If your contractor goes out of business, it can be a stressful time as pressure mounts on all involved.
However, there are steps you can take to prevent this from happening.
Protecting yourself from client insolvency
Insolvency occurs when someone is unable to pay debts or their assets are less than their liabilities.
There are a number of signs that your contractor may be insolvent.
This can include delays with payments, work on site slowing down or difficulty getting credit from suppliers.
It is most likely that work will stop, leaving you stuck with no progress – this can continue for months.
What can you do?
It is important to take action. In most projects, construction contracts are used. You must ensure you follow the correct procedure in order to make progress.
Things you should take into consideration include securing the site and materials.
You should also read your contract to understand the conditions set out for termination and insolvency.
You also need to understand whether the work can be completed or not. It is likely that the contractor’s employment contract will be terminated. You can then employ another contractor to finish the project.
Throughout the process, you should ensure all paperwork is up to date, and remain aware of signs of financial trouble.
If you need advice on related matters, contact us today.