Suing A Builder

[Bemused]

My builder has let me down in that he is now more than 2 years overdue on the construction of my house. The business is English owned and managed. I am not Thai.

I have given him a deadline for next year, with the threat that if the work is not completed I will sue for the cost of the uncompleted work and compensation for estimated rental income I would have lost out on. I would rather not sue, however, I am out of options.

I am planning to use a major Bangkok law firm to do the suing.

Anyone got any advice or experience?

[Maigo6]

Bemused,

Pheonix Golf Club by any chance ?

[malcolminthemiddle]

From your post it appears that quality and cost is not in dispute but time to complete is?

Before legal procedures I would consider the following:

1. Renegotiate the existing construction contract with fixed milestone dates and stringent terms if any of the new milestones are missed.

2. Exercise your right to determine the construction contract under existing terms and conditions

3. Negotiate an amicable cancellation of the existing construction contract

All these options depend on:

1. terms and conditions of existing construction contract

2. the value of work completed vs amount of money paid.

3. the cost to complete the house

3. ownership of the land on which the house sits

4. other considerations

[Bemused]

From your post it appears that quality and cost is not in dispute but time to complete is?

Before legal procedures I would consider the following:

1. Renegotiate the existing construction contract with fixed milestone dates and stringent terms if any of the new milestones are missed.

2. Exercise your right to determine the construction contract under existing terms and conditions

3. Negotiate an amicable cancellation of the existing construction contract

All these options depend on:

1. terms and conditions of existing construction contract

2. the value of work completed vs amount of money paid.

3. the cost to complete the house

3. ownership of the land on which the house sits

4. other considerations

Thanks for the advice. The builder has had a letter before action giving a date next year for completion. The value of the incomplete work is about 600,000 THB. There has been no work done ons-site for about a year now.

[eljeque]

I sued my Thai builder and won in court and have collected the initial payment and more monthly payments.

You can sue, win and collect.

If he has not been on site for one year, then I would bet your lawyer would be able to show that he has abandoned the site and his work. In your contract, there are more than likely milestones and he is to complete certain parts of the project on those dates. If he has not completed each part of the building on the requireed dates, he is in breach of the contract. Have your lawyer send him a letter noting that he is behind schedule and asking him to make contact with you, and get on schedule. If he does not make contact and get on schedule, then he has abandoned the project. Your lawyer would know how long he is able to stay away from a project before he has abandoned his responsibilities in the contract.

Two years past due, and not been there in one year.

I would have expected that a house build would not be more than one year.

Mine was about 7 months, but it was a small house.

Send him a letter, he does not make contact and have men on site, file the case.

You will be in court in about 4 months, and he will be surprised, if he shows. People think that they will never be taken to court over their actions. My Thai builder could not believe that a foreigner had him in court. He had ripped off many Thais as well, including his construction supervisor, the window installer, electrician, etc.

If he has a company, and your contract is with the company, but you have at any time made payments to him, his account, etc., then make sure to sue him as well as the company. That way, you can go after his assets besides the company's. It is possible that the company has no assets, and has closed, and then you will have difficulties getting any money. If it has no assets, but has not closed, have someone see where the owners goes to view construction, and then your lawyer will follow up with that customer and get the court to become involved in payments for the job.

Foreigners become real scared when facing legal difficulties. They think they can get away with it for a long time, but then someone like you arrives and gets even a little.

I think a major Bangkok law firm would be a little too expensive for a 600,000 case.

Are you in Bkk? If you are in Pattaya, you can message me if you would like, and I can get you in contact with my lawyer who did a good job for me.

[malcolminthemiddle]

If the builder has abandoned the project that is a justifiable reason to determine the Contract, no need to wait until next year allowing further deterioration in the half built property. You can then pursue any cost and damages as a consequence of his breach through the courts should you decide.

Without delay you must first take back, secure and protect the property including any loose materials so that you can complete the project without disruption, if that is indeed your intention.

