How to spot cowboy builders

Cowboy builders are the scourge of homeowners. But the threat has worsened in recent years with increased demand for home improvements and a shortage of labour and goods. Here I explain how you can avoid dodgy builders and questionable contractors.

Costs for construction work have soared in recent years. In the two years since the pandemic, building materials rose 43%, while labour costs went up nearly 10%, according to the ONS. Amid uncertainty in the property market, we’ve been investing more in doing up our homes.

In this environment, with more homeowners fighting over a smaller pool of available workers, scoundrels flourish. It has led to a catalogue of unfinished contracts, disputes over the quality and expense of work and businesses going bust while holding your cash. So how can you protect yourself?

In this article, I cover:

• How should I pay for building work?
• Should I get a written contract?
• How do I prepare for delays?
• How do I find a good tradesperson?
• What are the insurance options?

Subscribers to The Times can read about how a rogue builder was jailed after scamming vulnerable customers out of £650,000.

How should I pay for building work?

It puzzles me why so many of us still agree to pay builders and contractors in cash. Every year I hear from countless readers who have done precisely that and found themselves in a dispute.

All responsible builders and contractors should have the facility to accept debit or credit card payments. If that tiny little van that sells street food, or a local market stall can take a card payment for £3, then a builder can certainly take one for £300 or £3,000.

While charges for using merchant terminals (pay machines) can sometimes be expensive for businesses, there are lots of options these days that are much cheaper. The same goes for payment services such as PayPal, where the charges aren’t really that excessive.

So if a company or tradesperson gives you excuses for not taking card payments, then be very wary. This matters because the way you pay for things directly affects your rights if there’s a dispute and you try to get your money back.

You can read my full guide to your rights when using different ways to pay for goods or services but in summary:

Paying by credit card

Even if it’s only a deposit and not the full amount, paying by credit card gives you the most rights if anything goes wrong.

If the goods or services aren’t provided, are damaged or not as described the contract is not met or the business goes bust, you could get par or all of the money back from the card provider. This is due to the wonderful Section 75 of the Consumer Rights Act 2015 which covers you for purchases between £100 to £30,000.

But remember that credit cards come with their own risks.  

Chargeback

If you pay by debit card or for something costing less than £100 with a credit card and there is an issue with your goods or services, then you can ask your card provider to reverse the charge back to your account. This is known as chargeback.

You don’t get the same rights as with Section 75 but it is still a useful scheme. You will need to provide proof of the problem when making a claim and card providers won’t get involved in disputes over quality of work.

Other payment methods

PayPal has a buyer/seller dispute policy, though not if you pay by the “friends and family” option.

Any other method of payment, including transferring money from your bank, means you can’t recall your cash back if a dispute arises.

Card versus cash: The safest way to pay for goods

Should I get a written contract?

Make sure you get a full written contract and not just a quote from the tradesperson before any work begins on your home. In theory, as soon as you agree to the work, some form of contract is made. But oral contracts are hard to prove – so get it in writing!

It doesn’t have to be longwinded and overly formal. You can find are all sorts of online contract templates online but it needs to set out the following things:

• Exactly what work you have agreed
• Plans, drawings and the quote you’ve agreed on
• Duration of the contract
• Working days and hours
• Materials and where they are being obtained from
• Clearing the site and removing waste
• How payments will be made, especially if it is a big job, you might want to pay in instalments

Make sure you sign and date the contract – and get the tradesperson to do the same.

I’m not a fan of paying a deposit for work without some form of protection. So ask if there’s a deposit protection scheme to hold the cash until the work is complete. Pay on a card (ideally a credit card) if you must.

If the builder wants money to buy materials, why don’t you pay for them directly yourself? That way you can check the actual cost. If there is some sort of tradesman’s rate with the supplier, where they can get it cheaper, then how they pay is irrelevant, so don’t be fobbed off with that excuse.

Be clear about what you want

You need to tell the contractors precisely what it is that you want. Be absolutely clear about every aspect of the work you want doing and ask lots of questions.

