building work reasonable “unforseen costs”

we’re having a large extension done, the total cost for which is significant (slightly north of £250k). The project has gone massively (150%) over the original timelines, and I suspect the builder underestimated and has got a bit stung by the work.

The contract included provision both for “variables” (to cover unforseen costs) of £6k and “price increase contingency) of around £7k (as prices were very volatile when we started).

We’re approaching the end of the work, and the builder is telling us all that money has (almost exactly, by coincidence) used up. A small amount is material increase (£500) which we’re fine with, and some other stuff (our original structural eng didn’t do the right steel calcs, so they’ve had to put more steel in) we’re also good with.

A larger sum of money (and delay) has come from the fact they tried to extend the existing truss roof with more trusses – this didn’t work as the existing roof was not bang on square – something that (talking to other builders) is not hugely unusual – they’ve ended up having to bin the trusses the bought and do a “cut and pitch” roof instead. This is somewhere around £6k

Additionally, the builders are asking for extra money for the foundations (which ended up as 1.2m deep (2 story extension) – they’re stating this is more than the 1m deep they allowed for, despite the structural eng actually specifying 1.8m (adjustable to building control needs) in the spec. This is somewhere around £1500

The builders are saying both of these should be covered by the variables sums, but it feels like a not-quite-straight roof and a foundation depth that was actually less than what the structural eng requested were reasonably forseeable.

This is the first time we’ve done such a large job, I was wondering if folks had advice on what should/should not be a “forseen cost”? Building work like this seems massively variable, so the builder is naturally swallowing some unforseen costs, but not others. We don’t want to nickle-and-dime them, but also don’t want them to take the piss out of us.

don’t look at individual costs, what is the total amount % of unforseen vs the overall budget.  I’d say if your within 5% then thats not actually that bad.

I got stung for having to underpin a section of the house which was going to take a beam.  Strictly speaking not identified by the s.engineer but recommended by the builder to be safe.  Also extra concrete for the foundations as b.control wanted them deeper. due to clay soil

FWIW, it very much depends on how the job was priced (was there a detailed spec and/or drawings), and the wording of the contract (if there is one). In my opinion, I’d say the foundation depth should not attract an extra cost. There should actually be a reduction as the builder should have priced for the depth specified by the engineer. I think it’s reasonable to charge for the change to the roof, unless the tender documents clearly placed the onus on the builder to design the roof. Ex chartered surveyor here…….

Simple. What was the agreed foundations / trusses etc at the start of the project? Any variance can be claimed for except anything that they screwed up/ didn’t see etc cannot. eg if the engineer said 1800 deep founds at the start that should have been costed. If walls are not straight they should have site measured before ordering.

What the professional up there said!

sounds a bit like they are at it and using your contingency sum to pay for delays and mess ups.

that said if you didn’t have the design and detail wrapped up at the start it’s a bit of a blank cheque

Have you ever watched Grand Designs!? 🙂

thanks for the help so far.

The roof design was entirely with the builder – my architect had tried to get a truss company to design one up and they refused because they thought it was unlikely to work. Builder had originally wanted to go cut-and-pitch (which I understand there isn’t a design for) for the whole thing, but changed their mind later, I have a (written) message stating

we’ve decided to get the roof designed and ordered as a truss roof. This is costing me a little bit more than our estimate but I won’t pass this on as it will give us back a couple of weeks in time

As it happens it slowed the whole thing down (as they tried, and failed, to figure out how to make it work), and is now costing us more

the total overage is close to 5%, which seems reasonable (and we had budgeted for) – but if the excess hasn’t really been spent, we’d rather spend it getting a decorator to do the painting.

It rather sounds like a “them” problem, but if you can afford a £250k extension then you can afford a £260k extension and I wouldn’t be complaining too loudly. If it does take you way out of budget then, isn’t there insurance for this sort of stuff?

Admitedly my only reference is Grnd Designs, but anything under 10% of budget is a win.

The cost is roughly the value of my house, so if your extension is not a complete 4 bed detached house with single garage and parking for four cars, you may have been ripped off after all.

The cost is roughly the value of my house, so if your extension is not a complete 4 bed detached house with single garage and parking for four cars, you may have been ripped off after all.

