gregh

We had some building work done, which was finished to our satisfaction recently, and we paid the remaining bill minus a 2.5% retatainer.

The company have just applied for liquidation and I've received a letter from the electrical subcontractors that they used saying that they haven't been paid by the company, and that the goods are still owned by them as they have not been paid.

They are saying that until they are paid they cannot issue the IEE completion/test certificate.

As far as I'm concerned my dealings were with the prime contractor and I shouldn't have to deal with any of his subcontractors regardless of payment issues.

How do I stand on this?

cheers,

greg

Luke

Greg

Did you have any direct dealings with the Electrical Contractors??? did you sign any type of contract with them??

Sounds to me as if you are ok.... its their loss. You could IF REQUIRED get another company to inspect and issue.

[Edited by Luke - 3/13/2003 11:13:23 AM]

gregh

>>Did you have any direct dealings with the Electrical Contractors???

Nope

>> did you sign any type of contract with them??
nope!

I think I'm ok as well, but am just double checking!

David_Wallis

you can get someone else to do the BS7671 and NICEIC style tests..

As mentioned.. if you didnt deal with them direct then its not your problem..

David

RaZe-=Buzz=-

and if you get someone else to do it knock it off the retention you "owe". It was part of the contract and you've had to get it outsourced - bill 'em for it!

Tell the elec contractors its tough luck, nothing to do with you that THEIR employer on the contract has gone pop.

Luke

Dont forget to Snigger after you tell them...

scooby-new

Good advice from Raze- I was on the phone to a quantity surveyor friend of mine and saw your problem on the board- my friends advice was exactly the same- get the cert somewhere else and bill em for it.

gregh

already told them that they should deal with the prime contractors. cheers for all the advice, ain't Scoobynet grand

Greg

[Edited by gregh - 3/13/2003 11:18:18 AM]

RaZe-=Buzz=-

Happens to us sometimes - from ALL ends...

people we work for go bust, we're screwed.

people who've worked for us go bust -the creditors want the money from us anyway.

people who the people we've worked for worked for go bust (if you can follow that) and we are told "the client didnt pay the bill, so Im not paying yours" - usually ends up in court and EVERYONE gets screwed..

If you are "lucky" the cost of the work will be "the same" as the 2.5% retentions..

Diablo

Hang on there..

A lot of Scoobynet's advice is somewhat innacurate.

There are a few issues here.

1) The electrical contractor is claiming whats called reservation of title.

If they have a valid claim - which the Liquidator will adjudicate upon they may have a right to recover the installed goods notwithstanding the fact that you have aquired them under contract with the main contractor (the building co) and have "bought" them in good faith from the builder.

Under Scots law such "tracing" does not exist, but it can under certain circumstances exist under english law. It is all down to the contract between the building co and the electrical subcontractor.

Such items cannot be recovered from you, however, if to remove them would be to deplete their value. (Think of a wall. If its built then the goods (bricks) have become incorporated and will lose value to remove, but if the bricks are loose in a pallet then they won't)

There are all sorts of identification issues, but thats out of your hands.

BUT, its not simply a case of telling the electrical contractor tough luck.

2) You have retained 2.5% and as has been stated above you can retain whatever it costs to get the certification and deduct that from the outstanding balance (which is now due to the liquidator). This is for the simple reason that the contract between you and the builder, whether written or implied, will have determined (usually) upon insolvency and the builders failure to meet his contractural obligation to you which was to provide you (I assume) with a certified electrical system. In the worst case scenario that the Electrical contractor has retained title to the goods installed then you can offset the replacement cost as well.

3) If it costs you more than the retention to remedy the matter, then tough, I'm afraid. You will have an ordinary claim in the liquidation for what thats worth.

What you need to do as a matter of urgency is write to the liquidator and tell him/her that:-

a)You are retaining the 2.5% due to breach of contract by the builder in so far as no certificates have been issued.
b)The electrical contractor is claiming Reservation of Title to goods in your build, and you are clearly concerned. Ask for written confirmation of whether or not the ROT is valid.
c)You will confirm the cost of certification (replacement) as soon as (b) has been confirmed and bottomed out.

You also need to write to the electrical contractor stating that any issue of Reservation of title is a matter between them and the liquidator and you are not obliged to have any dealings with them.

Lastly, I don't meen to be negative, but don't assume its all over yet. Writing as above will help.

D

(posting from the Liqudator's perspective, and not the laymans )

[Edited by diablo - 3/13/2003 1:03:01 PM]

gregh

thanks Diablo.

A couple of points which I'd appreciate your thoughts on.

Firstly we have not been officially notified that the prime is in liquidation, the 1st I heard was the letter from the sub saying so.

The subcontractor has not stated in their letter that they are claiming reservation of title. They say that they haven't finished because they haven't issued the certificate. They then say "if you have not fully paid [the prime]" we can complete the work and issue the certificate.

They then say "failing this if you do not want us to complete these works then please get in contact with us as we would like to make arrangements to remove our goods/service within the next 7 days"

They have then circled a section of the invoice (which we have never seen before as we aren't dealing with them) which states:

the risk of the goods shall pass to the buyer on delivery, but the goods will remain the property of the seller until paid for in full

Does any of this change your advice above?

regards,

greg

Diablo

Nope.

You need to find out what the exact position with the main contractor is.

If its not in liquidation then simply continue to direct the electrical contractor to the main contractor.

Chances are it will be, though. It would be a starting point to contact your main contractor and ask them. That way you will know for sure.

They have not said "reservation of title" but the clause they are circling is exactly that.

But, as I've said (typed?) their primary port of call is the main contractor/liquidator, not you. At the very least, they cannot recover the goods until they guarantee they are not getting paid in accordance with their terms.