You didn't say in whose name the land is registered?

[Bemused]

Hi Malcominthemiddle and Eljeque

That gives me a lot more confidence. Nice to see that someone managed to enforce a contract against a builder in Thailand. Well done.

The land is in the name of a company. The builder (also English owned) is also a registered Thai company set up in the same way. We are both in the south on a well known holiday island. The lawyers here and on the neighbouring islands are notouriously dodgy. For this reason, and because I want to try and get 2 years of missed rental costs for my 3 bedroom sea view villa back, I am looking to get some legal heavy weights involved. The total amount I would like to claim for would be in excess of 2 million.

In hindsight I should have chucked him off-site already. Basically the guy hasn't finished the final fitting out stage of a 200sqm house build. he has had all the payments he is due.

I do still hope he can redeem himself, for that reason he has 6 more months. I sent him a long letter setting out threats, breaches of contracts and the new timetable. I sue people in the UK for similar types of things in the UK (this is my profession) and did all the same things I would do were i taking it to the English law courts, ie. sent in recorded delivery, cited point by point breaches etc, etc.

Two specific things I am really interested in are:

1) Any pointers on how Thai Courts view and calculate compensation claims?

2) What were you your Court and Legal costs to get the thing before a judge?

Thanks again, really helpful posts

Edited September 17, 2009 by Bemused

[Farma]

The information in this Thailand Business and Legal Guide, Civil Litigation link may provide some basic answers. http://bia.serverbox.net/030.html

The link to the guides main page is pinned in the Jobs forum under useful web site.

[stgrhe]

Bemused,

You have got some very good advice from both Malcominthemiddle and Eljeque, but it should nevertheless be interesting to learn how the Termination and Suspension Clauses are worded. Also, you have probably a LD caluse that specifies how much compensation you have right to for the delay. This clause has probably a sealing of 5 - 10% of the total contract value.

These clauses are a good starting point although you should already have enough evidence to put in front of the court given the circumstances you have described.

Good luck to you!

[eljeque]

I can provide you with only some informatiuon about my situation, as I do not know the laws.

I wsa given the difference between the work that was carried out and the work that he was paid for, and then that was negotiated down a bit, as I got tired of speaking Thai. On hind site, I would sit it out longer.

The periodd of time that he was late in my case was only a couple or a few months, so I could not claim loss of rent or anything like that. Or, at least I could not see myself claiming that.

I DO NOT KNOW, but you may be able to make a claim like that only if you can show full payment. A question for your lawyer.

Best of luck.

[thaiwanderer]

My builder has let me down in that he is now more than 2 years overdue on the construction of my house. The business is English owned and managed. I am not Thai.

I have given him a deadline for next year, with the threat that if the work is not completed I will sue for the cost of the uncompleted work and compensation for estimated rental income I would have lost out on. I would rather not sue, however, I am out of options.

I am planning to use a major Bangkok law firm to do the suing.

Anyone got any advice or experience?

Have you mitigated?

Assume staged payments so delay up to you.

If he never completed would you expect to recover lost rental for ever?

You say big BK firm but where is the building?

Get another builder and use the money for next stages you have been waiting on him to do to pay them.

Unless i'm missing something.

[Bemused]

My builder has let me down in that he is now more than 2 years overdue on the construction of my house. The business is English owned and managed. I am not Thai.

I have given him a deadline for next year, with the threat that if the work is not completed I will sue for the cost of the uncompleted work and compensation for estimated rental income I would have lost out on. I would rather not sue, however, I am out of options.

I am planning to use a major Bangkok law firm to do the suing.

Anyone got any advice or experience?

Have you mitigated?

Assume staged payments so delay up to you.

If he never completed would you expect to recover lost rental for ever?

You say big BK firm but where is the building?

Get another builder and use the money for next stages you have been waiting on him to do to pay them.

Unless i'm missing something.

