12.

What to do when your contractor becomes insolvent

with Alex

We’re so glad to share this story with you this week as it is one that we were involved with, and means a lot to us personally.

We talk with Alex, a client from the early years of our architecture practice, who despite undertaken lots of preparation work to ensure the project ran smoothly, faced their contractor becoming insolvent just 6 weeks before completion.

We talk to him about what action that both he and his partner Alessandra took to get their project over the finish line with their team still intact, as well as the rigour needed in selecting your fittings and finishes for a long and purposeful life – even for future owners.

Stories-From-Site-Alex

LISTEN:

Amy: Welcome to Stories from Site, the renovation podcast that digs a little deeper. I’m Amy Dohnalek and together with my co-host Jane Middlehurst we peek behind the curtains of those insta-worthy interiors to bring you the real processes people went through to make their dream homes a reality.

After 10 years as architects renovating homes, Jane and I set up HomeNotes to teach people how to take on their own renovation journeys. We’ve met so many inspiring people on the way, and now we want to share their incredible stories.

We’re so glad to share this story with you this week as it’s one that we were involved with and means a lot to us personally. We talked with Alex, a client from the early years of our architecture practice, who despite undertaking a lot of preparation work to ensure the project ran smoothly faced, their contracts are becoming insolvent, just six weeks before completion. We talked with him about what action they took to get their project over the finish line with their team still intact, as well as the rigor needed in selecting your fittings and finishes for a long and purposeful life, even for future owners.

Hi Alex. Thanks for being with us today. Um, obviously we were the architects on your project many moons ago, and we are really excited to revisit the project today. But first, do you want to take us back to when you purchased the property and what you were looking for?

Alex:

Yeah, I’m happy to. I think, we’d obviously been saving like mad and, and had done quite a lot of property viewings and it’s sort of in that process it dawned us that we were not sort of scared of taking on or buying a project, so something with some form of development, within it. And I think that then led us to obviously the Reighton Road property which we clearly could see had a a large loft attic space that could provide the development potential that we, that we were after.

So obviously we moved in and we, we spent, you know, three or four years really kind of thinking through what we wanted from the space and what was possible. And obviously that that kind of became part of our, our architectural brief to pose some key questions about whether our understanding of what is possible is actually possible.

I think probably you were the most prepared clients we’ve ever worked with even today, I would say.

Amy: You had a very extensive brief and I guess I would like to know how long did it take you to get that preparation done?

Alex: Okay. I think there’s incubation time, which is the, not thinking too much about it, but just being in the in the, in the existing space. Yeah. That, that has to be from the moment you walk in. I think we really started to get serious probably about a year before we contacted architects.

And I think as our object ives were less you know, square meters and rooms and this sort of stuff. And actually more about fundamental things that we wanted from living and, and I think they’re contextual to our lives. Alessandra, my partner is, is from Australia. And there’s you know, a wealth of natural light and vistas that exist where she comes from.

Victorian houses have small windows and they don’t really allow that connection to the outside world that that we both agreed were, were quite important. So I think the kind of fundamental building blocks of, of really what we were trying to achieve is to let the light into an older property, which is not easy when you’ve got stairwells and all sorts of things. But as you know, you know, that was part of the challenge was how do we do this? We’re obviously three floors up. We are, you know, in, in the gods in terms of the availability of that light.

The brief was really set to how do we bathe ourselves in light every in our home basically.

Jane: In the same way that you guys had prepared to start the project, I feel like you were really on the ball with choosing materials and really engaged with making sure that you had bottomed everything out before we got to site.

The vision that you had in your head, do you remember what you thought it was going to be like and and and what it actually ended up being?

Alex: I think when you do this for the first time, it’s incredibly hard to visualize what is on paper into reality. But, I think I benefit from probably having gone through that process myself in a professional way, my profession many, many times. What is totally unknown is really all that selection of fixtures and fittings and whether it’s all going to work as a cohesive scheme.