Their letter sounds like they are chancing it a bit, TBH, over the finishing works - do you know how much it is likely to be?

Whatever happens, it is imperative that you make it clear you will agree to nothing whatsoever until such time as you are satisfied the main contractor is in liquidation, or has given you written confirmation that they will not be completing the contract.

That is absolutely within your rights.

In the event it is a liquidation, you need written confirmation from the liquidator that the rot claim is valid and that the elec. contractor has rights to uplift the goods.

Can you tell me:-

What the goods are?
Is the E C's work (aside from certification) complete?
Is the retention more or less than the sums the E C wants paid?

And importantly, are there any other snaggings you would have a right to retain moneys against, given that any guarantee for the builders work is now probably worthless.

My advice would be to get written confirmation as above to bottom out the ROT clause (many can be defeated quite easily) and take it from there.

If the EC has no ROT (clause notwithstanding - there is a lot more to valid ROT than a few words on an invoice), you could do a deal over the certificates and then whatever happens, retain the whole lot against "unforseen issues" which may arise from the primary works as you have no comback now against the main contractor.

D

CraigH

Something similar happened when the company I was working for went into liquidation. Company I worked for hadn't paid a lot of suppliers, but had invoiced and supplied the goods direct to customers. The suppliers tried to get our customers to pay, claiming exactly the same "good remain the property of the seller etc etc".

But their were 2 seperate contracts - between company I worked for and their customer - and between company and their supplier. As co I'd worked for had invoiced the customer and they had paid there was nothing the supplier could do - the contract they are talking about was with themselves and the company I worked for, not between company and customer. So it's not a valid contract or statement.

Exactly the same situation as you. You've paid. That's your end of the deal sorted and complete. The electrical contractor will have to go down as one of the primes creditors and wait to see if they get paid, which they probably won't.

Theres nothing they can legally do to you.

gregh

cheers diablo,

I spoke to the prime who said they are going into liquidation, but have a meeting with the liquidator today, so it's early stages and he couldn't tell me anything else until after the meeting.

ref your questions

What the goods are?
>> supply and fit electrical sockets, switches, light fittings, and wiring up towel rails, electric showers etc.

Is the E C's work (aside from certification) complete?

>> yes.

Is the retention more or less than the sums the E C wants paid?

>> lots less.

regards,

greg

Diablo

Craig, mate, read my fist post again.

Yes, there are two separate contracts here.

BUT

The issue of who has title is a COMPLETELY separate matter and is irrespective of the fact that Greg does not have a contract with the electrical supplier.

Of course, best case scenario is that there will be no issue and they are just being optimistic.

BUT (again) they may be within their rights, and this must be bottomed out.

D

Diablo

Greg, IF (and its a big if) they have a valid claim to retain title to the goods then it sounds like the sort of stuff they could easily remove.

Fight the ROT claim via the liquidator once appointed, but do nothing re the ec until you do that.

D



[Edited by diablo - 3/13/2003 1:55:47 PM]

ChrisB

Very interesting all this.

Chris.

Diablo

Nice to be able to help where the problem falls into you area of expertise, so to speak

RaZe-=Buzz=-

and whos going to let them in the house to remove them?? it wouldnt be me until I'd been re-imbursed for their costs by the builder, unless of course they are covered by the retention. Might be another way to do it of course....

Didnt think about that side of it until now D - thats why you are a Mod and Im just a pleb

David_Wallis

should It come down to it and they do remove anything.. give me a ring, and Ill sort you out. Ooo err..

David

[Edited by David_Wallis - 3/13/2003 2:08:43 PM]

Diablo

Well that is the question

They may have to get a court order for access

Which is good for Greg

Diablo

Raze - builder cant pay anything now re reimbursing costs

[Edited by diablo - 3/13/2003 2:13:09 PM]

gregh

I kinda assumed no-one is getting over my front door without my or a courts permission :^)

I think they are trying it on/in a panic to recover their money.

Do I wait for the Prime/liquidator to contact me and inform me of the liquidation (ie act dumb)

regards,

greg

RaZe-=Buzz=-

"Ignorance is no defence in the eyes of the law"

Ive heard that said many times - such as "I didnt realise I was doing 140mph officer".

It cant hurt to find out can it? Contact the builder / liquidator and tell them the job isnt finished and you are being contacted by the elec people and why and find out what they say.

You are in he best position I guess you can be - youve had the construction finished, you are happy with it, and youve still got some of their money.

gregh

but the job *is* finished and I've paid the prime, and they haven't paid the sub

greg

Diablo

Greg - be proactive.

Find out who the liquidator is, write to him about the ROT issue, ask him to bottom it out.

Don't mention the fact that you intend to retain the retention against future cost at this time, though, cos us Insolvency and Recovery practitioners are more prone to assisting if there is a sniff of some cash at the end of the day

Above all, get the liquidator on side. That is imperative from your perspective.

All we ask for is poiteness and understanding that "your" problem isn't the only one on our desks at any given time.

D

PS - keep me up to date by email - I'd like to know how this shapes out. Happy to hepl as well as and when required.

Diablo

Any updates?

D

gregh

Nope, drafting letters today, sent you email yesterday, to your hotmail account.

greg

Diablo

Got it - YHM back. Was out all yesterday afternoon.

D

Luke

What is the value of the job???

seen this a few times... Diablo etc have a full understanding of the legal set up. But me thinks if this job is under a few grand... No one will chase it. And unless there is a court order (Which will never happen in a month of sundays) the sparkies can not enter you property.
Just make sure the sparkies are not a rough lot who might damage car etc..

Could always offer them 1/2 of the retained money to issue a certificate... That way they get some money!!