Hi - you have missed the point here a bit. The builder has been paid for the final stage of construction and hasn't done it. The money to finish the house has been handed over to the builder already. If I get another builder I have to pay out twice. The claim for lost rent is a claim for the income I have lost out on because the builder hasn't done the work I have paid him for and he has signed a contract to do. the builder has continually told me he is just about to start .... Effectively my money has been used as a loan by the builder to pay to complete other jobs.

[stoneman]

Hi - you have missed the point here a bit. The builder has been paid for the final stage of construction and hasn't done it. The money to finish the house has been handed over to the builder already. If I get another builder I have to pay out twice. The claim for lost rent is a claim for the income I have lost out on because the builder hasn't done the work I have paid him for and he has signed a contract to do. the builder has continually told me he is just about to start .... Effectively my money has been used as a loan by the builder to pay to complete other jobs.

Had a very similar situation with my builder...When it came time for the final 20% payment, it was very apparent to me that he was going to use the money on other projects and attempt to bring them up to date and get money for that, which he would use to complete my house...I refused to make the payment..Instead, we put the money into an account and each time the builder spent money for our house, we paid him out of that account...When it was completed, we turned over the balance in the account to him...

Stoneman

[onlycw]

You are one lucky guy! He got not paid more than he is dues, phew, that's a relief!

the rest is easy. Get him to sign a cancellation agreement and pay someone else to do the job. Go with a reputable competent firm. Pay more, offer cash incentives for milestones as time is here money.

I wouldn't dream of suing a Thai builder - remember the reports of contract killings? That's too common for comfort!

The builder should be relieved since he is clearly busy with other projects.

Good luck!

[stevejones123]

Hi - you have missed the point here a bit. The builder has been paid for the final stage of construction and hasn't done it. The money to finish the house has been handed over to the builder already. If I get another builder I have to pay out twice. The claim for lost rent is a claim for the income I have lost out on because the builder hasn't done the work I have paid him for and he has signed a contract to do. the builder has continually told me he is just about to start .... Effectively my money has been used as a loan by the builder to pay to complete other jobs.

So you paid the guy in advance and he didn't do anything! Go ahead and sue! Remember to give the lawyer full money in advance.

[thaiwanderer]

My builder has let me down in that he is now more than 2 years overdue on the construction of my house. The business is English owned and managed. I am not Thai.

I have given him a deadline for next year, with the threat that if the work is not completed I will sue for the cost of the uncompleted work and compensation for estimated rental income I would have lost out on. I would rather not sue, however, I am out of options.

I am planning to use a major Bangkok law firm to do the suing.

Anyone got any advice or experience?

Have you mitigated?

Assume staged payments so delay up to you.

If he never completed would you expect to recover lost rental for ever?

You say big BK firm but where is the building?

Get another builder and use the money for next stages you have been waiting on him to do to pay them.

Unless i'm missing something.

Hi - you have missed the point here a bit. The builder has been paid for the final stage of construction and hasn't done it. The money to finish the house has been handed over to the builder already. If I get another builder I have to pay out twice. The claim for lost rent is a claim for the income I have lost out on because the builder hasn't done the work I have paid him for and he has signed a contract to do. the builder has continually told me he is just about to start .... Effectively my money has been used as a loan by the builder to pay to complete other jobs.

Thank you for clarifying.

I will try not to flame but at least you might learn from this (although for as long as you believe the accruing and continuing rent might be recoverable the lesson has not yet been learnt). Some thought needs to be put into staged payments, construction milestones and inspections before there is a problem (i.e. before you have committed to anything).

Even in a perfect world where you will get the justice you wish for you cannot expect that the builder is liable for the lost rental forever and a day.

You need to mitigate whether or not you pursue him in the courts. If that means borrowing money yourself to get it finished then so be it. There really is no point in sitting on your hands and moaning that he is in breach. You are an adult get on with it (I honestly say that in the nicest possible way) its a bonus if you recover anything from him but you are losing rental income and may or may not recover any, all or part of it from him.