That is really hard and takes a lot of, a lot of thinking and discussing and debating. I mean, I’m not, I’m going to, you know, confess right now that I think Alessandra, my partner, had a really clear understanding on the interior scheme. And I think alongside Amy and what was drawn up, I think she had a very clear vision that at the start I didn’t really kind of appreciate, but by the end, I, I think I really, you know, understood.

Because as it started to come together, I really started to respect some of the decisions that she fought me hard on. And I think that’s you’ve gotta trust each other a little bit. You, you, you’ve not gone through this before.

Yes. You planned a wedding. It’s very different. Well, you might planned a but really what’s your other, what other experiences do you have of projects beyond

Jane: Like organizing a big project together where all of the different attributes of style, money, program, you know, all of those things colliding.

Alex: We didn’t have to compromise too far. There were a couple of, you know, there were a few kind of things they had to give, you know, as they always are with, with these things, whether, you know it’s a budgetary concern or well, if you do, if you make a certain decision on X, you know, fixture and fitting, then you almost need to carry out the rest, which means you’ve got an elevation usually across an entire room.

In terms of the way you, you approach it aesthetically and stylistically. But I think if we step back for a second that there’s something about values and I’ll always quote Alessandra with this to sort of her mantra, you know, buy once, buy well.

And if we look at that strategy that was across the board, do you know everything from like handles on doors was of a very high quality. The, you know, all the bathroom fixtures and fittings were, were really good products. That way lasted our time in, in the property.

And I’m very friendly with, with the, person who subsequently purchased the property, it’s still lasting and doing really well in there.

Jane: Yeah, we’re still looking good years later. It is all a matter of budget, but there is a part of your mind when you know that you’re gonna move on from a house. You kind of feel like. We’re investing a lot already in the house and you know, we’re not gonna be here forever, so we’ll, we’ll, go for the cheaper option there. But as you say, you know, to have a house that you’ve put that much time and energy and effort in, still looking as good as as when you finished it, when you come to sell it is obviously an amazing thing because you are passing that value onto the the next person.

Alex: Jane, I think, think you’re touching on something quite interesting cuz also fundamentally we never saw ourselves selling it or leaving it. This is the other thing I think when we set out the brief, it, the first line was, we want to build a home and the home was going to be firstly for us two as professionals living in London eventually to start a family.

Certainly one child, I think where, where we got a little bit out of kilter was having a second child, cause then the space didn’t fit our lives anymore. And it was really kind of sad, like to realize that, I mean, obviously we were delighted to have a second child that was our choice and we, we’d never go back on that.

But the moment we kind of pulled the pin on that grenade, the timer was set to a point when you are going to to, to consider leaving. And this is kind weird because I would never have seen myself leaving that property unless we essentially had too many humans in it. And, and that’s what, what eventuated.

Amy: I really remember actually having conversations about a basin being the right size so that you could bathe your, your baby to be.

Jane: I just remember thinking that was so lovely. The basin is the thing that I, always think about of your project.

Amy: But I loved always how how closely you guys saw the things that you were choosing as so integral to your life and how you were gonna use them. I think I haven’t seen such a connection um, with other clients and I think that that really, comes across in the project.

Alex: I think the basins is a, is a really good highlight of, that point that you’ve raised, because I’ll tell you a bit more about the basin so when, when we sold property, we actually were going to rip the basin out to take it with us. It ma it mattered that much. And it mattered even more when we went back to where we purchased it, no longer available. This thing does not exist anymore, which is even harder for us to kind of, I mean, it’s not like we’re bathing babies in it, but it, served a number of functions in a relatively small property where you don’t have the luxury of a laundry room, like where do you hand wash things?

Right? I mean, it’s, it’s an obvious one when you think about it. If you think about it, and when you sort of stack up, why do we need this particular basin? What does it need to do for us? And why should the the tap be of a certain design to allow certain things in and out of that basin.

I mean, it is quite rigorous, isn’t it, when you, when you think about that, that product selection.

Jane: Want to be able to fill a, a bucket of water.

Alex: Yeah. Or plop little people in and out of it.

But Yeah. the basin, yeah, we really wish we’d taken that with us.

