Builders In Breach Of Contract

[BloodyBan]

In the process of having a home built.Had a contract drawn up initially which gave a time-frame(180 days)and certain financial penalty clauses if this time-frame wasn't met(1250B per day).

We are now 12 weeks overdue,the builders have buggered off,basically because i've refused to give them the final payment(the contract states the payment is to be given when house is 100% complete).At present the house is about 85/90% complete.

Also the contract states only quality materials are to be used,on-site evidence suggests otherwise.

I'm curious to know has anyone taken legal action under similar circumstances,and if so what was the outcome/costs involved?

[hhgz]

"Also the contract states only quality materials are to be used,on-site evidence suggests otherwise."

And you JUST realized this after the house is 90% complete?

[jerrylee]

In the process of having a home built.Had a contract drawn up initially which gave a time-frame(180 days)and certain financial penalty clauses if this time-frame wasn't met(1250B per day).

We are now 12 weeks overdue,the builders have buggered off,basically because i've refused to give them the final payment(the contract states the payment is to be given when house is 100% complete).At present the house is about 85/90% complete.

Also the contract states only quality materials are to be used,on-site evidence suggests otherwise.

I'm curious to know has anyone taken legal action under similar circumstances,and if so what was the outcome/costs involved?

The golden rules of construction contracting: "On Time", "On Budget" and "To Specs" -

the client can have any two (2) of the conditions - but <b>NEVER</b> all three,

on time and budget but not to specs?

on budget and to specs but not on time?

to specs and on time but not on budget?

[jimmym40]

If the house is 80-90 percent complete, just use the money you would spend going after the guy to finish the house. You probably will not get any reimbursement from the builder even if you did win in a court. It would be a total wast of time, cause you so much stress and aggravation, etc. Not to mention the possibility of retaliation in some way.

Be cool, be happy (if possible) and go forward. It sounds as if you didn't have a very specific legal contract in the first place.

If you have spent any left of time in Thailand, you would know that it would do no good to go after the builder.

Good luck in whatever path you take.

[Livinginexile]

In the process of having a home built.Had a contract drawn up initially which gave a time-frame(180 days)and certain financial penalty clauses if this time-frame wasn't met(1250B per day).

We are now 12 weeks overdue,the builders have buggered off,basically because i've refused to give them the final payment(the contract states the payment is to be given when house is 100% complete).At present the house is about 85/90% complete.

Also the contract states only quality materials are to be used,on-site evidence suggests otherwise.

I'm curious to know has anyone taken legal action under similar circumstances,and if so what was the outcome/costs involved?

Welcome to Thailand!...

Where NOTHING, I will repeat so there is no confusion, NOTHING is built on time, on spec, on budget or on quality.

[ignis]

the builders have buggered off

The reason why most Thais take out Insurance when they are having a house built, legal action if needed is done by the Insurance Company

[Crossy]

The reason why most Thais take out Insurance when they are having a house built, legal action if needed is done by the Insurance Company

Interesting, something I'd not considered doing.

What is this insurance called? How much does it cost? And can I get it from Thaivisa Insurance?

[jimmym40]

Ha, "most Thais" take out insurance. What a LAUGH...

Most Thais don't know what insurance is for. I'm wondering, how many do you know that took out this insurance and what companies offer it. Can you imagine a Thai company, insuring another Thai bloke or even construction company to do a job "on time". That in itself is a big LAUGH. Anyway, the insurance (if available) would probably cost more than the lawyers/court costs (how else would the insurance companies make money.

Remember, you are in Thailand, and dealing with the Thai mentality...

[BEENTHEREDONETHAT]

Take a lot of dated photos of the state of the house. Send a registered letter to builder advising him if the project is not underway in one week and completed in (you decide) you will use the final payment money to hire another contractor to finish the job and bill him for any overrun. Not a snowballs chance of collecting but puts you in a better position than just doing it.

[ignis]

Ha, "most Thais" take out insurance. What a LAUGH...

