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  1. #1

    Default Builder with cash flow problems

    Wondering if I'm being over anxious regarding our builder. Our build is about 4-5 months past its 'dead-line'. The builder has been dragging his feet and pulled out every excuse to explain his numerous delays. Usually it comes down to him not having paid for an item/service or just having not paid the tradesman. There are a few tradesman that have decided they will not work with him anymore. But now his staff of over 10 years are leaving and his own builders say they have not been paid and will not be showing up Monday for work . I know he has a cash flow problem.
    The RMBA association has NOT been any help and have not responded to my wanting to complain about this builder. If the roof goes up we will be liable for the next stage payment. What do we do? on the one hand we want progress but Im not sure he will last the race - do I just hand over the money and hope for the best?
    Is there a laywers Trust account that we can keep it in to ensure it gets used on our build or returned to us rather than pay this guy who may be going under? Is there any solution for this sinking ship?

  2. #2
    Join Date
    Aug 2013
    Location
    Rural Tararua
    Posts
    1,207

    Default

    Quote Originally Posted by Jellybean View Post
    What do we do? on the one hand we want progress but Im not sure he will last the race - do I just hand over the money and hope for the best?
    Repeat after me - "good money after bad".

    This is especially true if you are not out of pocket at this stage.

    If it were me I'd have told him to **** off and where to stick his contract.

    Quote Originally Posted by Jellybean View Post
    The RMBA association has NOT been any help and have not responded to my wanting to complain about this builder.
    Remember this word - Racket

    Quote Originally Posted by Jellybean View Post
    Is there a laywers Trust account that we can keep it in to ensure it gets used on our build or returned to us rather than pay this guy who may be going under? Is there any solution for this sinking ship?
    Do you want to keep your shirt or not? Who's interests are you looking after?

    Quote Originally Posted by Jellybean View Post
    Usually it comes down to him not having paid for an item/service or just having not paid the tradesman. There are a few tradesman that have decided they will not work with him anymore. But now his staff of over 10 years are leaving and his own builders say they have not been paid and will not be showing up Monday for work .
    While everyone else is looking out for #1 you are asking us whether you should self nominate to be the last cab off the rank?
    Last edited by MichaelNZ; 18-11-2016 at 11:12 PM.

  3. #3
    Join Date
    Apr 2005
    Posts
    2,467

    Default

    What does the contract say.
    Are there any mentions of time or timely fashion.
    If you want to break or modify a contract, it becomes a legal thing.
    Legal advice is best.

  4. #4
    Join Date
    May 2007
    Location
    Hamilton
    Posts
    3,167

    Default

    Hi Jellybean,

    House building companies get money in advance from their customers, so their cashflow should be awesome! When helping with monthly accounts for builders, we adjust their sales for income in advance, and the last two I have looked at would have over $500k that they have received in advance of doing the work. So their bank accounts look great!

    If your house builder doesn't have cash, there is something wrong!! I would get legal advise and be very careful about paying further amounts in advance

    Ross
    Coombe Smith Property Accountants www.cswaikato.co.nz
    Get the best property tax advice from a chartered accounting firm
    that has specialised in property for 12 years

  5. #5
    Join Date
    Aug 2013
    Location
    Rural Tararua
    Posts
    1,207

    Default

    Quote Originally Posted by McDuck View Post
    What does the contract say.
    Are there any mentions of time or timely fashion.
    If you want to break or modify a contract, it becomes a legal thing.
    Legal advice is best.
    I agree legal advice is a good idea

    But it's not like the builder guy has any money to enforce the contract anyway
    - which given he has likely significantly breached it - may be unenforceable.

    I suggest the OP grow some balls and give the ****head the same level of "give a toss" as (s)he has received.

    My Mother has previously practiced as a lawyer and she has experience in insolvency and just this sort of matter. What I have learned from her and through my own experience - and let's be very clear - this guy is clearly a dud, everyone around him knows that and is bailing out and yet the OP wants to hand over more money?

    There is only one thing they need to know and that's if the money remains in their own pocket that is a very good position. If the money is not that is a very weak position and they sure don't want their money to become an asset of a business which is sinking...

    IANAL (I am not a lawyer) but guaranteed the advice I have given for free is the same as what they will hear should they choose to pay for advice.

    Quote Originally Posted by Jellybean View Post
    Is there a laywers Trust account that we can keep it in to ensure it gets used on our build or returned to us rather than pay this guy who may be going under? Is there any solution for this sinking ship?
    Let's think about this for a moment - why do you think he has any suppliers who will supply him and anyone who will work for him without receiving money (which is in a lawyers trust account)...?
    Last edited by MichaelNZ; 19-11-2016 at 11:45 AM.

  6. #6

    Default

    Thank you all of you. Realise I have been in denial and hoping (unrealistically) that this problem with resolve with time. Ok! so can anyone suggest good construction/property lawyers in North Shore, Auckland? I don't think my regular conveyancing firm does much of this sort of thing and they have not replied to my emails regarding this matter.

  7. #7
    Join Date
    Oct 2015
    Posts
    190

    Default

    Might be worth talking to Ivan from this board. He might be in the city though. I'm on the Northshore as well.


    Would you mind pm me the name of the company? I'm getting ready to build a house too and wouldn't want to be caught with a builder going under.

  8. #8

    Default

    Hello Connor - I've sent a PM. All the best for your build. A long time ago I thought is was an exciting journey - now I just want to see the end of the tunnel!

  9. #9
    Join Date
    Jun 2004
    Posts
    9,120

    Default

    Re the money - have you paid more than the work done?
    ie if you paid the next progress payment for the roof and the builder went bust, say you have paid $100k, would you have $100k of building so you could get someone else to finish the job with the money left?

    Aside from the 1st deposit you shouldn't be paying more for each progress payment than the progress achieved.

  10. #10

    Default

    I'd line up another builder before you ended your agreement with your current one.
    Free online Property Investment Course from iFindProperty, a residential investment property agency.


 

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