Amy: Yeah. So I guess moving on if we talk about tender. I know we went to competitive tender. Did you have some builders in mind?

Alex: I think we brought one, we brought one into the picture. I think you guys brought two. We had then, then three to reflect upon. I mean, there were wildly, I, I’m gonna confess, I mean, we just had to be led by you a lot at that point. We had no clue we were looking at. And it, it, again, it came down to who do we trust

I mean, but also to meet the level and finish and our, our overall objective for the home. If I look at the price range, I, I think we had a, a working budget of about 135 from memory. No, 130. 130 was our cap, right? And I think it. they came in from somewhere like 80 grand to about 160 or 70. So there was a full range, and, and I think we settled on that, that middle, that was ever so slightly below the available budget. Yeah, tricky. I, I mean, I think the key lesson is the rigor everything is in there, that everything you’ve requested is in there. And I think the other thing, taking out your fixtures and fittings and taking on the amount of work that you are willing to do for the project is a really key decision at that point and a good one that that we, we managed that side and I all the ordering.

Amy: There was your spreadsheet.

Alex: Yeah, it was mega.

Amy: Which actually I think came in, in use later in the projects. For sure.

Alex: As I said, I think tender was a very quick process. It was the quickest thing we did. Mainly because it’s a window of opportunities to get going and, and I, and we understood that you’ve just gotta get going.

Amy: Press the green button.

Alex: Yeah. And I think we were encouraged by the fact that you worked with the contractor before. I think, again, reflecting back onto the quality, this is really the key. You know, if you know that a contractor can meet that level of quality, that’s really what you want to know. What we don’t didn’t know is how keenly, you know, costed that particular costing was and against others.

And what, what, what is the true value of our build? I mean, you don’t discover until the end as we’ve discovered, so,

Amy: Yeah.

Alex: yeah.

Amy: So how would you describe it going on site?

Alex: So we obviously, we moved out of the property for obvious reasons. We weren’t there, but we were there every morning for site inspection every afternoon at the end of the day. We obviously had you guys also checking the milestones and signing off on key milestones which was, which was very helpful.

And obviously we didn’t project manage it technically. I think everything went very well, seemingly very well. The demolition was, you know, immediate and you could see the forms being put in place. I think the, the first kind of red flag, in fact, something we didn’t pick up, I think you did, where they were off drawing on a key structure element that would essentially have meant there was a beam all the through a staircase something crazy like that. That, and I think this is just novice, you, you wouldn’t know. But, you know, that’s why we, we engaged architects the first, the first time round because you, you, what would happen if we were PMing that at that point and, you know, it would’ve been it could have gone much further.

and had far worse impact. So that was my kind of memory of staying really, really with it. I mean, every level at every detail really look hard. What an earth’s going on here? Really ask the questions and get the answers. I think one good illustration of that was around the rooting of the waste and water flows and things from the, from the upper floor, where in theory it was drawn, but in practice it had to be kind of almost like figured out. It was like, you know, these pipes are wide and, you know, wieldy and difficult to turn corners and things.

And it had a very kind of complicated route. And I just remember all of that and just going, okay, we need to keep our a check on this cuz if cuz it’s gonna get buried in a building, this pipe work is covered up, and I think that’s another thing to remember is that look behind the scenes.

I mean, really look about how things are made and what the construction technique of it is. Because once you finish, it’s yours to maintain. And if you bring any future trades in, you really need to understand how it, how it works.

Jane: I think that’s a really interesting point because. As an architect, we can look at the building. We have, as much information about the building as we can, but at the end of the day, the thing that’s drawn on paper is a best estimate because until you take the building apart, there’s literally no way that you could know that that joist is sitting in the wrong place or. You know, that’s the, the thing about things happening on site it’s often hard to explain what these queries will be, what, what are all these mystery items are that we have to resolve on site and trying to explain that to somebody ahead of time. But it’s things like that, on every single project have to be worked out, and that involves a decision making process and signing off and and that really needs everybody’s heads together. Because, you know, the contractor has an idea. You want to check that it fits with what what’s happening in the bathroom. The architect’s checking whether that’s gonna have implications for other things.

