an unknown price to fix it.

Prices in this line of work are notoriously hard to pin down as well....so one person could value the work at £500 and another at £2,000.

 

But the claims they are making are spurious...I have an email from him asking me to leave  all materials onsite,  and then he wants to deduct money from me because I didn't return some of it

[Kwabena]

So it sounds like a good first step would be to email and address their concerns and offer an olive branch of some kind?  Here's a (hopefully) concise summary of their concerns and my thoughts

 

Drains - They have "unknown" concerns about the current installation which is waiting for connection.  I could offer to leave £500 outstanding to allow for any adjustment that needs to be made

 

Hired equipment - They are saying that they will need to hire more equipment that we have previously had on site which will cost £500-£600 (I assume this means a digger and is massively exsesive..it would be more like £200).    I don't feel liable for this,  the reason the drains weren't done at the time we had a digger is because they are non standard and we needed more information and decisions made,  I have an email from them after the digger was finished with still trying to clarify which type of drain to use

 

Bookkeeping charge - This was agreed ahead of time and is only worth £160

 

Kitchen lights - These are the lights from the old kitchen extension which was demolished, which they asked me to set aside.  I did that but can't find them.  When I originally sent my invoice I had already removed the bookkeeping charge of £160 to cover this (the value of the lights is less than £100)

 

Steel to be returned - They are saying that some leftover steel needs to be returned to the supplier and credited to my account.  This can't happen as they paid by card themselves so any credit would need to go back to them.  I also have on email from them asking for ALL leftover materials to be left onsite on the day I finished up

Unopened materials left on site - They want me to pay for all unopened materials that were left onsite.  There are hardly any of these (I can't actually think what there is) and again,  I have on an email that they want ALL materials left onsite when we finish

 

£10 cash float - They we're giving us cash to pay for diesel for the digger and I was keeping change/receipts for them.  They say it is £10 short,  I have no idea but am happy to take their word for this

 

 

 

That's all their concerns....do you think offering to leave £500 with them if they pay the rest of the invoice would be a reasonable starting point?

[Kwabena]

That's fantastic!  Thankyou so much for drafting that for me.  I'll send it over (with some minor modifications) and see what they say.  I'll let you know how it goes 

Thanks

[Kwabena]

Ok will do...I'll try and do it later tonight

 

[Kwabena]

Agreed. So here is what I propose to send...  I have just changed the wording around the returned items to address the email he sent stating that we should leave them on site...what do you think? 

 

 

Quote

 

I'm sorry you haven't responded to my email of 1/3/2022 in which I have attempted to address your concerns.

I still think the best thing to do is to have a dialogue in order to understand the issues and hopefully to agree a solution.

In terms of the workmanship I understand that you have an issue with the drains. However, you haven't identified in detail what the problem seems to be. If you be kind enough to do that then I'll get back to you immediately with my comments.

The best approach might be for me to meet you at the property by appointment and you can show me the problems that are worrying you.

I understand that you feel that you need to hire some more equipment – I am assuming that this is a digger. Once again, if we can meet on site then we can discuss this and I would suggest that if it is necessary to hire equipment that I might be best placed to do it on your behalf because I will obtain a much better price through my trade account.

I understand also there is the problem of missing kitchen lights. These were removed but I agree that you asked me to retain them and unfortunately it seems that they have probably been disposed of when we were carting away rubble et cetera.

As you know, I already reduced my original invoice by £160 (the bookkeeping fee) to reflect the disappearance of the lights. If you think that this is not an adequate sum then please let me know what you have in mind.

You have also referred to the problem of certain materials having been left on your site. You have asked that this material be returned to the supplier and that I would then receive a credit to my trade account. Unfortunately you paid for these so they can't be credited to my account,  and also you did ask me to leave all materials on site on what turned out to be my last day so this is what I did.

You have also referred to "unopened materials" which have been left on site. I'm afraid I'm not able to recall what they might be. Once again, I think a site visit would give us an opportunity to understand exactly what issues we are talking about and to make suitable arrangements.

I look forward to hearing from you

Yours sincerely

 

 

 

 

 

Edited March 6, 2022 by BankFodder
Edits in red

[Kwabena]

One question I have...I don't feel liable for the hiring of a digger again for the drains.  It wasn't possible to do these drains when we had a digger on site before as we were still researching and waiting for decisions on the non standard external drainage works.  He was aware of this at the time and I have an email from him asking for more information after the digger was sent back.

Also,  I'm not sure if a digger is appropriate for the new works as there isn't room to use it properly.  If we we're doing it we would just dig it by hand.

Is it worth mentioning this or should I just go with what we have?

[Kwabena]

That's great,  thankyou.  Have sent it and will keep you posted

[Kwabena]

Got a reply!

 

 

**** 

 

I’ll respond to the emails once the drains are connected.

 

Regards 

 

****

[Kwabena]

We all knew that this would be a bit of a tricky job with quite a few unknowns so I offered to do it on this basis at the same time as sending the quote,  they we're given both options with no pressure to choose either one over the other.

 

The idea is that we all work together, they take some pressure off me by ordering materials etc,  and they only pay for the labour that is needed.  I've done about 4 other jobs on this basis and on all of them we have walked away with happy customers and we are even going back to do more work for one of them later this year 

[Kwabena]

I'm busy working and parenting so can't always reply straight away..I reply as quickly as I can! 

Apologies,  I missed the drain question.  The existing drain that is to be connected into is higher than the new drainage that comes out of the extension, so that means that the waste needs to be pumped up hill for about 12m.  They needed to get information from building control and source a pumped drainage system to be installed to accomplish this.

 

There is nothing that could be done about these levels,  it is just that their existing drain is very high.

 

 

...and I have emails from me offering them both options and them accepting to go with the daywork option

Edited March 7, 2022 by Kwabena

[Kwabena]

Yes,  I was employed on a daily basis up until the point they told me to stop coming in.  It was never the plan that I would finish the job to completion.  We new from day one that the drains may be an issue (although no-one knew or could have known that it would need a pumped system).

 

I offered to finish the drains but they got others in to do it which is fair enough as that fits in with what was agreed at the start. 

 

I installed the drains from the kitchen and bathroom internally and bought them out of the building to be connected at a later date which was the only thing I could do until we knew what was happening externally and is perfectly acceptable

I have no idea why they can't respond until drains are connected.  I can only guess that it is because they want to test them before deciding how much money they want to remove from my final invoice