Your Builder Walked Off the Job or Went Bust: What to Do Now

First 48 hours: secure the site and record everything

Do these things before you argue with anyone. They protect you whatever happens next.

Keep your messages calm and factual. They may be read by a solicitor, an insolvency practitioner or a judge later.

Why builders walk off jobs

In our experience, builders rarely walk off out of malice. Usually the cash ran out.

A firm wins a job with a low price. Halfway through, the money coming in no longer covers wages and suppliers. Maybe the job was under-priced. Maybe a payment dispute stopped the money. Or the firm took on too many jobs and can't staff them all. The builder goes where the next payment is.

The numbers back this up. The FMB found that 22% of people who hired a builder had jobs left unfinished.

The Insolvency Service figures show construction had more company insolvencies than any other industry. So set up your protection at the start. It is much harder to recover money afterwards.

Walked off or gone bust: find out which

The two need different responses, so find out first.

1. Search Companies House. Look up the company name and number from your quote or invoice. The status shows if it is in liquidation or administration.
2. Check The Gazette. Insolvency notices are published there.
3. Read any letter carefully. If an insolvency practitioner has been appointed, their name and contact details will be on it.
4. Check if you hired a person or a company. A sole trader is not on Companies House. Your route is then against the person.

If the company is still trading and simply stopped coming, the builder has walked off. If it is in formal insolvency, a different set of rules applies.

If the builder walked off the job

Start with a formal written notice. Say what work is unfinished, and give a reasonable date for them to return. Keep a copy.

Then read your contract. Look for the termination clause, the notice it requires and how unfinished work is valued. Follow it exactly. If you end the contract the wrong way, you can end up in breach yourself.

Under the Consumer Rights Act 2015, a trader must do the work with reasonable care and skill. Where no time was agreed, they must finish within a reasonable time. If the builder doesn't return, you may be able to claim the extra cost of finishing from them. Claims up to £10,000 can go to the small claims track.

Homeowners are mostly outside the Construction Act. So on your own home, a builder's right to stop work over unpaid money depends mainly on what the contract says.

If the company has gone bust

This is the hard part. Government guidance for creditors is blunt. Unsecured creditors like you are paid only after the insolvency costs, secured creditors and preferential creditors (such as some employee and tax debts). If the company has few or no assets, you won't get your money back.

What you can still do:

1. Register your claim. The insolvency practitioner will send a proof of debt form. Fill it in with your evidence.
2. Expect updates, not money. Reports are usually sent within 12 weeks.
3. Check how you paid. Citizens Advice says Section 75 covers credit card payments for items costing over £100 and up to £30,000. It can cover the full cost even if only part was paid on the card. A debit card chargeback covers only what was paid on that card.
4. Check for a guarantee. If you bought an insurance-backed guarantee or deposit protection, read what it covers and claim quickly.

Materials on site may not be yours just because you paid for them. Ownership can depend on the contract and the supplier's terms. Ask the insolvency practitioner before you use or move them.

Commercial and developer projects

On commercial and development jobs, the protection is set up in the contract, long before anyone walks off. Ask for it at tender stage.

1. Performance bond. A third party pays out an agreed sum if the contractor fails.
2. Parent company guarantee. A larger group company stands behind the contractor.
3. Collateral warranties. A funder, buyer or tenant gets a direct claim against the contractor or consultant.
4. Step-in rights. A funder or owner can take over the contract if the contractor fails.
5. Payment against work done. Monthly valuations, ideally checked by your own surveyor.

Lenders usually appoint a development monitoring surveyor to check progress and cost. Early contractor involvement through a pre-construction services agreement gives you time to test a contractor's finances before you commit.

Retention money held down the supply chain is often lost when a firm fails. Our guide to retention in construction explains how it works and the proposed ban.

Getting a new builder to finish someone else's work

Here is an honest warning from the builder's side. Finishing another firm's job almost always costs more than the unpaid part of the old price.

To get a fair price, give the new builder everything you collected in the first 48 hours. Ask them to separate the price for checking and repairing earlier work from the price for finishing. Our guide to construction contractors covers the checks to run before you hire again.

How to protect your next project

Most of the damage is decided by how you pay. Use a deposit tied to materials and the programme, then stage payments against work done.

Our guide on how much deposit a builder should ask for explains how to set a safe payment schedule.

A builder walking off is a shock, but a calm sequence of steps limits the damage. Ready to talk to a new builder about your project? Book a site visit.