Is your builder asking for more money to finish? Best case scenario, the builder is up to date with payments & genuinely requires help to complete the project. Far worse is when your builder has been cash flowing other projects with your money.
While you may never know the true cause of the shortfall, the least disruptive (and least expensive) course of action is often to ‘help’ the builder.
But there is another problem: your builder will be working on multiple projects at various stages of completion (& likely, distress); how do you know that any extra payment you make isn’t immediately being shifted into the builders’ other projects?
IPEX is an online payment platform that places practical limits on how a builder can use project funds. Builders can access payment for their preliminaries, margin & direct costs, but the balance of each progress payment is set aside & off limits – these funds can only be used to pay subcontractors & suppliers linked to the project.
Rather than relying solely on a ‘stat dec’, IPEX allows project managers to verify that those linked to previous claims have been paid as expected before certifying the most recent claim.
Whilst ideally used as a preventative tool, IPEX can also be engaged mid-project to help developers/lenders to ensure that any further payments made into a distressed project are paid under controlled conditions.
Ring-fence all further payments to your project.
Stop payments from being used to cashflow other projects.
Validate ‘stat decs’ to confirm subcontractor payments.
Target specific subcontractors & suppliers for payment.
Act on ‘step in’ rights before your builder goes under.
Protect funds already paid to builder in the event of insolvency.
No change to builder processes & no impact on builder payment.
RING-FENCE ALL FUTURE PAYMENTS TO YOUR PROJECT
IPEX prevents your payments from being used to cashflow other project/s linked to your builder – only subcontractors & suppliers working on your project can be paid out of the project account.
Making any agreement to contribute additional funds conditional on the use of IPEX is the safest way forward. By agreeing, builders are confirming that their request is genuine (a payment through IPEX doesn’t help their position on any other project), whilst developers gain transparency & certainty over how funds are spent for the remainder of the project.
ISOLATE SPECIFIC SUBCONTRACTORS OR SUPPLIERS FOR PAYMENT
In addition to ‘ring-fencing’ funds to your project, IPEX can also further limit how funds can be distributed by the builder down to isolating a specific subcontractor or supplier that those funds are owed to; funds deposited into the IPEX account can only be paid to that entity.
This is ideal for payment of supplier deposits or specific overdue invoices – the developer/lender can ensure funds reach the intended recipient without the risk/admin involved with having to step in & pay them directly.
Once all payments associated with the ‘variation’ request have been made, these controls can be removed.
PROTECT FUNDS ALREADY PAID TO THE BUILDER IN AN INSOLVENCY EVENT
Should a ‘payment default’ event occur before completion of an IPEX protected project, the impact to developers & lenders is minimised as:
PREVENTION FROM DAY 1:
PROTECT AGAINST FUTURE BUILDERS’ CASHFLOW ISSUES
MID-PROJECT IMPLEMENTATION:
GUIDE ‘TROUBLED’ PROJECTS TO COMPLETION SAFELY
* Standard developer portal view shows payment as % of contract value. Open book developer portal view shows subcontract/payment values.