And I think that’s what makes site such a rollercoaster and so demanding is these things that are are cropping up all the time.

Alex: Yeah. Yeah, I think, I think you’re spot on. I think. the decision making, because even though you, you’ve got no past experience of making a decision of that nature, you are, it’s about gathering the intelligence. Like, okay, what do I need to know to be able to inform my decision?

But sometimes it’s so damn fast, you know, it’s so time critical. You’ve almost kind of got like the gut, but also professionalism and experience and somebody saying, look, it’ll work. It’ll be fine. And you kind of just have to just go, okay. But the moment you make that decision, watch it like a hawk because it’s at that point that things can go, can go wrong, because you’ve, you know, you need to see that decision through.

And you might need to make another 10 off the back of it.

So I guess my memory of site was that it was going really well and then we had had a builder who who went into quite serious financial difficulties.

Amy: Do you want to talk a little bit about, about that?

Alex: Yeah, So the context is obviously our contractor had a, a very large project elsewhere in London that had run into some, some real problems.

And as a consequence, it created some cash flow challenges for him. I think it took him a bit of time to figure out how to be authentic to the situation that he was in.

I’m not sure we uncovered it because he did a good job of just keeping everything kind of going. But then when sort of key materials were not, you know, we are checking where’s this, where’s that? It should have arrived by now. It started to dawn us that we had a problem. And to be fair, I think it was his authenticity that allowed us to get over this very difficult, you know, hump and, and find a pathway to completion that involved all of us really knuckling down to figure out how to, to solve a very unusual set of circumstances. You, you, let’s go back to the humanity side of it. You’re dealing with people and you are, you’re dealing with contractor who you know, you can see, he cannot eat, he cannot sleep, he is absolutely, you know, a broken, broken man. But he, he cares very deeply and passionately about his business, about the projects he works clients, about his his relationships with his architects. And you see all of it as breaking him. You know, and as a client, you could take two routes here, you, you, you sort of like, be off with you and no more money and, know, cut ties.

Amy: See you later

Alex: See you later. Or you look at what you need to take back control of and work out what the gap you are bridging is. Uh, ie., how big a problem have we got financially to, to look at and find a way to, to complete. I mean, we were literally, I think it was September, we were, you know, month, six weeks off, you know, but it was, how much had, not kind of happened, shall we say. That fell into that final fishing period that was quite daunting. So let’s talk about really the solution. I mean, the, the quality and the finish of the contractor, that had to be re retained. And We need to take back the financial control of the project.

We need to make sure that contractors are paid because there’s a business that is not liquid, essentially running this project. And I think we had some very long and tough decisions where it was, okay, we are essentially going to be facilitate the business and get this project finished and take over all payments, everything, including all labour.

I mean, I, I, I’ll never forget going down to the bank on a Friday morning to withdraw 5,000 pounds of cash every Friday to pay the contractors and subcontractors and, to keep this thing moving. Cause if it had got to the point where we killed the contractor, I think we all knew that’s, that’s down tools and that’s, that project may never come back.

I seem to remember in about August, we go, oh, everything’s going so well. Let’s plan a kitchen. We never sort of, you’ll probably remember the same. We say, we’ll plan a kitchen, because I think we can do this now. Excellent. Okay, and then, you know, literally about three weeks later, it’s like, ah, Yeah, no, we, we, we are not gonna have any money for the kitchen.

In fact, we really need to kind of you know, tighten our straps and, and get just to, to a finish point on this.

Amy: In my memory the big items were in, weren’t they, the, the stairs and the roof lights and the windows. It was quite, it was at that kind of difficult point where it looked very unfinished because it was like the finishes and the fittings and that kind of thing.

Alex: The flooring was the main one that was in contract and not ordered. I think that was about seven grand from memory.

Glazing was in, Yeah. we were sealed. We were sealed. We had a shell for sure but there were lots of things that had yet to be sourced and paid,

but really most of it was labour, it was just getting the thing completed.

Jane: And the spreadsheet.

