We’ve all heard the stories of the builders who go bust, in fact those stories are becoming a weekly occurrence around the country. The stories though don’t give you the whole picture, they just turn into yet another tale of the bastard builder, and I get it. I understand that people get left in the lurch, that their homes are often left half finished, that tradies go unpaid. I can see how that leads everyone to blame the builder, but what if I told you that this can often be caused by the client and that as the client you can help stop your builder going broke.
Yes that is right, clients can and do cause builders to go under, regularly and today I’ll explain how.
How To Help Stop Your Builder Going Broke
Builders cop the blame for a lot of stuff, in fact if anything goes wrong it is their fault. From a tradie doing something wrong on site, to issues with quality, all the way to going broke and leaving clients in the lurch, it’s all the builders fault.
In our time I have heard it all, from clients, from tradies and worst still from other industry experts who claim to have an understanding of what is like to be a builder, but what you don’t hear is the builders complaining.
I meet with a lot of builders, and never do they complain about the difficult clients or the non paying clients. In fact it’s been somewhat of a dirty secret for years because as a builder it feels like a failure if you have a client that is less than ideal.
A few weeks back I shed a little light on an industry issue with bullying from client to builder and how it can impact a family, this week we are looking at the impact of not paying bills. Because you’ll hear about the builder going broke, but you wont hear why and I’m here to tell you that clients nearly always contribute to this issue.
I recently heard yet more perpetuation of the age old bastard builder story, in which everyone was being told to thoroughly investigate your builder before you sign a contract to build with them. While yes I agree with understanding your builder’s position, especially in states other than Queensland, there never is any mention of how important a role the client plays in this, or how you can help stop your builder going broke.
Now before I get spammed with hundreds of emails, I understand this is an emotive issue and I am not saying it is always the clients fault or that the builder is never at fault, I am simply sharing another angle to the story.
Here is the part of the story they don’t tell you. Builders are required to carry the majority of the cost of your build/renovation/extension, up front. Often this results in tens if not hundreds of thousands of dollars of work and stock being paid for by the builder long before you as the client needs to pay.
Mostly as builders we are prepared for this with trade agreements, and supplier agreements, but when a client is late to pay, the whole thing can come tumbling down, and very quickly. Builders work on extremely tight margins, and there is little opportunity to make up a loss once occurred, they are often strung out nearly to the wall to keep jobs ticking over, and what happens when a client is slow to pay, is that the weight of all the balls in the air gets too heavy and often they drop.
What happens from there is always labeled as the builders fault, the builder goes under, the clients house is unable to be finished and the tradies don’t get paid.
As a client, you have a contractual responsibility to pay your bills on time. By doing so, you can help stop your builder from going broke. Builders have a contractual responsibility to build your home and to build it well. If we all play our part, we minimise the chance of these horrible issues arising.
Just as you the client don’t want your project to run into trouble and your house not completed, the builder doesn’t want to loose their home either.
A word on the worst case situation, insurance is in place for the home owner to ensure that their project will be completed. In Queensland the job cannot be started without this insurance in place. Your home will be completed, though once the regulatory body steps in there will be a very different time line, that said a client you are protected.
This post is not to assign blame to any one party, but to shine a light on an industry issue that so many wont. I welcome healthy discussion, however I wont tolerate builder bashing, just as I wont allow client shaming.
As always there are rouge builders, bad tradies, but it is also important to not there are bad clients.
If you’d like to know more about the checks you need to have in place to ensure your builder has completed all the work require prior to paying your invoice, head on over to our Inside the Build registration page, and register your interest now.