June 2008

Most members will have heard the recent story of the Sussex builder who, frustrated by the lack of payment for a conservatory and porch he had built for a client, decided to take matters into his own hands.

Sussex builder Nigel Gray, demolished a front porch and dismantled a conservatory piece by piece that he had built for a client after she failed to pay him.

He had carried out £15,000 worth of work on the home of Anita Dovey, a tenant of Adur District Council. She had permission from the council to make improvements to the house, but made endless excuses and missed deadlines for payment requested by Mr Gray.

Eventually, with support and consent of the local council, Mr Gray demolished the porch and took the conservatory down piece by piece, but the question remains: legally, if you carry out work for a client who refuses to pay when you send the invoice, where do you stand?

What remedies are available to a builder when he has carried out work for which he has not been paid?

The main recourse open to a builder when his client fails to pay for works carried out, is to issue Court proceedings seeking a judgment for the monies owed. If the claim is for £5,000 or less, a Small Claims Court or the County Court can be used, or if the claim is over £50,000 the High Court. Whilst litigation has a reputation for being expensive, you may be able to use the Small Claims Court, which is relatively fast and cost effective. If the client does not have good enough reasons not to pay, then you can expect to receive a judgment against him. This will normally result in payment failing which means the client’s credit rating will be affected.

An alternative is to serve a Statutory Demand threatening to bankrupt the client (or in the case of a company threatening to wind it up). However, where the client can demonstrate a prima facie dispute then this route will not be appropriate without a Court Judgment, since the debtor will be entitled to set aside the Statutory Demand and seek costs from the builder.

Adjudication is available provided there is an adjudication clause included in the Contract, or in the absence of a written adjudication clause, if the prerequisites for statutory adjudication are present, including that the property worked on is not the client’s main residence.

So is the builder entitled to take away or demolish materials supplied?

In general, once materials are fixed as part of the permanent works, the maxim “quicquid plantatur solo, solo cedit” applies. Roughly translated this means “what is affixed to the soil belongs to the soil”. The ownership of the fixed materials, therefore, passes to the owner of the land even if he has not paid for them. As a result a contractor has no form of security over fixed materials and his only remedy for sums due under the contract is to sue the client.

Furthermore, a term within the contract that the ownership of the materials is to remain that of the contractor until payment is received is ineffective once the materials have been fixed. Such a term is called a ‘retention of title’ clause and these are common in contracts for the supply of building materials and can be effective to deprive the client, main contractor or sub-contractor of the ownership of materials in certain circumstances. However, once materials are incorporated in the structure being built and in this way become fixed to the land, the retention of title clause will fail. Indeed demolishing someone else’s property is likely to amount to criminal damage and lead to a criminal conviction and criminal record.

The FMB Information Department is preparing an Information Sheet for members on materials ownership and nonpayment by clients. Please contact the FMB Information Department for further information.

Tel: 0870 162 0947
Email: information@fmb.org.uk 

FP ref: 3957-FMB-0807