Amy: Yes. I, I think that just came to be the most fundamental item. And I think we were very keen, obviously as the architects to get this project finished, as you say, but also ensure that you weren’t overpaying for any of the items. So I think that’s why we did end up going into this. You were paying for materials and kind of like the solid, quantifiable things. And I think that did enable us to get over the finishing line. But I think the project was even more of a success because everybody, even the contractor, he was doing his part to, to get it finished. You were going beyond the client’s normal role to get it finished. You know, we were all on the same page, which I think is so rare in, in a situation like that where it’s going wrong. I think it’s difficult to suddenly have to be managing frustrations and, and the kind of, the fallout, I guess, of things going wrong. And, I, I do remember that you guys even at that point were able to, say, do you know what this is, this is the goal that we are aiming for.

And, and I think to be fair on the contractor, he, he was so beside himself that he couldn’t do this. I mean, I remember feeding him toast in our office because he hadn’t eaten. And the emotional side of renovating maybe doesn’t get talked about that much, but, you know, there was also your emotional side, which is, this is our money, this is our home, this is our future home. It definitely was a pressure cooker, I would say but I think that attitude of all coming onto the same page I think was so key to getting it over the line.

Alex: I think, I imagine it’s incredibly easy to start pointing fingers and playing blame games and even, you know, being litigious about things. But the, but truth of it is, is that, you know, Alessandra and I are really in our professional eyes used to building teams, which involve not only funders, people who are giving us money, but also people who we are contracting to do things on our behalf to meet that funder’s goal.

And essentially, we both take the approach that that’s a team it’s a team effort. And it, yes, there’s contract and money, but, but ultimately you have to behave like a, a team when in crisis and you need to realign. And I think what was interesting after the initial shock, which we got over very quickly, cuz it’s just becomes a problem solving exercise essentially.

And I think you are, you, we are all lucky that we are able to kind of put those hats on very quickly. To not only decipher what the current state of play is, then be able to calculate and work out how to move forward, and that that required a team effort.

Jane: If you could give advice to someone else starting this process that hasn’t been through a renovation, what’s your number one piece of advice for them?

Alex: I’m always gonna say it’s, it’s planning, you know, it’s, it’s like you don’t bake a cake without reading the recipe. And, and more so, go deeper, you know, where, where are those ingredients coming from? Unfortunately with renovation, you only get to bake one cake.

So therefore, your preparation needs to be as, as good as you feel you can humanly make it. And I think if you’re going into it with somebody else, cuz it’s not a solo exercise. I’m sat here in this podcast on my own, but there’s a 50%, if not more of a, not sat here reflecting upon this, this process.

And I think you have to be really clear together on what you are, what you are doing. I mean super clear and you need to work out what compromise looks like before you enter the project. You need to figure out what compromise is when you’re planning the project, because that’s gonna test your ability to compromise, make decisions that sometimes you don’t even know what the result of that decision is.

It’s just a kind of trust exercise. But it’s all in the planning. Make sure you’re ready, you know, be really ready. Be confident that you’re ready, even though you’re probably not ready,

Amy: So I guess to kind of try to draw to a close did it put you off renovating

Alex: No No. mean just, just fundamentally, no, it was one of the most exciting, challenging incredible journeys and, and to take. , you know, my partner and my wife and I, you know, it, it, it’s something we look incredibly fondly on because as, as we finished and lived in it, everywhere around you was the stamp of your effort, your time, your consideration.

You know, you look, and I’ll go back to like basins and door handles, it’s so small, but yet it matters so much that you argued over. Finish on your handle so that every time you use it, you, it brings joy to you. And to share that enjoyment as a joint goal is worth repeating.

And actually, you know, we’ve got, we’ve now obviously moved on from, from that due to the size of the family and we have bought a property that requires renovation, and we are really excited about doing this one, but I, I think going right back to one of your key questions, how long did it take to plan this thing? So if, if Reighton took five years of three years of incubation and let’s say a year of rigorous planning before conversations with, before planning before the execution.

