The Property Redress Scheme has recommended industry professionals join a new initiative aimed at reducing disputes between consumers and builders.
The PRS has backed the Home Improvements Guarantee Scheme in a bid to try and reduce the number of expensive incidents between builders and consumers around the country.
PRS head of redress, Sean Hooker, said: “Agents are often asked for recommendations for builders by clients and I am happy to say that the HIG is a worthy solution, strengthening the bond between builder and clients and adding value to the service.
“Both the consumer and the builder are protected by the scheme and the agent can also benefit with a share of the commission”
Agents and any other professionals who recommend the HIG will earn a commission for any work carried out through the scheme.
The Home Improvements Guarantee vets builders from all over the country and then arranges quotes from three traders to maintain competition during the tender process.
All builders must agree beforehand to sign up to the terms of the guarantee before bidding for any projects.
It is the brainchild of Harvey Ellingham, an electronics engineer, builder and businessman who had the idea after his elderly parents were ripped off by cowboy builders for £23,000.
The scheme works like this:
First, the work is split up into various stages, and a timescale or deadline is agreed on for completion of each stage, and the whole job.
Then the money for the first stage of work is placed into a Financial Conduct Authority regulated holding account, and is released to the builder only when the consumer is 100% happy with the work and agrees to release the funds.
Then the builder can continue with the next stage of the project.
Once all the stages have been completed, and the consumer is 100% happy with the work that has been done, the final payment is released. If any extras crop up along the way, the homeowner must sign and agree to the extras being carried out. The extras are only paid for when they too are completed.
The scheme is free to consumers because the builder pays a levy equivalent to 3% of the net value of the job (i.e. net of VAT) to HIG in return for being on the database of recommended builders.
The competitive nature of three builders competing for the work helps ensure that they do not pass the cost on to consumers.
The scheme also offers an insurance backed guarantee which provides additional security over and above the tradesman’s own guarantee. It is valid for up to 10 years and insures the homeowner against the tradesman going bust, disappearing, or problems with the quality of the work.
