QLD Builder Gone into Administration - Consequences?

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Bessie QLD

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17 November 2017
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We recently undertook >$50,000 worth of renovation work with a licensed builder. We have almost reached the end of the build with minimal items outstanding, and only owe the final payment of 5%. Our builder has since had their licence suspended meaning they cannot continue work for us. We have heard through the grapevine that they are in administration.

The electrician, their subcontractor, has not been paid by them. He has chased his debt of $1,600 for 120 days, and has had no response from them even after he enlisted the help of debt collectors.

The electrician has now approached us directly demanding payment, threatening to send the debt collectors to us next week if we don’t pay.

Our builders advised us to pay the electrician directly and not to worry about the remainder of the final payment.

We are happy to do this but want to check we are legally ok to do this, and that there won’t be any negative repercussions for us?
 

Rod

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Get a release in writing from the builder first.
 

Rob Legat - SBPL

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Sorry Rod, but no. If the builder is in administration, they can no longer make the decisions. It's possible that paying the electrician directly may also result in a preference payment.

Inform the electrician that you are in suspense just like they are. Direct them to the administrator, and let the administrator make the decision on payment.
 

Rod

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Hmm, OK. So first step should be to find out if the rumour about the builder being in administration is true. If they are, then see Rob's comment above.
 

Bessie QLD

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17 November 2017
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The electrician is only owed $1,600 and has told us the administrators won’t get to him as they will be dealing with the larger payments. He is chasing us as he knows he won’t get his money otherwise.

Our builder has emailed to say they won’t chase our final payment and we should pay the electrician to get rid of him.

So confused.
 

Rob Legat - SBPL

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People get 'dudded' in administrations, it's just a part of it. However, that is not your concern.

The 'builder' is no longer in control. That's is what the administrator is for - they step in and make the decisions because the old management have demonstrated they are unwilling or unable to do so. The builder should not be giving anyone directions anymore about anything.

If you pay the electrician, you may find the administrator still holds their hand out for you to make the full payment.

I suggest you do the following:
1. Find out whether the builder is actually in administration. Ask the builder who the administrator is. If they can't/won't tell you, there's probably something fishy going on.
2. Contact the administrator. Tell them who you are, and that you've been asked to pay the electrician directly.
3. If they say yes you can - get it in writing from the person actually appointed administrator - and then you can pay them.
4. I think your odds of getting 3 are slim to none. In the alternative, wait for the administrator's directions.
 

Clancy

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6 April 2016
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I take it the electrician is contracted with the builder and is not contracted with you?. So the Electrician is crazy thinking he can claim from those he has no contract!

Did you have any say over which electrician was used or what they charged? No - what does that tell you? The electrician is none of your business.

Just make sure you comply with the obligations of the contract YOU signed if requested, and nothing else.