Five years. Okay. And we’ve been here now two and a bit. , I’m, I’m curious to know when we feel we’re going to be ready, to do another one. And when we initially bought it, we thought we would literally not unpack, we would just like do the work incredibly hard and rigorously and, and get the project underway in a, in a much more compressed timeframe.

I guess you’ve got the confidence of having done one already. You know, an extensive amount about what you need to, to know before you embark on this. But I think with Covid, it, it was in, it, it sort of presented an opportunity for us that we didn’t think we would need.

But we ended up living in this place sort of in its decrepit state and started to look at things like the light in more detail, started to rethink some of our initial thoughts that, you know, when you go on a house viewing and you dream up these big ideas about what you’re gonna do with a, with oh, we’re gonna do this, we’ll do that.

And you know, and you know, if you literally went with that road map and then went and built that thing, you might find you didn’t build what you want. Because your insight into the property, the site, the light, the way the property sits in its environment, you haven’t had time to appreciate that yet and to really think about it.

And I think now, two years later, we really understand this place and now we can start to make some progress on, on the brief again. And what is this project all about? It’ll always be about light though.

Jane: I think that that really sums up your journey and we’re both looking forward to seeing what you’re gonna do with your new space. When you feel like you’re ready!

Amy: Thank you so much Alex, for being with us. It’s a pleasure to have you and to reminisce together.

Alex: Thank you both. It is, it’s wonderful to talk on it again, even though there’s this, tricky kind of section of it. Bizarrely the whole thing is still filled with joy. Definitely would do it again. And, and it’s wonderful to still speak to you guys and be so friendly and, you know, that be the outcome.

I think that that’s a testament to us all actually.

Amy: Oh, thank you so much.

Jane: Thanks Alex.

Amy: If you’d like to see the photos of Alex’s finished project, go to our website at homenotes.co/storiesfromsite.

As Alex said, preparation is key to getting the home you want, but it can take a very long time to go from thinking about renovating to actually having the information to press go.

That’s why next week we’re doing a special version of our Getting Started course called the Seven Day Reno Sprint, where we take you through all the preparation work you need to do in just one week so that you can finally get started on getting the home you want.

Head to our website at homenotes.co to see what’s included and get a 50% discount on our regular price. Plus we’re throwing in a 30 minute power chat with either Jane or myself to make sure you’re on the right track. Don’t miss out on this super special offer. Booking closes this Sunday, 23rd of April.

PROJECT PHOTOS:

Our closing thoughts:

This story from site is a testimony to how important every member of the project team is, and how individual attitudes affect the success if a project.

If Alex and Alessandra had lacked compassion for their builder struggling, or if their builder had gone MIA instead of continuing to communicate, or if we the architects had panicked, it all would have been a completely different story!

If you’re in the thick of it at the moment, hold tight and keep steering the ship through the storm.

 

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Stories-From-Site-Camilla

20. The ugly duckling: Transforming a 1960’s house

This week we speak to Camilla who’s renovation journey started during lockdown when she and her husband realised they needed more space for their growing family. After an initial dream of finding a period property they fell in love with a 1960’s property which needed a complete renovation.

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Stories-From-Site-Nic-Cover

19. The secret garden flat: self-build extension

This week we talk to Nic who, together with his partner, self-built a garden studio and extension to their 1 bedroom flat.We talk to him about his decision to take on a self-build project, the process they went through and what he would do differently next time.

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Stories-From-Site-Tamzin-Cover

18. A blank canvas: bringing a home to life

We talk to Tamzin who explains why, after renovating previous properties, she chose not to take on a big renovation for her current home.We discuss the joy of getting creative in your home, being savvy with up-cycling interiors and her process of turning a blank canvas into something special.

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Stories-From-Site-Hannah

17. Unexpected discoveries: The cottage renovation

We talk to Hannah who is midway through renovating her thatched cottage in the countryside and the downsides of renovating an old property.

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Stories-From-Site-Siobhan-And-Joe-Cover

16. Grabbing an opportunity: developing a garden site

A serendipitous chain of events led Siobhan and Joe to quickly move from a finished flat straight into a building site with development potential.

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