I’d love to be able to buy a 4-bed house with garage and parking where I live for £260,000.

I expected a little begrudging on the overall price. Its a lot of money, but its adding 120sqm to the space, and its south east pricing, so actually not terrible value for money. We can afford the cost with the overspend, but we can’t afford the cost and paying for a decorator to paint it. I’d rather have a painted extension than an unpainted one.

The grand design comments are fair, but most of the projects that go way over budget have been project managed by the owner. The ones that go well\on budget are the ones where the entire job has been sent out to a primary contractor, which is the approach we took.

the wording of the plans simply says “Timber roof design by builder” – we didn’t provide any direction ourselves as to truss vs cut and pitch.

I’d love to be able to buy a 4-bed house with garage and parking where I live for £260,000.

Move.

That’s 100k more than I paid for a 5-bed (though no garage / drive).

Paint it yourself

They want 7k, offer them 4k with reasons, and end up somewhere in the middle…

They want 7k, offer them 4k with reasons, and end up somewhere in the middle…

This sounds like a reasonable approach.

Notwithstanding any contract terms to the contrary, unless there’s a measured bill of quantities or some other sort of rate schedule in place then it’s likely a lump sum, in which case if the change is instigated by them and/or part of their design responsibility then the cost is on them. If it’s instigated by you or somebody representing you then the cost is on you.

That “variables” allowance is tricky though. Sounds like a provisional sum of sorts, in which case you’d expect it to be revalued and paid for by you when the detail is known, but “variables” is such a broad description that it could apply to pretty much anything, and you were likely always going to be on the hook for it.

I think I’d be tempted to argue first of all that “variables” means variations instigated by you, which neither the roof nor foundation changes were, and see how they take it.

the contract is for the whole job (based on the designs and scope of work we/our architect put together). the definition in the contract is

The ‘Variables’ amount is to cover unforeseen costs. If this is not required it will not be charged in the final invoice.

there are a couple of places where we’ve made design/spec changes (ie different tiles somewhere, replacing the blockwork somewhere where it was pretty poor to start with) – and we’re perfectly happy to have paid for those.

fwiw this is what the extension budget would buy round here (on the intersection of the 2 busiest roads in the area, opposite a busy pub). a 4 bed house it is not 🙂 https://www.rightmove.co.uk/properties/149794787#/

I am just getting a build project started, tbh a 10k extra on a 250k project i would be OK with as long as the builder had raised it as he identified it.  I wouldn’t want to be paying for his Christmas party.

If you are happy with the work and can afford an extra 10k I would just press on.  You really don’t want to fall out with the builder at this stage.

Good luck and I hope you get it resolved.

If you are happy with the work and can afford an extra 10k I would just press on. You really don’t want to fall out with the builder at this stage.

I think is the sensible and pragmatic approach.

i would be OK with as long as the builder had raised it as he identified it.

well this is also somewhat a bone of contention, they didn’t tell us the roof was costing a total of £9k more than expected (there’s a few things in there) until it was done. Prior to that they’d just said “its taking longer than we thought”.

You really don’t want to fall out with the builder at this stage.

quite. Up till now we’ve said we don’t think we should be paying that much, they’ve said they think we should, and that’s that. We’re still paying for work as it continues on – if we choose to raise/dispute it we’ll do that when they ping the final invoice over (ie when the building work is done). The contract has mention of this for abitration which appears to be a fairly standard thing.. https://www.jctltd.co.uk/docs/JCT_CIMAR_2016.pdf

they didn’t tell us the roof was costing a total of £9k more than expected (there’s a few things in there) until it was done. Prior to that they’d just said “its taking longer than we thought”.

Hm.

I think in which case my stance would be “we’ll pay this but don’t do it again or it’s coming out of your own pockets.” Undertaking additional work without your sign-off isn’t on.

How off square would the existing trusses have to be before it affects the pitch of the roof, half a metre I can see a problem but much less than that? Couldn’t the new ones go in off square and just the gable end one altered? I’m stabbing in the dark, I really don’t know the answer!

If they had the engineer’s drawings showing the depth of foundations when they quoted, and decided to price on 1.0m instead of 1.8m, they’re lucky they only had to go to 1.2m; I don’t think they have a case to claim a contingency.

