Due diligence checklist when hiring a builder

Now that you’ve had the quotes back, it is almost time to hire a builder for your extension. Almost.

It is incumbent on you to carry out the necessary due diligence on your preferred builder, to make sure that everything you’ve seen, heard and read thus far checks out, before you go ahead and make the hire.

due diligence builder

What do we mean by due diligence?

There is a lot at stake here, so it’s important that you know what you need to about the person/company in whom you will soon place your trust. In this context, due diligence refers to fact-checking, asking the appropriate questions and generally doing your homework on the prospective builder.

Use this due diligence checklist before hiring a builder:

  1. Raise queries
    Ask all reasonable questions about the quotation and get responses in writing. Where appropriate, receive an updated quote and/or contract.
  2. Check client reviews
    Pick an online review written on any platform, and ask the builder to talk about the project. Better still, email the reviewer and request a reference.
  3. Website spot check
    Pick one or two points made on the builder’s website and ask them to explain a little further. Perhaps on core values, how they work or maybe something tucked away in the FAQs. Doing so will stimulate an insightful response and demonstrate that you as a consumer have your wits about you.
  4. Visit at least one past project– preferably one similar to your own
    Visit without the builder present so you are free to make probing enquiries. Where possible, also visit a work in progress to get a feel for how the team work on-site.
  5. Company status
    This should be checked at Companies House, to ensure the company is active and trading.
  6. Check the VAT status of the builder
    At the time of writing, the UK threshold for compulsory VAT registration is £85,000, which is about one – possibly two – extensions. It’s therefore difficult to see how a builder could avoid registering for VAT if they complete more than this volume of projects per year.
  7. Check any guarantees and warranties offered
    Ensure you know exactly what these cover and if they are insurance-backed. Non-insurance-backed guarantees and warranties are worth only the paper they’re written on.
  8. Health and safety paperwork
    Your building company must comply with the Construction (Design and Management) Regulations 2015 (CDM 2015). Ask to see a copy of the builder’s health and safety policy, method statement and risk assessment.
  9. Accreditations
    Accreditations like those from Gas Safe, NICEIC, FMB, Which?, HETAS, CHAS and FENSA can and should be easily checked on the relevant bodies’ websites.
  10. View the insurance schedule
    Public liability insurance (often referred to as contractor’s insurance) is a must. This should provide sufficient coverage and be valid through to at least the end of the project. In addition, if the company is providing any design input, they will also need professional indemnity insurance to boot.
  11. Enquire about future work
    The absence of pipeline projects after yours isn’t necessarily a negative, but good-quality builders are usually in demand. On the flip side, you don’t want an overly busy workbook to detriment the quality of your build.
  12. A formal contract
    This must be in place to sanctify your agreement to pay the builder X and the builder’s agreement to provide you Y.

This 12-point due diligence checklist will help ensure that you know everything relevant and necessary about you prospective building company. If they don’t fully tick every point on the due diligence checklist, it’s not automatically a showstopper. There is such a thing as knowing too much – if you look hard enough, you will certainly find one reason or other not to make the hire.

Nobody is perfect and no career journey straightforward, but if you have followed the process without deviation thus far, you will have mitigated risks and developed a decent all-round picture of the builder, and that, one hopes, will see you right.