There is often a tendency to focus on structure when it comes to big builds, but forget about vital components like guttering, plug sockets and access if things go wrong.

Don’t forget to ask about replacements too. If those fabulous fitted ceiling lights stop working in your brand new kitchen, how do you physically change the bulbs and where do you get replacements from?

How do I prepare for delays?

While you hope for the best, always plan for the worst. To do this, you need to anticipate the type of things that can go wrong with your building works. For example, we live on a very rainy island, so ask the builder what happens if rain or bad weather stops work.

One of the more common complaints is about contractors that are working on numerous jobs at the same time. This can leave your house in a state if they are only working on your job part-time. Make it clear in the contract the days (and hours) each week that you expect the tradespeople to be on site working.

While illness is sometimes inevitable, ask what happens if the job has to move back due to sickness? Confirm that your ongoing work will be prioritised when the tradesperson has recovered, rather than going to the back of the queue due to other jobs in the diary.

And finally, ask about who will be on site. This is your home, so you have the right to know who will be in and around it.

Be nice though. The number one grudge from builders is homeowners who don’t let them use the loo. Stick the kettle on and get the nice biscuits out too.

How do I find a good tradesperson?

Before you commit to a builder or tradesperson, do your research. Ask to see examples of previous jobs and speak to a satisfied customer if possible.

Most tradespeople have online reviews, but you can also check out review websites and forums in your local area. Bear in mind some people are never satisfied, so do cut them some slack if you sense a reviewer has a grudge. Watch out for obvious fakes and reviews without pictures.

Check online with Companies House to see if the builder is a registered business. This is no guarantee of good service but you can find out how long the business has been operating, if it’s paying tax and where the owners are registered. This is vital if you are forced to take legal action further down the line.

Remember, though, that a registered business can very easily go bust and reappear in an almost identical form.

Consumer rights UK: How to fight back

Look for trade organisations and accreditation

Unfortunately there is not one organisation covering all tradespeople, but there are many specialist trade and membership bodies that they can be a member of. While this isn’t an absolute guarantee of quality, it can demonstrate that a business or individual has committed to certain standards and practices.

Many membership organisations have mediation schemes which, while not quite the same as an ombudsman scheme, can step in to try to negotiate a resolution if a dispute arises.

Do double check that the person you’re contracting is genuinely a member of the scheme that they say they are. It’s not unheard of for a cheeky bit of cut-and-pasting of logos to happen from some unscrupulous tradespeople. You can usually check this on the site itself.

What are the insurance options?

It’s often overlooked but insurance is vital with any sort of building work. Both the builder or tradesperson’s policies as well as your own.

It’s a legal requirement for tradespeople – or anyone who contracts workers – to have employer’s liability insurance. This covers them if someone gets hurt on the job. If they don’t have this, you could find yourself having to pay out in the event of a claim.

Also ask about public liability insurance if it is not mentioned, although a good contractor will make a point of telling you that they have this.

This form of insurance covers things such as property damage (including your neighbour’s property) and legal liability for the damage or injury to them or you. You can buy this yourself if there’s a problem but do it before the job starts.

There’s also “all risk cover” which covers the many things that aren’t covered by legal liability insurance. This includes damage due to accidents, storms, floods and explosions, cargo in transit and other disasters.

Finally, the builders might offer a warranty or guarantee, but do check the wording as sometimes these policies aren’t up to much.

How to make a claim for storm and flood damage 

You need to tell your home insurer about the nature and scope of the works. This can be useful because it can flush out potential problems with the contractor. There may be an increase in premiums to cover problems with the works but it’s worth it.

Our best home insurance providers

What do I do if something goes really wrong?

While cowboy builders do exist, the vast majority of tradespeople do an excellent job.

But if things go wrong, there’s always the small claims court. The rules vary depending on where you live in the UK, so I have written a guide to help you.

Read more: Is now a good time to buy a house or should I wait?