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Builder tricks to watch out for on a home extension project

Experienced builders are well versed at exploiting naivety in home owner clients in order to improve their margins on a house extension scheme. They realise that when placed in a completive tender situation they are in competition with others and they will have a very sharp pencil for their tender submission price.

However, once they have been engaged and installed on site, any extras or variations WILL NOT be priced with the same competitive edge - out comes the blunt ‘extras pencil’ for their pricing to make up on their original reduced margins.

This trick is relatively well known but there are other builder tricks that are a little more subtle but still very effective at extracting extra costs from the home owner having their home extension built. Scheduled below are just some of the ones I have experienced:-

1 - The low PC sum trick - This is where a builder has qualified his tender price with a prime cost sum (PC sum) for either materials, trades or both. A classic one is to state a low pc sum for the bricks and tiles knowing full well that the actual cost of the matching bricks or tiles are 20% more expensive. All PC sums are adjusted to actual invoice figures plus a margin. This can be further abused by stating a PC sum of £2k for other stuff like the electrics or plumbing and then an invoice form the builders sub-contractors is suddenly produced for twice this amount. How can a client dispute this? - it is very hard. One way around this is to remove the builders PC sums before signing the contract & stating that all works & materials are deemed to be included within the main contractors tender price or stating that the builder MUST produce at least 3 quotes from a variety of suppliers / trades before engaging / purchasing any materials or services.

2 - Talked into variations or extras - This trick involves the builder explaining options & alternatives to the client for an element of work but not explaining that there is a cost increase implication. This normally happens early in on the scheme before the homeowner gets wise. An example could be the builder stating his concerns over the size of a chimney breast opening for the living room extension but not making clear that the flue diameter also needs increasing with the resultant increase in costs & work elements. Clever use of phrasing by the builder suddenly makes this a client instruction for a variation that has an extra cost attached.

3 - Stating main contractors margin on extras within the contract or tender documents - All builders need to make a profit but their margins may have only been 5% to get the job but then place 25% margins for any extra works. This trick can extend to any client stated prime cost sums (PC sums). A clever phrasing within the contact can suddenly allow the builder to add 25% margins on top of any client stated PC sums. Some builders even demand including a builders margin on the clients PC sums if the PC sum is removed or given to an external client nominated sub-contractor. Kitchen units & installations are a classic example of a PC sum that could be removed for another trade to supply & install at the request of the home owner which is outside of the main contractors control.

4 - The claim for extra ‘prelims’ monies due to extended time of contract - All builders have what is called ‘on costs’ or ‘preliminary costs’ which is to cover things like administration, office , toilets, insurances and the like. Many builders will break down their costings of the home extension works to show an element for this sum which is normally around 5 to 10% of the contract price. If the works go on longer than the stated contract period for what ever reason, they could claim an extra cost for their additional prelims costs as well. This is often referred to as ‘bottom scraping the job‘. Most good and reasonable builders will not try this.

 
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