Builders Deposit Before Starting Work

Reviewed Feb 2017A house alteration client had a design done and fully documented for a building consent by an architect, but undertook all the job observation and management from thereon. Of the three builders quotes, two were within 5% but she accepted the one that was 25% lower. That builder extracted a 40% deposit before starting.There were no variations of any note, the client paid promptly on all claims, but may have been a bit tardy in making some decisions on materials and finishes. After significant delays, the builder quit the job having been paid all but $6500 of the contract value. It then cost the client another $100k to fix the builder’s stuff-ups and complete the work.The architect has apparently done nothing wrong, but from a risk management view, it may have been mutually beneficial if the client had understood the risks of proceeding to run the project on the basis of the architect’s partial services!

  • Did this architect “dodge a bullet”?
  • Did the architect have a duty to provide advice even if it was not sought?
  • Should the client have been able to fully recover the losses from others?

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