Spotting Red Flags with Builders

If you’ve been in property investment long enough, you’ll know that not every project goes smoothly. One of the biggest challenges you might face is dealing with a builder who isn’t what they seem. It’s a situation I know all too well.

Several years ago, I was working on a project to convert a maisonette with a garage into three flats. The builder I hired came with recommendations and seemed capable. But as the project progressed, things started to unravel.

Spotting the Cracks

The first sign was his cash flow. He began asking for payments that didn’t align with the project’s progress. At first, I thought it might just be a timing issue, but then I noticed discrepancies between what the builder was telling me and what the subcontractors were saying.

For example, he assured me that certain work was completed, yet subcontractors told a different story. The cracks in his narrative prompted me to ask more questions, and the more I dug, the more inconsistencies I uncovered. Eventually, the builder walked off-site, leaving me to clean up the mess.

This experience taught me a valuable lesson: red flags rarely exist in isolation. If something feels off, it probably is.

Common Red Flags in Builders

Here are some warning signs I’ve learned to watch out for:

1. Demanding Upfront Payments
   While some upfront costs are reasonable, a builder who consistently asks for large payments ahead of milestones may be struggling with cash flow.
2. Poor Communication
   Builders who avoid answering questions or fail to provide clear updates are often hiding bigger issues.
3. Inconsistent Stories
   As in my case, conflicting information from the builder and subcontractors can indicate a lack of transparency.
4. Over-Promising and Under-Delivering
   If a builder guarantees unrealistic timelines or results, be cautious. It’s often a tactic to win your trust before things fall apart.
5. Avoidance of Contracts or Documentation
   A reluctance to put agreements in writing is a major red flag.

Protecting Yourself Before Work Begins

The best way to avoid issues is to put safeguards in place before the project starts:

• Vet Builders Thoroughly
  Speak to past clients, visit previous projects, and check references. Don’t just rely on polished public images.
• Use Clear Contracts
  Outline payment schedules, project milestones, and responsibilities in a legally binding document.
• Tie Payments to Milestones
  Avoid fixed-date payments. Instead, release funds only when specific stages of the project are completed.
• Have a Contingency Plan
  Set aside a contingency fund for unexpected issues, and have a backup builder in mind if things go south.

What to Do When Problems Arise

If you notice red flags mid-project, don’t panic. Here’s how to handle the situation:

1. Pause and Assess
   Take a step back to understand the full scope of the problem. Don’t rush into decisions without gathering all the facts.
2. Ask Questions
   Dig deeper into any discrepancies or concerns. Often, asking the right questions can reveal underlying issues.
3. Document Everything
   Keep records of all communications, invoices, and project updates. My background as a journalist taught me the importance of evidence—it’s invaluable if the situation escalates.
4. Seek Professional Advice
   If the issue becomes too complex, consider mediation or legal advice. Sometimes, an outside perspective can help diffuse the situation.

Want to Go Deeper?

If you’re facing a builder dispute or want to ensure you’re fully prepared for your next project, I’ve created two exclusive resources to help you:

1. Free Video Series: Mastering Property Conflict Resolution
   Gain actionable strategies for spotting red flags, resolving disputes, and handling conflicts with builders, tenants, and joint venture partners.
2. Downloadable Guide: The Property Conflict Resolution Toolkit
   This guide is packed with checklists, scripts, and practical tips to help you navigate property disputes effectively.

Sign up today to access these resources and join my email list for regular insights, tips, and support.

Final Thoughts

Builder issues can derail even the most carefully planned projects, but with the right precautions and strategies, you can minimise the risks. My experience with the builder who walked off-site several years ago taught me the importance of vigilance, preparation, and knowing when to act.

As The Property Conflict Queen, I’ve navigated my fair share of challenges, and I’m here to help you do the same. Let’s tackle these conflicts together—sign up for my free video series and downloadable toolkit to take control of your property journey.