A well-known building contractor has launched legal proceedings against Liverpool Council following a dispute over a new homes scheme.
Flanagan Building and Maintenance Services Ltd were the lead contractor on the refurbishment of 25 terraced homes on Tunstall Street in south Liverpool. Earlier this year a cabinet report stated that Liverpool council spent around £5,084,000 on the project. The local authority now faces a financial loss after agreeing to sell the site to Pine Court homes for around £3.2m.
An audit committee report recently revealed that the council had decided not to pay money to the contractors following a number of defects on the scheme.
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It reads: "Although the houses have been handed over following practical completion, as is commonplace with most refurbishment/new build schemes, a number of defects and outstanding work have been identified during the defects liability period. As the defects and outstanding work have not been remedied by the contractor the Council has not released the retention monies it is holding and the contractor has instigated proceedings against the Council as a result."
A cabinet report from August this year stated that Flanagan Building and Maintenance Services Ltd were the contractors on the site.
It read: "A dispute has also arisen with the contractor (Flanagan Building and Maintenance Services Ltd.) over the timeframe for the defects, when they should have been remedied by the contractor and the release of the remaining amount of the retention monies.
"Following a detailed inspection of the houses, defects totalling c. £30,000 have been identified by the Council. The contractor has been advised of the works together with the costs and asked to remedy the defects. Should they refuse to undertake the works under the contract the Council has the right to appoint a third party to carry out them out.
"The council may therefore need to fund this cost and subsequently seek to recover it from the contractor. The cost can be met from the remaining budget for the project."
The Flanagan Group, based on Sefton Street in Liverpool 8, have enjoyed a close working relationship with the council in the past.
A cabinet meeting in September approved the sale of properties to Pine Court for £3.2m, with three houses to be leased back for use by children’s social care. The Tunstall Street scheme will be discussed next week at a meeting of the city's audit committee.
The ECHO approached the Flanagan Group for comment on this story. The council said it could not comment on a legal action.
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