Similarly, if they priced the roof on cut and pitch, then decided to change to trusses and it was a bad call, it was their call, not yours, so it’s their cost.

In your position, I’d be tempted to stress those points to them but say you’ll offer them an extra £x without prejudice in the interests of good relations if they agree not to pursue it.

personally it doesn’t sound to me like you are technically on the hook for these costs – what is the dispute resolution method in the contract?

Can you afford for them to walk off site in a strop?  Will he have another job to immediately go to?  Presumably you have a final payment on completion – how big is that?  How long is left to go on the project and do you believe it?

none of those affect whether you should be liable for the costs but they are probably factors in your decision!

personally if the project was 1.5x overdue through no fault of yours, if I was going to give him any more money I’d be making it contingent on hitting agreed milestones.

possible compromise – this is your decorating budget, he will have or know decorators – offer to pay the full amount if he gets the decorating done?

Foundations one is bullshit, I’d argue that.
If it’s taken twice as long to do I’m surprised they haven’t gone under.

Have you got a good relationship with your builder? Has he done the job well? If so have an honest friendly discussion. It sounds like he might have made a mistake or two but to be honest if that is all that you have gone over budget by at the end of the job then it has generally gone quite well.

There will need to be compromise on both parties, if he has worked hard and delivered the extension you wanted then be thankful as there are plenty of horror stories out there.

It is hard at the other end of a keyboard to get the complete picture so have that discussion.

How off square would the existing trusses have to be before it affects the pitch of the roof, half a metre I can see a problem but much less than that? Couldn’t the new ones go in off square and just the gable end one altered? I’m stabbing in the dark, I really don’t know the answer

The issue was with the trusses that sat on top of the existing hipped end to extend the ridge. The hipped end was slightly bowed (the middle was maybe 1 inch further forward than the edges). This meant that when you tried to sit the brand new, “square” trusses on top of the existing, bowed line, they don’t sit right. The builders don’t feel comfortable bending them to fit, so they had to be skipped.

We found all this out after the roof was done. Speaking to other roofers, this kinda thing is exactly why you never put trusses on an existing roof. The house is 9 years old so I guess that’s why they took the risk?

What does your architect think? This is one of the things they are meant to have a handle on and in the end the relationship to the architect is more important to the builder than their relationship to you so they have more leverage. For me though if you are only 5% over then that is a big win.

There will need to be compromise on both parties, if he has worked hard and delivered the extension you wanted then be thankful as there are plenty of horror stories out there.

This. Agree the full amount but hold 50% of the overspend back for snagging, to be paid in full in six months

The ‘Variables’ amount is to cover unforeseen costs. If this is not required it will not be charged in the final invoice.

That’s an unusual approach which might give them some wiggle room to argue that the costs were literally unforeseen, although it sounds like in both cases they took risks knowing there was a chance it wouldn’t work so I’m more inclined to think the costs should sit with them.

Look at it the other way, if the initial attempts had succeeded and they’d made a saving, do you think they’d have passed the saving back to you? Unlikely I would imagine.

As others have said the foundations thing sounds like nonsense.

They wanted to make the foundations nearly 50% smaller than the structural engineer specified? And then complained about having to make them bigger, but they’re still 1/3 smaller than spec? Tell them (politely 😉 ) to F off and that they’re accountable when the house falls down.

Maybe this can be the compromise and then pay them in full for the roof. Anything to get the job done asap in the best way and with the minimum of fuss. Last thing you want is them thinking “I’m fed up with this guy and his stupid house” and doing a cowboy job on the remainder of the work.

Does the contract allow for liquidated damages? i.e. does the builder have to pay you compensation for late completion time? This might give you some bargaining power………………

its adding 120sqm to the space

That is mahoosive! Have they built a hanger on the side of your house 😉 ?

What does your architect think? This is one of the things they are meant to have a handle on and in the end the relationship to the architect is more important to the builder than their relationship to you so they have more leverage. For me though if you are only 5% over then that is a big win.

the architect was only employed to do the plans, not be engaged at this point. He’s still helping us out a bit, but not professionally involved.

