Landscapers and Builders (Sub-contracting Issues)
A fairly recent phenomenon affecting the professional landscaping industry is the inclusion of certain buildings – outdoor kitchens, living rooms, gyms and dining areas – as part of the remit of a garden designer or design and build landscaper. Probably since the beginning of covid, when customers wanted a complete out-door living experience as people were unable to travel or leave their premises.
Swimming pools and tennis courts were other aspects of this Brave New World, although they have been part of landscape projects for many years.
Those who were able to afford it, decided to bring their social life to within their own boundaries, by engaging a designer to create a living space to suit their (often very high) budgets, with everything being installed under a single contract. Not wishing to be bothered with dealing with individual companies, they wanted everything to be contained in a single contract, with either a Project Manager or Main Contractor responsible for the whole package.
As the primary reason for commissioning a garden makeover was the landscaping element, with everything else seen as ‘bolt-on’, (along with a host of life-style projects, including hot-tubs, fire pits, play equipment, mini-golf, etc) including outdoor buildings as previously mentioned, the whole package was to be installed under a single contractor – usually the landscaper.
Having been privy to a number of these complete package style contracts, it is easy to see the attraction on the part of everyone concerned. A single project manager, single designer, single supplier/installer of the buildings/swimming pool/tennis court etc. and single main contractor – the landscaper, with the customer making stage (and all other) payments to the single entity.
As the main contractor, a management fee of between 5% and 10% is standard, depending on the values involved. For every £1000.00 due to be forwarded to the sub-contractors, the landscaper receives £50 – £100.00 for handling the monies by making payments to the various sub-contractors with the customer paying only one party – the Main Contractor – on each tranche of the project value at regular agreed intervals as stage payments.
This may be attractive to the landscaper, as they receive a percentage of even high-value items such as buildings and their facilities.
Where problems arise, is when one of the sub-contractors fails to perform in a timely manner, by non-performance or faulty workmanship, as each issue can affect the whole money chain along the line if the customer decides to withhold payment for any reason.
In each case, even if the project is being (correctly) run under a Construction (Design Management) Regulations 2015 programme, it is unlikely that the main contractor (landscaper) has taken on board the terms and conditions of the individual specialist sub-contractors, and had not made written submissions regarding the veracity of the other firms to override/supersede theirs.
Builders may well be working under the banner of the Housing Grants, Construction and Regeneration Act 1996 (amended 2009), or Scheme for Construction Contracts 1998, whereas the landscaper may be using the standard Consumer Rights Act 2015 for their guidance.
Builder’s standard payment terms are called ‘milestones’, with 50% payable with order, 40% on commencement with the final 10% on the day of completion. Note; ‘completion’, not allowing for any snagging or problems to be raised. 90% of their work is paid for before they even complete any element of the construction.
In the case of a dispute, who would decide which Act takes preference? Presumably, the sub-contractor if their terms were clearly stated at the time of signing the contract, thereby taking precedence over the main contractor.
Assuming that the builder was relying on the above 1996 Act, they would have to issue a notice to the main contractor called a ‘Failure to Pay Notice’ or the landscaper would have to issue a Notice to advise the sub-contractor that they were not intending to make further payments until certain matters had been resolved. Failure to produce these notices at the appropriate time would/could be a breach of contract.
It is standard practice for a sub-contractor to have their terms of payment set out in full in advance of signing the contract. These normally allow for the final 10% to be paid on completion. If the customer is withholding payment against any sub-contractor, they will also be holding monies due to the main contractor (and any others involved in the scheme) so it is imperative that all factors are taken into account before deciding to act as the Main Contractor for any multi-discipline landscaping project, no matter how persuasive the client or attractive the package.
Also be aware that the sub-contractor’s terms and choice of remediation may well include working with an Adjudicator in the event of a dispute, provided by The Royal Institute of Chartered Surveyors, (RICS) whose members are well versed in construction/building, but may not be in landscaping, putting you at a major disadvantage. The Adjudicator’s decision is final, and the whole process complete within 28 days of referral.
(The complainant/builder is known as the Referring Party, and the landscaper is called The Respondent, which are different from the more usual Plaintiff and Defendant used in standard Court cases)
