Home Improvement Contracts and Building works – ‘Good foundations’
During the last year many of us have spent more time at home than ever before due to Covid-19 restrictions. Some of us have used this time as an opportunity to carry out home improvements and minor building works. Between the aftermath of Brexit and the pandemic, we have seen the inflation rise significantly and specifically an increase in the price of building materials and delays to their supply.. These unpredictable events can cause real problems for both the trader and the home-owner/customer and can lead to expensive disputes and disgruntled parties. In response to an increase in these types of enquiries, we have provided some useful tips for consumers. Traders stand to benefit from these tips too. Knowing what is important to your customer and reflecting this in your dealings could instill more consumer confidence in your business and secure more contracts.
Top Tips to avoid disputes
It seems obvious, but many of us do not spend enough time preparing for the intended home improvement project and as a result, we run into difficulty later. Before engaging a contractor or tradesperson to undertake work, we recommend you consider the following steps:
Do your Research
- Check the identity of your tradespersons/contractors to confirm whom you are actually contracting with. Are they individual sole traders, partners or a limited company?
- Check the trading address for the contractors to see if it is a post box or an actual address. You may be able to do this online or using an app.
- Check the company’s financial status at Companies House to see whether there is likely to be any risk of the company being struck-off or going into liquidation in the future.
- Search for online reviews from trustworthy sources.
- Check the trader’s website, paperwork and vehicle to see if it is licensed and/or holds a current registration/ membership of a relevant Trade Association or Affiliation. Check it holds the relevant qualifications for the work. Members will usually have to comply with the organisation’s code of conduct and a breach of that code by the member could result in the member being penalised or even removed. The organisation will have its own redress scheme that may assist you in resolving any dispute. It is not unusual to find opportunists falsely using emblems associated with trade organisations, so it is important to check the membership to satisfy yourself that all is legitimate.
- Ask to view examples of work. Many reputable traders arrange for customers to display their signage for marketing purposes and provide a cost incentive to the customer so potential customers can view the work carried out.
- Check if the contractor has insurance backed cover to protect you in the event any accidents and/or damage arise during the works.
Quotations or Estimate
- If you want the certainty of knowing what price you will have to pay, then you must ask for a ‘quotation’. This will be a fixed price for the work requested. Be sure to get this in writing and check if it has an expiry date.
- An estimate is a rough indication of the likely costs to be charged and may vary.
- Try to get at least three different quotes or estimates for comparison.
How are you intending to Fund the works?
- If you are taking out a finance agreement to buy new windows or a new kitchen and/or to pay for the installation works, you may find that you have a contract with the finance company and not the trader. This will depend on the type of finance agreement you take out. Ask questions and read any financial information provided to you thoroughly to ensure that you understand what you are agreeing to, before signing on the dotted line.
- Check whether you have a time-limit and/or a right to cancel the agreement.
- If the main contract for services is conditional on you obtaining finance, then you need to make provision to withdraw from any main contract if it transpires that you cannot get the funding. Check whether any cancellation rights exist.
- If you make a payment by credit or debit card, depending on the contract value, you might have added protection.
- Check if you need to pay a deposit and if this is refundable.
- Consider making staged payment so you only pay out an amount reflective of the actual stage of the works.
- Consider having a retention clause in the contract to allow you to hold back a percentage (usually 5%) until the works are completed.
Contractor’s Standard Terms of Business
- Read the full terms and conditions in the contractor’s standard Terms of Business. If the terms do not meet your needs, then consider making agreed amendments to the relevant terms and document these.
- A Trader is obliged by UK law to comply with consumer protection law. Check that the clause dealing with the applicable law and jurisdiction provides that the Law of England and Wales applies.
- Notice of your cancellation rights should be referred to in the Terms of Business. Your right to withdraw from a contract will differ depending on when and where you entered the contract.
Prepare a written contract and outline the key terms
- It is so important to be clear what the expectations are from each party and it is even more important to document these in a written agreement so that the parties can refer back to the document to decipher what they have agreed to do at various points in the contract. Having a well-drafted contract will avoid confusion and provide certainty for all concerned. It could save money and avoid you having to pay thousands of pounds in litigation.
- Key terms should make provision for most eventualities. At the very least, the contract should address and identify the following :
- full names and contact details of the contracting parties;
- a relevant point of contact;
- a description of the works and where necessary, attach a Schedule of Works and Materials: confirm the start/finish dates and working hours;
- identify who is responsible for sourcing and delivering the materials and if any planning or other services such as architectural designs or structural surveys are required, specify who is responsible for obtaining and paying for that;
- outline the price of the works and when and how payment is to be made;
- when and how variations are to dealt with;
- identify the VAT position and outline the complaints procedure.
Our solicitors at Wellers Law Group can assist in drafting bespoke contracts to suit the particular needs of the contracting parties. They can also provide specialist advice on consumer related contracts including home improvement contracts and residential building disputes. They advise both traders and consumers on issues that arise in this specialist area of the law. Realistically, employing a solicitor may not appear to make financial sense unless it is a major project but more often than not, seeking legal advice at the earliest opportunity could be money well spent for your own peace of mind.
If you are in any doubt as to your legal rights or obligations, we strongly advise you to seek legal advice at the earliest opportunity. If you would like to speak to our Consumer Specialist Patricia Wollington in our London office please call on 020 7481 2422 or email firstname.lastname@example.org.