Basement Construction Law

There used to only be the Construction Act to understand. But the changes due to the Grenfell Tower fire apply to everyone who needs to comply with at least one building regulation.

And contractors now discovering they are responsible for putting their work right going back 30 years, are wriggling out of their responsibilities by starting a new limited company and declaring that the original business is broke.

Spoiler Alert. My conclusion: employ everyone yourself without entering into a contract.

Is the new Building Safety Act 2022 coming to your rescue? Or will it spoil your plans? More here recent important changes.

Do you intend to short-change, not pay? So widespread, itis probably the root cause of almost all contractors doing their work very badly.

Will you sue? Would you win? No, because suing isn't an available option.

The new Building Safety Act 2022 makes contractors responsible for reparations going back 30 years.

But if firms have to pay to put their ancient work right, what of the underlying cause of bad workmanship - being cheated and not paid in full?

And the 30 year old problem that going to adjudication, for most, costs more than they could win?

Companies facing millions of £s in reparations for work going back years have created new businesses for future contracts. This means the people who got rich can remain rich. While the poor work they profited from is not put right.

There has to be massive regime change. At the same time, clients must pay more, main contractors must pay more, and sub-contractors must be supervised and inspected to ensure they cut no corners and leave no errors. Here's why

You might also like to think for a moment about the difficulty a contract can create during times of inflation.

It has been reported that 59% of construction contracts have problems.

As time goes by, the client gets better and better value as prices rise but the value of the contract stays the same.

But the contractor sees their costs rising and if the client won't step in and help then profit gets eroded and, sometimes, if the contractor is to finish the job he has to cheat and cut costs somehow.

Developers/main contractors don't pay in full	Therefore work habitually done badly, even for private clients	Both made money, no one cared about the people who would live in these places
Enter: new Building Safety Act. Sub-contractors responsible for reparations for work going back 30 years.
Sub-contractors prefer insolvency to funding reparations	They create a new company and carry on	Therefore work continues to be done badly
Building control bodies must screen sub-contractors for competence.	If shareholders start a new company to evade past responsibility, they should not be passed as competent.	But private building control hasn't woken up to this yet.
Will private building control bodies soon be going into insolvency to evade costly repairs?
What of structural warranty providers, such as NHBC, Premier Guarantee, Build Zone, and so on? How are they going to wriggle out of huge claims looming large?

As you know by know, there is always a lot to know A Few Important Notes before discussing Basement Construction Law.

Solicitors are very good at winning clear-cut claims, but a lot less good at getting the damages and costs paid. You could win, get nothing and be even worse off having to pay your own legal costs as well.

Years ago I bought and studied the books. This page is from memory to keep it simple. It should not be relied upon. Get proper legal advice but be wary of point 1 above.

The Construction Act does not apply to work on homes lived in throughout.

The Construction Act prevents claims going to court. Instead they must go to Adjudication. No costs may be awarded at Adjudication. You always pay for your own costs.

If you take your contractor to court, his legal team will roll out millions of sheets of paper. Far too much for the adjudicator to read. To prepare in advance to beat every sheet will cost you £250,000 plus. Therefore, your costs will always exceed your claim. And you might not win anything.

If you are unhappy with your contractor, he is vastly more experienced at stitching you up than you are at winning anything, because he has been stitched up and won nothing from main contractors many times. He already learned some hard lessons, cute tricks and how to lie reassuringly from your first contact.

You can start to look into Basement Construction Law a bit more here: Construction Act Guide.

The last company I held a salaried position in, until about 2002, went bust because the bank pulled the plug after a second main contractor made a wholly unacceptable final offer about £400,000 less than was owed "Or take us to Adjudication".

The company had already borrowed at the bank and spent over £100,000 with solicitors preparing for one hearing. They were nearly ready when the second refused to pay as well. The bank would not lend more for a second fight and sent in the receivers immediately.

Both main contractors told the receivers there were many disputes so the receiver walked away and both main contractors 'won' well over half of a million they no longer had to pay.

My ways save my clients typically 30%. If you think you can enter into a contract with a contractor and save more by cheating even more than 30% then you will not be my client or get my help. Neither should you expect your contractor to have done a good job, because he will sense something and cut more corners than you could imagine.

This report on the BBC News web site tells us that terrible design, supervision, workmanship and inspection could be rife. This is a terrible situation for those caught up in it.

The report says inspections were by Salus (Building Control & Fire Safety Consultants) Ltd and the warranty by Acasta European Insurance Company Ltd.

Conclusion.

My position is abundantly clear.

Do not enter into a contract.

A contract allows your contractor to do what the hell he likes, cut what corners he can and use inferior materials. Because the contract means you cannot interfere except by going to adjudication later.

Pay everyone and for everything directly. If there is anything you don't like, pay them up to date but tell them not to come back.

It is the ONLY way to get your basement built waterproof from the concrete alone.

This does not mean you need to manage full time or do the hard work yourself. It means you pay your manager and you pay the people he recruits.

STOP PRESS

I hope you already noticed the changes to the law from April 6th 2024.

If not, please start on my homepage. It is extremely important you understand them. Ignorance is no defence. Jail time is available for the judge sentencing YOU.

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