Switching builders half way through the job

[biker]

Howdy.

We found ourselves in difficult situation and we are looking for external opinions.

We are in the final stages of an AKL council controlled (building and resource consent, etc) house extension construction. The builder has already consumed 30% more than he estimated, and I estimate he will need additional 30% on top of that to actually complete the construction. There were few minor variations but ultimately the builder is unable to explain this significant cost overrun.
He gave me an option to 'withdraw' i.e. he is prepared to take a loss, but he will abandon the project (i.e. not complete it). Given his recent attitude towards the project and general lack of professionalism that option suits me well, however Im concerned that this might have implications down the line, which I might not be aware of. To make it harder he wants my response within 24 hrs.

I would have to engage another builder to complete the work.

what could the implications of switching the builder at this stage ?
-there are still some council inspections to sign off.
-I would loose any warranty, but then again, given his attitude i would not count on it. The work that has been done is of good quality (council approved), therefore Im not too concerned about that.
-any potential implications with the council down the line ?
-anything else i should be aware of before making the decision ?

Cheers....

[Lanthanide]

I'm hardly an expert, but I'd say 24 hours isn't really enough time to make a decision like this. Why the short deadline? Has he got some other job lined up he'd rather do?

I think you'd want to at least talk to some other builders and see if any are interested in taking it on. You could end up in a position where he pulls out of the build, and then it takes you 3-4 months to find a builder who is interested in completing the job, and even then the ones who want to complete it might be cowboys who have trouble getting other work and that's why they're available.

How much is there left to do on the job? What city is this in?

Also saying 30% cost overrun sounds bad, but if the job is only $10,000 to begin with, then $3,000 over-run is within the realm of reason. But if it's a $100k job, then a $30k overrun is quite significant.

[biker]

thanks for input.

you are right, i also do feel like he wants out. yes, i do realize it will take time to organize a builder to complete the work, it might take months, im not concerned about that. I am experienced with builds like this and and know what needs to be done, how to do it and how long it will take. I can supervise a cowboy. remaining work is straight forward however given my circumstances i do not have time to do it myself and im not an LBP.
it's an about 100k job, so overrun will be ~50k

[Bob Kane]

Never, ever keep a tradesman on against his will.
If you are having problems with him, and he offers to go, let him leave.

[jimO]

i would get the job checked over by whatever assn he is a member of MB or CB then talk to MBIE about the ramifications of another LBP taking over the work because no way is the new bldr going to accept any warranty with previous bldrs work

[John the builder]

i would get the job checked over by whatever assn he is a member of MB or CB then talk to MBIE about the ramifications of another LBP taking over the work because no way is the new bldr going to accept any warranty with previous bldrs work

It seems to include restricted Building work (RBW) if so an LBP needs to sign off with hois record of work. Get this from the 1st builder now that clearly describes the work he has done Make sure council are Ok with that

otherwise you might have trouble with a CCC at end.

I agree let him go but get legal advice on how to cancel the contract. (something may not have been done right? you may have address against cost overrun)

[biker]

otherwise you might have trouble with a CCC at end.

this is an example of potential risk. surely, processes must allow for issuing CCC even if the builder who has done the work is not available to comment/provide details for whatever reason. [edit] after all council does all those inspections for a reason. And i see the inspectors are good and thorough, surely this mean council is satisfied with the work to date and will not query it later ?

[John the builder]

this is an example of potential risk. surely, processes must allow for issuing CCC even if the builder who has done the work is not available to comment/provide details for whatever reason. [edit] after all council does all those inspections for a reason. And i see the inspectors are good and thorough, surely this mean council is satisfied with the work to date and will not query it later ?

Changing builders would not be unusual but needs to be considered. I would discuss this with council and what makes you think the inspections were all called and thorough?

This might only show up at a final inspection?

yes but the inability to get a RoW could complicate the CCC process. Perhaps all the RBW is complete? perhaps the current builder is not an LBP? Is the one you want to finish an LBP?

[biker]

What is a "RoW" ? Current builder is an LBP. I know inspection have been done because I have BC paperwork and I see them being ticked off and and get notifications from the council after inspections were performed, and they all got 'pass' or 'partial pass' in few cases. The ones with partial pass have been resolved also to satisfaction. But i will follow up with the council tomorrow.

[jimO]

What is a "RoW" ? Current builder is an LBP. I know inspection have been done because I have BC paperwork and I see them being ticked off and and get notifications from the council after inspections were performed, and they all got 'pass' or 'partial pass' in few cases. The ones with partial pass have been resolved also to satisfaction. But i will follow up with the council tomorrow.

ROW record of work

[Jerk]

Do you have a contract?

[Meehole]

Do you have a contract?

$100k job should have a contract and a payment schedule. He should have given you a breakdown of when he expected payments relevant to the work done. Did this happen?

[biker]

Thanks for all the replies.
Yes, there is a contract outlining several stages and expected costs of each. In fact I only realized that this are going off the track after first few stages cost more than expected. Of course contract states that if there are any variations and other necessary works (and unless its a 100% new build there always are), then these will be extras. We generally agree with this because it also allows us flexibility, eg. I have input as to how to do certain things, (i.e. not the cheapest possible way) and we have better choices of materials, etc.

I have managed to work out an agreement with him, where remaining work will be completed at fixed cost at very discounted rate. At the end of the day we are spending more than anticipated, however there have been some variations, while finding another builder that is willing and available and does not charge astronomical rates is just too hard at the moment.

I appreciate the input.
Thanks.