Posted: November 2013
By Jo Eccles
I see many unmodernised properties sold for a premium because a lot of buyers want to purchase a property which requires refurbishment. If you are one of these buyers, then be careful, as the work isn’t always straight forward.
Firstly, it’s very hard for a contractor to give a fixed price on certain works, or guarantee that they’re even possible. This can be quite pertinent in flats where you may want to knock down a wall for example, but you can’t be 100% sure that there aren’t communal pipes running behind it which service other properties in the building. You can’t start the work until you own the property, so you need to be comfortable with a compromise in the layout if your ideal simply isn’t possible from a building or cost perspective.
Secondly, you need to be extremely careful about the contractors you use. We recently had a client whose contractor asked that they pay for the cost of all works and goods upfront. Unfortunately, the contractor only did a third of the job and then stopped the work as they’d used the clients’ funds elsewhere. Always pay in stages, and pay kitchen and bathroom suppliers directly if you can. Check that the contract you have with your builder specifically says that all client money they receive will be held in a separate ring fenced client account. If it doesn’t, you have less recourse if your builder doesn’t spend your money as promised.
If you’re doing a very large project and buying big ticket items such as an expensive kitchen which won’t be delivered until much later in the project, then make sure the manufacturer is financially sound. Even if going to a big name brand is slightly more expensive, it may be worth it as you can be confident that they won’t be out of business by the time your goods are required.
Finally, don’t forget good insurance. A property being ripped apart is a specialist area when it comes to insurance, so an online policy is unlikely to cover all the risks. A specialist insurance broker will be worth their weight in gold if something goes wrong, so don’t scrimp and save on this part.
If you have a question you’d like Jo to answer please email firstname.lastname@example.org or tweet her @joeccles.