Archi vs Builder - certs for requisition

dellas1979

Hi all,

This is mortgage related. But feel its better here, as more people building on this forum.

Building a house. Using a contractor. So far, so good.

Had a bit of an issue today. During the week, the archi certified 20k to requisition. The builders invoice is for 25k.

The archi told me he believed that 20k of work was done. The builder believes they've 25k of work done.

Diddums here caught in the middle. The builder spoke to the archi. The archi wasnt very impressed. I do trust archi. The builder is also doing their job.

People have been telling me "well, if that's all the archi certified for, that's all you can give the builder".

I have a few k saved (to pay for water, fees, etc).

I dont know what to think or understand. Am worried the builders will walk off the site if I dont fin 5k somewhere.

The chat between the archi and builder did not go well. Archi feels like they were being pushy.

The builders did provide a breakdown of payments at the start. Archi hasnt said anything to them.

Archi is certifying for the bank. Builder wants money for job they believe done. I've no idea (or experience) what to do. Bit stressed over it, as I dont know how to resolve! Archi told me "you can pay the balance later." At this stage my brain went into melt down, as I dont have 5k to cover the balance. I dont understand what's going on. Or if this is normal.

How to keep all onside? How do other people deal with requisitions that are less than the invoice?

scwazrh

Should be simple enough to check the builders invoice and see what exactly he is claiming has been completed.The work has either been done or hasn't been.

Its common for architects to stay on the side of caution and also for builders to push the claim as high as possible .If this is the 1st claim they're may be materials on order that the builder is claiming for where as the architect would usually only value the material on site .The builder may also be increasing the claim to cover where the works will be by the time the payment gets to him which could easily be a weeks work value.

If all else fails meet half way cause if the builder walks you will struggle to find a replacement in the current market. 5k is not a massive difference on a project when at stage payments stage

dellas1979

Thanks for reply.

Have already done first requisition - was.a.nightmare (nothing to do with archi and builder-was a right of way access the bank did not know about and solicitor, who was supposed to take care of it, did not - all sorted now).

It "should" be straight forward. It is not.

At the moment, I don't have 5k to pay a balance. I dont even know when this balance should be paid. If Ive to pay the balance each time, am going to have to take out a loan. And Ive to remember, bank will hold back 15% until kitchen/stairs etc is in.

I just dont know how it is all supposed to work.

Each draw down seems to have their own issues.

Looking to see if anyone else has/had this issue, and how it was solved.

As far as I can see, the work has been done. Archi wont listen to builder. Builder is talking to me. I talk to archi - says he will only cert amount of work done...

scwazrh

To solve this you will need to fall back on your contract agreement .Do you have a bill of quantities ? If you do , you can measure the quants of work done and establish the value due that should be paid.

severeoversteer

have been in the builders shoes on this.



if you had received a stage payment breakdown from the builder before work was started it would be a bit nasty to change to interim valuations all of a sudden and the architect should have the balls to have told the builder this.

this is normally where a quantity surveyor would come into play.
architects from my experience don't know how to value work done.

if he is a small local reputable builder it is worth not falling out with him as tradesmen are next to impossible to find at the minute.

DOCARCH

Is the job being done under contract? If so, what form of contract?

sydthebeat

a couple of points:

1. a builder should be expected to be able to carry at least 30 days credit, which can cover most interim cert periods.
2. the staged breakdown of mortgage payments should be agreed prior to commencement and not be left up to individual interim invoices by the builder
3. the architect can only release the value of the "fixed works" on site ie it the windows are on site but not fitted, they cant have finances released on them etc. so maybe its possible the builder is including in his 25k invoice things like deposits of including items not yet fixed on site?
4. mortgage companies generally expect clients to use their own cash deposit first before drawing down the mortgage, and thus the value of works on site should always be more than the drawn down mortgage figure.

scwazrh

Why should a builder be expected to carry 30 days credit ? Builders are not finance companies . if a builder has to give credit to customers who’s going to pay finance costs or the costs of doing credit checks and the associated costs of covering the non payers that will no doubt be encountered.

Certifiers of bank drawdowns need to be pragmatic and ensure timely cash flow for payment to keep work moving on site .
Any builder who does not minimise the risk of non payment to his company by expecting to be paid a deposit and on time should not be in business.its the attitude of the builder or tradesman can wait that has 100s of subbies at the moment hung out to dry across numerous government projects .

sydthebeat

scwazrh wrote: »

Why should a builder be expected to carry 30 days credit ? .

for the very reason stage payments exist....

The moneis can only be released after the work is carried out and fixed on site, therefore the builder is expected to be able to carry this credit period.

Most reputable and well establised builders have no problem carrying this. Newly formed building companies may have.

ustari

As above, you probably have a schedule of payments for your contract?
If so, they shouldn't deviate from this without your agreement and knowledge.

If the 5k for additional, non-scoped work or is it that it will be taken from the next stage total?

Mahogany Gaspipe

The question should be asked if perhaps variations to contracted works or additional works have been instructed and how payment for these is provided in the contract.

severeoversteer

I don't think anybody here can advise you without reading your contract