LATE PAYMENTS
“Take photos at the start, throughout, and on completion. I’ve had cases where clients contested that items were stolen or damaged, or that cracks or tile damage weren’t pre-existing. Photographs rebut those arguments immediately. It’s so easy – everyone has a phone – and it can be really helpful if your work is complained about.” Before taking legal action When a payment dispute does arise, Carter advises FMB members to follow a structured approach before pursuing legal action. “First, look at the contract. Everything stems from that: the rights, obligations, and duties of both parties. What were the payment terms? Is the client in breach? Can you bring the contract to an end? Termination is tricky, you must do it exactly in accordance with the terms or you risk being in breach. “Check dispute resolution options, including negotiation or mediation. Next, ensure the claim has been properly addressed to the client. You need correspondence – emails or letters. It’s not appropriate to send a detailed analysis via Slack or WhatsApp.” These informal messaging services don’t work, Carter says, because some clients might try to hide evidence. “There’s the risk that if you’ve got a particularly devilish client, they’ll close the account and your evidence will disappear. Make sure everything – messages, photos – is saved. Then set out in correspondence what’s owed, why it’s owed, and any interest. Clients often forget interest is due. “After that, speak to the FMB dispute resolution service. If the client initiates it, the FMB can mediate. And the FMB will usually direct members to us for their free 30-minute call. Exhaust all of that before issuing proceedings. It’s easy to issue a money claim online, but not easy to get out of it once you’ve done it.”
Carter’s tips for prompt payment 1 Use a written contract – FMB contracts are designed for members; don’t rely on a simple quotation alone. 2 Clarify scope and exclusions – be explicit about what your quotation includes and excludes. 3 Document variations – record changes in writing, with cost and timeline approvals. 4 Do client due diligence – check Companies House for businesses or Land Registry for private clients. 5 Maintain evidence – photograph the site at every stage. Save all correspondence. 6 Communicate throughout – if concerns arise about a client’s ability to pay, discuss it openly. 7 Follow dispute protocols – use negotiation, mediation, and FMB advisory services before taking legal action. ON TIME
Late payments, wasted time Time is another cost. Managing unpaid invoices consumes hours that could be spent on business development or project delivery. For many, legal recourse is a last resort, both because of the costs involved and the stress associated with pursuing a claim. Carter emphasises the importance of taking preventive measures before starting a job. Contracts are crucial, but so is knowing your client. “At the outset, think about where the instructions and the client have come from. Is this a referral by a trusted construction professional? That will then lead you to think about what kind of due diligence to apply. “I don’t see many builders doing due diligence at all. It’s more difficult with private individuals, but for a company it’s easy to check at Companies House to
see if the company is active or dormant, if they’ve filed accounts. It’s amazing how many times I’ve caught clients early on and said, ‘This company is actually insolvent or dormant. How are you going to do work for them?’ It’s an easy five-minute check that can save a lot of hassle.” For private clients, check property ownership, employment, and financial position to reveal potential red flags. Carter encourages candid conversations with clients when concerns arise. “It’s better to have that conversation and lose the job than take it on and not be paid.” Other steps to mitigate risk include: clarifying what is and isn’t included in the quotation; setting clear timeframes; obtaining written approval for any and all variations; and documenting with photographs as evidence can be invaluable if disputes arise.
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Master Builder
www.fmb.org.uk
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