I could do with some advice from some of you guys who maybe get involved with building contracts, and in particular loft conversions in the London area. My daughter and son-in-law are planning a loft conversion to a 1930s 3 bed semi in Kingston-on-Thames. They have approached 3 builders that have been recommended.
Builder 1 doesn't respond to emails or phone calls.
Builder 2 is "
Surrey Lofts" which has submitted a competitive quote for a fixed price contract, responds to questions put by email or phone call and comes with good references. However, they want 15% up front deposit - which is somewhere in the region of £6-£7k, payable by a BACS transfer - and a further 15% when the scaffolding is up.
Builder 3 has quoted £9k more than Surrey Lofts but requires no upfront deposit - just stage payment for drawings and building regs, and thereafter in arrears during construction.
It turns out that Surrey Lofts have only been in existence for 18 months and that my daughters contact there was previously a director of a loft conversion company that went bust. Alarm bells are sounding! Were all creditors of that company repaid in full? Including unsecured ones? I suspect that whilst he probably has a nice house and car, all significant assets will be owned by his wife and that there would have been no claim on them. What happens if come the day, no one turns up? Or they're told that there have been some unforeseen delays and they can't start until November? Or next year? My daughter would have no hand to play unless she wrote off the deposit. Everything you ever read or see tells you not to pay significant sums up front - so why would a reputable company ask you to do just that?
I think they need a 3rd quote. That will determine whether the outfit which is charging £9k more is too expensive, or whether Surrey Lofts is too cheap.
I've also suggested that they tell the guy from Surrey Lofts that they like his approach, that his communications and references are good, and that the overall price is acceptable and that everything else being equal they would like to accept his quote - but his requirement to make such a large upfront deposit before any work has been done is a sticking point, as is the requirement to make a BACS transfer which provides them with no protection whatsoever. Tell him that companies have been known to go bust between paying a deposit and work starting - which would tell him nothing he doesn't already know (!) and would also tell him that they've done their homework. Given that Surrey Lofts is a reputable company, why do they ask prospective clients to do something that the industry as a whole advises so strongly against - i.e. making a significant payment up front before any work has been done. At the very least, insist that funds are held in escrow, or paid by VISA, and that the start date agreed is a material part of the contract.
I should also add that they also want a further 15% once scaffolding has been erected. Their website claims that they do everything in house and don't use subcontractors, which on the face of it is good. That presumably includes the erection of scaffolding. The scaffolding required for this project would be very simple - probably erected in half a day - at which point they want another 15% which would be in the region of another £6 - £7k. If they own the scaffolding, then all they will be paying out themselves is maybe for 1 days work for 2 men. So my daughter would have paid out 30% of their budget before any actual work has started on their house!
We live over 200 miles away so we haven't any local knowledge on this one. Can anyone else offer any constructive advice here please? My gut is telling me to feel uneasy, and it rarely lets me down!