4 Thai friends all took out Insurance when they had there houses built, just phoned one to ask which Company they used they said 'Zurich Insurance' no idea about the other 3 unless I contact them

I phoned this one because the Builders disappeared after the 1st money was paid, the Insurance Company dealt with everything

[katabeachbum]

Take a lot of dated photos of the state of the house. Send a registered letter to builder advising him if the project is not underway in one week and completed in (you decide) you will use the final payment money to hire another contractor to finish the job and bill him for any overrun. Not a snowballs chance of collecting but puts you in a better position than just doing it.

yepp. and then move on/complete your home

[BloodyBan]

"Also the contract states only quality materials are to be used,on-site evidence suggests otherwise."

And you JUST realized this after the house is 90% complete?

The quality of materials used only become an issue towards the END of the build.

If these type of contracts don't carry much legal weight,whats the point in having them drawn up at all?

Has anyone experienced legal action action under similar circumstances?

[Rimmer]

Projects here most always go over budget and over time

[BloodyBan]

Projects here most always go over budget and over time

Understood,however this project has come to a complete standstill

[David006]

Good suggestion re "bite the bullet" and use the lawyer fees to finish the house..contracts here are worth shit.. I sued a "buggered off" builder ( for about 240KTh) and won but got 5% on the dollar after 18 months..courts figure your just a rich bastard farang I guess..waste of time and effort not to mention the cost of the booze I consumed and the weight I lost.. Forget it mate..I finished my house with a local guy through a friend of a cousin..blah blah, he'd been building schools..no contract.. zip...Did a great job and fixed all the f/ups. I did all the plumbing and electric myself though..

[midas]

Is this being built on your land or is it part of a larger project on land owned by the builder / developer?

If its not your land be careful because a friend of mine had the same experience in a project and and the

next thing the builder sold the property to someone else because they claimed my freind ( the purchaser )

has forfeited his rights by not paying all the money..........result 5 years later and the matter is still

going through the court

[Asianrider]

sounds like you wouldn't trust them even if they came back, engage another contractor and complete the project. These contracts are a good starting point for avoiding some misunderstandings and laying down rules, but the practicalities of a actually launching a legal case in Thailand can be not worth the (financial) hassle.

[stgrhe]

Take a lot of dated photos of the state of the house. Send a registered letter to builder advising him if the project is not underway in one week and completed in (you decide) you will use the final payment money to hire another contractor to finish the job and bill him for any overrun. Not a snowballs chance of collecting but puts you in a better position than just doing it.

I agree with the photos, but before you send the letter, carefully read the contract clauses for liability and under which provisions the contract can be suspended or terminated. Terminating a contract on false grounds may make things worse.

You (i.e. the OP) also mention that only "quality" material should be been used, but what is quality and what does that mean? Actually, it means nothing as such a statement is totally useless in contract terms unless it is well defined; e.g. the PVC blue water pipes come in three different qualities based on the maximum pressure they are used for: 5 bars, 8 bars and 13.5 bars. Another example is wood, which is graded A, B, C and so on. In a contract such a detailed specification is paramount because your definition of quality may not be the same as the builder's and who's interpretation has precedence?

Therefore, before you do anything more consult a lawyer and have him study your contract in order to determine where you stand contractually. It is impossible for anyone here on the Thai Visa to tell you that since we have not read your contract.

[stgrhe]

The golden rules of construction contracting: "On Time", "On Budget" and "To Specs" -

the client can have any two (2) of the conditions - but <b>NEVER</b> all three,

on time and budget but not to specs?

on budget and to specs but not on time?

to specs and on time but not on budget?

What a lot of crap! Of course one should expect all three to be honoured by the builder provided neither extra work has been ordered nor any changes to the house plan been made, and if the builder is still late, and the delay is not due to the buyer or reason of force majeure, the LD clause in the contract should enter into effect.

[eddiemonster]

I would be interested to know what you decide to do.