They wanted to make the foundations nearly 50% smaller than the structural engineer specified? And then complained about having to make them bigger, but they’re still 1/3 smaller than spec? Tell them (politely ? ) to F off and that they’re accountable when the house falls down.

yeah what’s interesting is they’ve said that they didn’t take the structural eng’s stuff (which they did have before we signed contracts, but didn’t change the pricing based on) into account when speccing the foundations (less were needed in the end at BC advice) – but we are on the hook as the original structural eng hadn’t specced enough steel and another was needed. I figure we should reasonably pay for either everything based on the structural eng docs (ie pay for the steel, but not for the foundations) or everything based on the builders thoughts (ie pay for the foundations, but not for the additional steel), but not a combo of the worst of both.

Have you got a good relationship with your builder? Has he done the job well? If so have an honest friendly discussion. It sounds like he might have made a mistake or two but to be honest if that is all that you have gone over budget by at the end of the job then it has generally gone quite well.

its not one builder, but a firm of (I’m guessing) 10-20 employees – the financials and the contract stuff are all done by the owner, but otherwise we deal with a site forman.

The job started in march, the project plan shows completion in august. We’re currently looking like next march (so 12 months on a 5 month spec). They’ve messed up a few things (not being mentioned here), and lied about a few things to try to cover their tracks, but those things they’ve eventually made good on (after we forced it). We’re on good terms with the guys on site, and aren’t pushing the dispute at the moment as we want them to finish off with a good level of quality, then agree what we’re actually paying for.

Does the contract allow for liquidated damages? i.e. does the builder have to pay you compensation for late completion time?

sadly not, there’s provision in the contract but its rated at £0/day

We’re currently looking like next march (so 12 months on a 5 month spec). They’ve messed up a few things (not being mentioned here), and lied about a few things to try to cover their tracks, but those things they’ve eventually made good on (after we forced it). We’re on good terms with the guys on site, and aren’t pushing the dispute at the moment as we want them to finish off with a good level of quality

IME (quite a lot over the years) this is all absolutely normal. Sadly. What is they say when looking at builders’ quotes?

“Double the price and triple the time”

Following this with interest as I m about to embark on a similar project.  The builder told me at the outset he s not the cheapest but all the cheaper quotes will work out more in the end.

If this project were mine the first red flag would be the non acceptance of the structural plans, then the time overrun.

To progress you really have to talk to the boss, maybe agree a remedial plan with a surveyor with the surveyor costs 50:50, but with a binding outcome.  I know a good surveyor in Kent if you want his details, this sort of thing must be his bread and butter.

I wish you all the best the stress must be doing you all in.

Just to make you feel a bit better.  In brief the tale of my building and the council statutory notice

I live in a big Georgian building with multiple owners.  It needed serious stonework repair.  This was done by the council under stat notice as the owners could not agree.  It was supposed to have cost £400 000 and take 12 weeks.  After 5 years the bill was pushing 2 million and it was still not complete.  Every room in my flat was damaged and all my windows.  MY share should have been £30 000.  they came after me for £150 000

so yours has gone wrong and over cost a bit.  It could have been a lot worse 🙂

5% over is pretty close to bang on I’d have said, I wonder how many folk on here don’t mind paying that 10-15% added to their food bill to save the restaurant paying proper wages ?

Move.

That’s 100k more than I paid for a 5-bed (though no garage / drive).

Knowing where JD lives (in the North) he’d have to move a long way to buy a 4 bed with garage for 260k. If you’re happy to uproot your family and leave all your friends for a cheaper house then fair enough but plenty won’t.

Agree with much that’s been said, the builders seem to be trying it on but not taking the piss so depends how much effort you are willing to put in to saving a few quid?

Disagree with whoever said if you can afford 250k you can afford 260k. Why? A budget is a budget and can be finite.

they’ve said that they didn’t take the structural eng’s stuff (which they did have before we signed contracts, but didn’t change the pricing based on) into account

The important point is not whether they had the information, but whether it was part of the invitation to tender, ie, does the contract require them to do the work in accordance with it?

The LDs being £0 is probably not significant, as LDs are not enforceable unless you can demonstrate financial loss (not inconvenience) as a result of the delay.