WHAT HAPPENS WHEN A CONTRACTOR OVERCLAIMS?

Another practice that places Home Owners at risk is that which occurs when Building Contractors claim more than the value of the work they have undertaken. It can occur when payments are based on reaching certain early performance milestones which are overvalued (it is called front loading a contract) and it also occurs when progress payments are simply over-claimed in relation to actual performance - it is a dangerous and high-risk practice for Home Owners because if the Contractor goes bust the Owner will lose the money for good, or if the Contractor’s work is defective, the Owner will need to recover the cost of making goods and the overpayment from the Contractor – that task is never easy and seldom results in full recovery.

Once again BuildSafe can help reduce the risk of loss from over-claiming by Contractors by requiring Contractors to provide a trade summary in the BuildRight Conditions of Contract.

The trade summary requires the Contractor to set out exactly how the Contract Price is made up in a transparent way that allows the Owner and/or the Owner’s advisers to more fairly and properly assess the reasonable value of any payment claim by measuring performance for each trade against the trade value.

BuildSafe strongly recommends that inexperienced Home Owners employ a building professional, such as a building consultant or quantity surveyor to assess and process all payment claims.