Most of the responses have been negative and, as usual with ThaiVisa, lots of opinions but not much experience relevant to your post, only post 15 has any experience.

Whenever I have discussed similar situations to yours with the ex-pat community I always here the same responses as most of the views given above, but I have never met anyone who has actually taken a Thai to court or even knows someone who has. Yet amazingly everyone is of the rock solid opinion that a farang cannot win.

Of course, the majority opinion may well be right, but my point is that most peoples opinions in these matters are based on gossip rather than fact.

[midas]

I would be interested to know what you decide to do.

Most of the responses have been negative and, as usual with ThaiVisa, lots of opinions but not much experience relevant to your post, only post 15 has any experience.

Whenever I have discussed similar situations to yours with the ex-pat community I always here the same responses as most of the views given above, but I have never met anyone who has actually taken a Thai to court or even knows someone who has. Yet amazingly everyone is of the rock solid opinion that a farang cannot win.

Of course, the majority opinion may well be right, but my point is that most peoples opinions in these matters are based on gossip rather than fact.

My comments in post 16 are not based on gossip I can assure you !

I have accompanied my neighbour to court regarding his case three times

over the last year because he just wanted a farang to keep him company.

As I mentioned in post 16, this court case was the result of him purchasing a house on an estate

which was meant to be built exactly to his specifications. In the end, there were so many defects and incorrect items

during the course of building this house that he refused to pay any further money until they had all been

rectified. There is nothing complicated and unfair

about this situation-it is simple-if you order something to be made or manufactured as a consumer

you have the right to expect exactly what you asked for? But as I mentioned ,

the developer interpreted the refusal by the purchaser to pay any more money as being a breach of contract

for nonperformance which was rubbish. And without any warning, the property was sold to another person.

Following this, the developer's have even refused to give ANY MONEY back to my neighbour.

To say this sucks in is grossly unfair is probably a gross understatement.

I have read all the documentation which was meticulously kept including minutes from a meeting with the

Directors of the development company and from the beginning

I failed to see how his case was anything other than rock solid.

From the three times I have attended this court case which began five years ago, ( long before I started

accompanying my neighbor) , I would have to say that my firm feeling is that your expression

" a farang cannot win " in Thailand is probably the most understated thing you can possibly say

about the so-called justice system here!

On the second time I went, I could hardly believe my ears when the judge actually led both

sides into a private room and came out with all kinds of innuendos regarding how

the developer was a dangerous man if he was angry

and that it would be far better for my neighbor to settle the matter out of court ! You don't need to be a

rocket scientist to work out what happened there - Corruption corruption corruption.

Just like everything else in Thailand the farang has no chance whatsoever of getting Justice.

Edited May 18, 2009 by midas

[hhgz]

"the quality of materials used only become an issue towards the END of the build."

Most assuredly not. "Materials" are used throughout the construction process and, to complain after a home is 90% complete is an indication that the buyer has ignored the entire process. Does the OP have a problem with the quality of the concrete slab, the roofing tiles, or the brand name of the water closet? The cross section of the house wiring? I don't know. The OP made a blanket statement, without any specifics.

As with many farangs, the OP believes that "hiring an attorney", and "threatening to sue", will resolve this situation. He should lower his expectations.

I'm not sure what exactly portions of the contract the OP believes that the builder is in breach. The builder walked away, and he has withheld the final payment. There you go. In my opinion, the OP should get off his duff, and get involved with his home. He should take a lot of photos, move into the home, and hire someone to complete the home construction. He should save every receipt, and have a log of who and when enters the construction site. Following the completion, he should compare what his additional costs were, compare that to the contract price, and then consider if suing the builder for the difference makes any sense. I think not. Regardless, sitting around and complaining is not going to get his house completed.

[BloodyBan]

Consulted lawyers(Aussie/Thai couple based in KK)one of the first things he said was that there's a good chance you could spend a great deal of money and walk away with nothing"

Advised us against bringing in a new team of builders,otherwise we may be liable for breaching the contract.

