Regulation and
Enforcement in
the Building Industry
UK Contractors Don’t Need a License
In order to gain quick insight into the UK residential building industry, it is helpful to consider a significant difference between the regulation of building contractors in the United Kingdom versus another country with a comparable market, such as the United States of America. In most states of the USA, a building contractor working on residential homes requires a licensing number. The builder must prove his or her qualifications to attain licensing and must adhere to industry standards in order to retain it. Obviously, this does not mean that building contractors automatically adhere to rules regarding safety, the quality of workmanship and the fair treatment of clients. But it helps.
Speak to a UK based RICS building surveyor, and you will hear hair-raising stories you about the implications of the absence of a centralised regulatory body for building contractors: tales of the Wild West. Tales of divorcees being physically intimidated by their builders to pay tens of thousands of pounds that they are not due, tales of a contractor’s hidden changes to an engineer’s structural drawings to save £600, tucked behind a cellar wall, requiring a revision that costs £250,000, and tales of everything in between. These are the dramatic cases. More troubling are cases that are considered “normal” such as, builders who extort extra payments of thousands of pounds, and who leave behind poor workmanship that appears only years later never to be repaired.
Builders Aren’t Bad
This does not mean that builders are worse than other professionals. If there were no legal requirement that your dentist be licensed with the General Dental Council, you would also be concerned that they were not properly qualified. You would doubt whether you really needed the extra fillings.
Limited Companies are Perceived as Easy to Wind Up
Builders in the United Kingdom typically work with a limited company, which costs no money to set up and costs little to close. It is a widespread conviction among builders that declaring the insolvency of a limited company in order to avoid a punitive court hearing is no big shakes. Instead of putting a damper on rapacious commercialism, the threat of insolvency appears instead as a surmountable nuisance. There is little fear that the insolvency of a limited company will damage a director’s reputation and dampen future business prospects. Whilst it is true that a prospective client can research a director’s past companies on the Companies House website there are few clients who actually do so. Consequently, builders are prone to think about maximising their earnings in the job they are doing right now.
Public Liability Insurance is not Professional Indemnity Insurance
In their contractual negotiations with clients, builders tend to boast about public liability insurance exceeding £5 million. Prospective clients are meant to get the impression that if anything goes wrong with their build that they are covered. This is a mistake. It does not cover professional negligence like professional indemnity insurance in other industries.
Builders Societies and Federations
Builders advertise credentials with specialised building federations, such as the Federation of Master Builders. Unfortunately, clients tend to misunderstand the protections this affords them. Firstly, in our experience, there are numerous builders, who fraudulently advertise their affiliations with building federations, when this a flat out lie. Either they have never been affiliated or their affiliation has expired. The punishment for builders advertising falsely oftentimes amounts to being published on a list on a sub page of a Federation website for incorrectly advertising affiliation. In the event of a dispute, the Federation of Master Builders cannot dictate to a member to remedy damages and return monies. Following an internal procedure, the Federation can revoke a builder’s federation membership and affiliation. But then, the logo is already on the van…
Websites with Client Reviews
Websites such as Mybuilder and Rated People can be a great way to find a builder. However, the reviews on their websites should be understood in context. Here we speak only from our experience. Our clients, who have felt abused and intimidated by their builders, tend to conclude they will have no benefit and only aggravation if they leave a poor review. There is concern that a poor review will likely cause a builder to refuse to honour warranty obligations. All in all, a homeowner’s transaction with a builder is not similar to purchasing socks on Amazon anonymously.
Conclusion
There is no replacement for the third-party expertise of a quantity surveyor or project manager.All substantial builds require regular surveying by an objective party.