What are the risks when hiring tradespeople? How to avoid common failures like sub-standard of work, budget blow out, unfinished work, delayed completion and disputes?
Hire a Tradesman
Avoid common failures and unfinished work
How to get started?
Over the last years rules and regulations have changed. That could mean your project needs council’s consent and/or the work must be carried out by a licensed trades person.
That is why I always start to scope the work, obtain information from the local council and then I talk to people who are willing and able to do the work.
At the begin making informed decisions can reduce costs and fees for consents and permissions. For instance with little design changes you could reduce e.g. the height of a retaining wall below the threshold for your landscaping project. So you could avoid the related fees for a consent.
Recently we changed the design of a load-bearing wall and converted the renovation project into a “minor” alteration. In this way we reduced the costs without restriction of the result. Normally the builder would not care as he charges you for additional work and passes on fees for council permits.
After scoping the work finding a suitable tradesman can be a daunting job. The good ones are busy and picky and people with no references are not always trustworthy. Using word-of-mouth is still common, however getting tradies online on board is something worth trying. Online reference checks are helpful to reduce risks. To find professional trades people I use several online tools like Builderscrack, Licensed Builders Register, tradebox, no-cowboys and council’s websites.
How to manage risks?
The risks depend on the size of your project and restrictions on the insurance policy. For builder’s insurance cover, you need to sign a contract between the builder and yourself. Contracts we sign have the builder’s insurance cover attached. For small projects a handyman can be as quick and effective as a lower-end contractor.
Common risks are related to typical reasons for disputes such as
· Quality of workmanship, sub-standard and uncompleted work
· Blow out of related costs or quotations
· Time delay and abandoned completion
If you agree on paper the scope of work, timeframe and costs before work has began, you will be in a good position to manage these risks.
The scope of work (description) should also specify what is covered by insurance and who takes care of meeting council’s regulations. When making any alterations to a property the homeowner has to meet TODAY'S building code.
Restricted building work
Everything that is classified as restricted building work needs a building consent from the Council. Anything that may affect weather tightness is here included. So—check with your builder before commencing work, whether he complies with the rules and double check with your council.
What are common failures?
Engaging somebody, who is not trustworthy, skilled or does not know the rules. It is good practice to check trades people’s reputation, ask for referrals and visit the completion of previous jobs. It tells a lot how long the tradesperson is in business under the same trader’s name.
Choosing the bargain-priced quote
Quotes are essential for budgeting. Be aware that not always the cheapest option saves money. It is not uncommon that bargain-priced quotes become complicated and more costly than originally thought. Look for exclusions and missing essentials. Any alterations push up the price if not quoted. Add to the quote your priorities (desired outcome or solution) and include a specific clause with a deadline. Clarity forms happy business relationships. Read more
Upfront Payments call for trouble
Payment requests before the work has began should set you on alert. It could mean that your tradesman has no money or credit to run the business. If you agreed to upfront payments then obtain an invoice that specifies e.g. the materials and get the delivery to your premises.
If you have not signed any paperwork, agreed on price and how long the work to completion will take, then the assumptions are - the job should cost a ‘reasonable amount’ and take ‘reasonable time’, whatever that means. Sure, it is the begin of the dispute.
Contractors dragging the job
Of course delays to complete a job are not unusual because of weather, delayed delivery of materials, builder’s time management. Builders often change priorities in favor of a better paid job that causes hardship for projects running behind schedule. To avoid delayed work on your project put a “sunset” clause (deadline) on paper and keep close in touch with the contractor.
Alterations bring the schedule to a standstill
Making changes in the middle of a job or construction are reasons for a budget blow out, delays and finger pointing. When an alteration is necessary, do it in writing to record what needs to be done, costs and update the timeline for impacted work.
Contractors cut corners
Cutting corners— don’t give it a chance by visiting the building site, note the right materials used and check the quality of workmanship. Managing trades people correctly makes a huge difference and is cost saving, too. Be aware, you hired a skilled builder, he might employ unskilled laborers – are they supervised?
Hazardous and toxic materials
You need to know if hazardous materials have been used and refuses have been disposed properly. Contaminated water, soil, etc on your property for instance entering the ground water can cost you a fortune and you may be liable, since the pollution came from your property.
Unfinished jobs and work in dispute
Before going in dispute consider that it can be difficult finding a new contractor to finish the job as the new contractor is then liable for the finished product, which may or may not have been constructed correctly.
In this case any related work done needs to be signed off before the final payment. That guarantees the new contractor’s liability from this point onwards if somebody risks finishing somebody else's job.
Getting people in at short notice to finish a deadline will likely cost more. Also the recovery of additional costs for remedial work will be tricky.
Know the rules for permitted work, licensed trader and quotes. Common disputes or unfinished work are manageable by agreements in writing before the work has began. For helpful information consult the specific trade body or trader’s association. To prove your position record faults, keep communicating and avoid escalating a problem. Your focus must be the completion of your project. Good luck.
NOTE: The Health and Safety at Work Act 2015 (HSWA) came into effect on 4 April 2016. Check its relevance, e.g. investors/landlords as PCBU (person conducting a business or undertaking) have to obey the HSWA.
Klauster Properties Ltd. - Homeowner's Blog
Venture into the world of home ownership cliches
Jack of all trades
Generally speaking, you can hire anybody with a toolbox because no qualification is required being a handyman, tradesman, builder, contractor...
Don’t get me wrong I am not saying that is a problem, just be careful before hiring somebody you trust.
As owner you have to find out if the job must be performed by a licensed tradesman, a council permit needed and what the related costs really are for paperwork (permit), material and labour.
Like everything, doing the homework reduces the risk of being disappointed. Let me explain.
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