Suggested a letter threatening legal action to begin with.Also have the option of a asset check-this will determine if the builder owns any property etc.The outcome of this may determine whether we proceed further,however the lawyer suggested a long drawn out court case is financially at least, not worth while.

[carriemai]

Consulted lawyers(Aussie/Thai couple based in KK)one of the first things he said was that there's a good chance you could spend a great deal of money and walk away with nothing"

Advised us against bringing in a new team of builders,otherwise we may be liable for breaching the contract.

Suggested a letter threatening legal action to begin with.Also have the option of a asset check-this will determine if the builder owns any property etc.The outcome of this may determine whether we proceed further,however the lawyer suggested a long drawn out court case is financially at least, not worth while.

Yeah, okay, under the law in Thailand.

Some years ago I had the same 'welllll, you may be in breach of contract'. And I thought, Seriously, do you think any builder here is going to take anyone to court? Never mind whether you're farang or Thai (Thais have exactly the same problems we do, believe it or not - they also have no recourse to 'justice' in the form of consumer protection or reasonably swift access to recompense through the law).

Stop thinking 'Your Country'. Don't throw good money after bad, walk away and spend it on another builder, or, if you're near completion, day workers supervised by yourself. No one, believe me, not your lawyer, and least of all your builder, will neither care nor notice.

[BloodyBan]

"the quality of materials used only become an issue towards the END of the build."

Most assuredly not. "Materials" are used throughout the construction process and, to complain after a home is 90% complete is an indication that the buyer has ignored the entire process. Does the OP have a problem with the quality of the concrete slab, the roofing tiles, or the brand name of the water closet? The cross section of the house wiring? I don't know. The OP made a blanket statement, without any specifics.

As with many farangs, the OP believes that "hiring an attorney", and "threatening to sue", will resolve this situation. He should lower his expectations.

I'm not sure what exactly portions of the contract the OP believes that the builder is in breach. The builder walked away, and he has withheld the final payment. There you go. In my opinion, the OP should get off his duff, and get involved with his home. He should take a lot of photos, move into the home, and hire someone to complete the home construction. He should save every receipt, and have a log of who and when enters the construction site. Following the completion, he should compare what his additional costs were, compare that to the contract price, and then consider if suing the builder for the difference makes any sense. I think not. Regardless, sitting around and complaining is not going to get his house completed.

I have no expectations,thats why i posted here!

Remember the original query "Has anyone taken a builder to court,if so what was the outcome?"

I was just looking for some feedback(positive or otherwise)

I appreciate the constructive replies,of which i've duly taken note.

Did i really come across as complaining,certainly wasn't my intention.

Interested to hear from anybody who has taken legal action under similar circumstances.

[BloodyBan]

"the quality of materials used only become an issue towards the END of the build."

Most assuredly not. "Materials" are used throughout the construction process and, to complain after a home is 90% complete is an indication that the buyer has ignored the entire process. Does the OP have a problem with the quality of the concrete slab, the roofing tiles, or the brand name of the water closet? The cross section of the house wiring? I don't know. The OP made a blanket statement, without any specifics.

As with many farangs, the OP believes that "hiring an attorney", and "threatening to sue", will resolve this situation. He should lower his expectations.

I'm not sure what exactly portions of the contract the OP believes that the builder is in breach. The builder walked away, and he has withheld the final payment. There you go. In my opinion, the OP should get off his duff, and get involved with his home. He should take a lot of photos, move into the home, and hire someone to complete the home construction. He should save every receipt, and have a log of who and when enters the construction site. Following the completion, he should compare what his additional costs were, compare that to the contract price, and then consider if suing the builder for the difference makes any sense. I think not. Regardless, sitting around and complaining is not going to get his house completed.

Regarding the "Quality materials" the contract states a certain brand/product is to be used,this covers a wide range of items from cement,paint,electrical fittings and so on.

