During the GFC there were countless instances of builders not completing projects and going into administration. Some of the most challenging projects I’ve worked on have involved coming in to pick up the pieces after a builder has gone under.
Once you separate yourself from the stress, here’s the clear process forward to follow:
1. Secure the site. Put security measures in place to protect the materials and works that have been completed and installed.
2. Follow through all the necessary contractual procedures so the contracts set out the parameters for termination and fault and you just have to follow that through. If there’s a contact still in place with the existing builder, you’ll have to close it off. You’ll want to do that as quickly as possible to avoid repeat visits from the administrator who will be appointed to work out how to best recover the money.
3. Contact all the subcontractors. Understand what their financial position is and what works need to be completed. It’s much easier to use the existing subcontractors and consider paying them a small premium to ensure you get all relevant certificates at the end of the job.
4. Material audit. Do a full audit of the material on and off site so you know exactly what’s in your possession and what isn’t. Literally count every sheet of plasterboard, each pallet of tiles, all the lights, maybe there’s a lift, so you don’t get stung paying for it again. Then pass the audit to the new builder. It saves time and money.
5. Reconciliation against the building approval and any previous inspections carried out by the certifier. During this process you want to flag any non-conformances against the building code. I had one recently where we were concerned about the firewalls between units. Sometimes if the stair tread isn’t poured properly with concrete it has to be rectified. Check things like pathways, gradients, firehose reels and hydrants. Identify these things as early in the process as possible.
6. Consultant and subcontractor certificates. Do a reconciliation of what consultant and subcontractor certificates you have for the works completed and what is outstanding. There will always be a way to fix a situation where you don’t have certificates for works that have been completed, and understanding what is missing is the first step in rectification of missing certificates.
7. Reinspection of key elements. We always reinspect the structural works that are complete on any site, including fire engineering, performance solutions for fire services, plumbing and electrical works and certification.
8. Repackaging of scope. Take all of the information from steps two to seven, and repackage it into a scope of works for the new builder—a bespoke handover package to minimise risk, delays and misinformation.
9. Separation of risk. This is always the biggest question: how do we price the risk of what isn’t clear? You don’t know what the previous builder put in the ground. You can’t get away from that risk and there will be things you can’t identify until you are on site with the new builder, trying to get the power to turn on. Accept there are some things you won’t be able to fully mitigate against. Don’t get caught up dealing with possibilities. The time you take doing that will mean you lose more money and time by not starting back on site checking if the electrical wiring is underground. Spending four weeks investigating won’t change the outcome you get. My advice is always draw a line in the sand with the risk, and know the new builder takes responsibility for all the new works. Move forward and deal with any issues from the old works as they come up.
