Protect yourself from Bad Builders in the Philippines

 

I would like to discuss a little about how to protect oneself from the unprofessional, untrustworthy builders.  

This discussion is in no way supported by any builders, businesses, or ads, just a typical customer/client learning from his mistakes of trusting a contractor too much.  Hopefully any future home investor doesn’t fall for the same tricks from the many dirtbag contractors that exist here. 

The Philippines may have many appropriate laws, but enforcement is much to be desired and contractors take advantage of that.  The best thing to do to avoid getting ripped off is your diligence and research.  Readers, please comment or contact if you know a step that could help others. Education can help get rid of these bad actors by denying them of potential victims.

Here is the guidance:

1. Don’t trust anything a contractor says without verification
2. Ensure engineer is registered in PRC and business should be under PCAB.  See Contractors License Law RA4566.  Is it illegal to operate without a PCAB license?
3. Demand a Surety or Guarantee bond and verify.  Know how to file a claim if necessary.  This will help assure performance and your risk so don’t skip this step.
4. Demand building permits before any construction starts.  Although permits could be accomplished during construction, it provides less incentive for the builder to accomplish that task and opens the risk that construction design has non-compliant features.  Revising a blueprint is less costly to fix than tearing down a wall.
5. Don’t take a final quote or estimate based on cost per area only.  It should be itemized what materials are required and by how much.
6. Get multiple quotes no matter what.  Don’t fall for the salesman pitch of ”act fast or else”.
7. Ideally one should buy/deliver the materials vs getting the builder to buy.  The sleazy builder will inflate material prices and give you the cheapest materials so one should verify material receipts and delivery.
8. Ensure workers are properly supervised and supervise the supervisor.  Contract should allow owner to enter worksite for periodic inspection.
9. Contract should be reviewed & notarized with your attorney, not the builder.  Even better is your attorney write the contract for your protection. Be sure there is performance timelines for payment in the contract. 
10. Contractor will submit request for payment in writing along with progress report with an evaluation period before payment. Progress report must match performance timeline goal.  If goal is not met, get in writing/notarized for explanation and remediation.  Decide if worth continuing. Here is another guide.
11. Down payment could vary  between 10-30% but more likely the higher end.  For added protection, try breaking up the contract into some major parts.  Example: contract for perimeter wall only and review results.  If all is well, contract the house foundations and structural, then interior. Limit the commitment.
12. If there is a natural event that could cause work to stop, contractor should provide explanation. 
13. For legal sake, just remember: “If it’s not written down, it didn’t happen".

    With these steps, it is quite likely you will turn away many builders, but with the costs involved, it is     better to take your time to be careful for such an important endeavor.  Keep the power!