So if the contract states "Grade A granite is to be used for all flooring" and then he installs 49baht ceramic tiles...well i'd consider that a breach of contract.

[joskydive]

In the process of having a home built.Had a contract drawn up initially which gave a time-frame(180 days)and certain financial penalty clauses if this time-frame wasn't met(1250B per day).

We are now 12 weeks overdue,the builders have buggered off,basically because i've refused to give them the final payment(the contract states the payment is to be given when house is 100% complete).At present the house is about 85/90% complete.

Also the contract states only quality materials are to be used,on-site evidence suggests otherwise.

I'm curious to know has anyone taken legal action under similar circumstances,and if so what was the outcome/costs involved?

I tried to take legal action against my builders when I had my house repaired. Unfortunately, the builder I used and contracted with seemed to have no fixed abode when we tried to source his establishment. So, for me, I went and got someone else to go and finish my house.

The first thing I would ask you is, did you use a building firm rather than an unknown contractor who can't be found? If you used a building firm you have much more chance in a court of law, however, if you can source the establishment or home of the contractor you still have a chance.

In the Civil & Commercial Code of Thailand you have done your side correctly and should be able to take the contractor to court if you so wish.

Title V11

Hire of Work

Section 587

A hire of work is a contract whereby a person, called the contractor, agrees to accomplish a definite work for another person, called the employer, who agrees to pay him a remuneration of the result of the work.

Section 589

If the materials for the work are to be supplied by the contractor, the contractor shall supply materials of good quality.

Section 593

If the contractor does not begin to work in a proper time or delays in proceeding with it contrary to the terms of the contract, or if, without the fault of the employer, he delays to proceed with it in such a manner that it can be foreseen that the work will not be finished with the agreed period, the employer is entitled to rescind the contract without waiting for the time agreed upon for delivery.

Section 594

When it is possible to foresee with certainty, whilst the work is proceeding, that by the fault of the contractor, the work will be executed in a defective manner or contrary to the terms of the contract, the employer may notify the contractor ot make good the defect or to comply with the terms of the contract within a reasonable time to be fixed in the notice, failing which the employer is entitled to have the work repaired or continued by a third person at the risks and expenses of the contractor.

Section 595

If the materials have been supplied by the contractor, his liability for defects is governed by the provisions of the Code concerning Sale.

Section 599

In case of delay in delivery or of delivery of a defective work, the employer is entitled to withhold the remuneration unless the contractor gives proper security.

Section 600

Unless otherwise provided in the contract the contractor is only liable for defect appearing within one year after delivery of the work, or within five years if the the work is for a structure on land other than a wooden building. This limitation shall not apply if the contractor has concealed the defect.

Section 602

The remumeration is payble on taking delivery of the work. If the work is to be accepted in parts and the remuneration has been specified for the several parts, the remuneration for each part is payable at the time of its acceptance.

Section 605

As long as the work is not finished, the employer can terminate the contract on making compensation to the contractor for any injury resulting from the termination of the contract.

I don't know what costs you would incur for the services of a Lawyer or even how long it would take to go to court. You would have to ask a Lawyer those questions and also if he/she can recieve they're monetary compensation from the builder by order of the court.

At least here you know from Section 594 that the contractor cannot sue you for his losses if you have employed another person to finish the job.

Good luck, hope all turns out well for you.

[FarangRed]

In the process of having a home built.Had a contract drawn up initially which gave a time-frame(180 days)and certain financial penalty clauses if this time-frame wasn't met(1250B per day).

We are now 12 weeks overdue,the builders have buggered off,basically because i've refused to give them the final payment(the contract states the payment is to be given when house is 100% complete).At present the house is about 85/90% complete.

Also the contract states only quality materials are to be used,on-site evidence suggests otherwise.

I'm curious to know has anyone taken legal action under similar circumstances,and if so what was the outcome/costs involved?

Who's name is the building permit in? I have seen many times when it's been in the builders name or the architect's name,

Save your money to finish the house rather than a lawyer, less grief.