Your contractor is bankrupt: steps before transferring the building work

1. Check which party was declared bankrupt

Compare the name and business number on your agreement with the available bankruptcy details. A trading name may resemble that of another company in the same group. Record which entity entered into your contract and whom you paid. Rechtspraak describes the Centraal Insolventieregister as the official source of published insolvency information. Use the available registration to check both the report and the entity involved.

Keep the information about the court order, the person handling the case and their contact details. If people mention only a suspension of payments or a business restart, first ask which situation actually exists. A new name on an email or building van does not automatically prove that someone has taken over your original agreement. Tell your adviser about uncertainties before making commitments to another party.

2. Record progress and necessary safety

Make a record of what is complete, what is missing and where there is an immediate risk. Examples include an open roof, loose materials or an installation that cannot be used. Obtain appropriate technical help in an acutely unsafe situation. Record, with dates, which emergency measure was necessary and the condition beforehand. This will help distinguish measures to limit damage from completing the whole project.

Keep drawings, photographs taken during construction and access information carefully. Also record which materials are on site and which contractor or supplier claims rights over them. Do not assume ownership simply because you paid an amount for materials. If ownership is disputed, ask how to preserve the situation for assessment without giving away or removing components.

3. Ask the trustee about the agreement

Contact the trustee using verified details and provide your agreement, the state of the work and payments made. Ask what information is needed to clarify further performance. Rechtspraak explains that the trustee identifies the assets and claims in the bankruptcy. This does not mean the trustee becomes your personal legal adviser or will necessarily complete the building work.

If matters remain unclear, have someone assess which formal request or time limit is appropriate. An unfinished project, outstanding payment and possible termination must be considered together. Also give your lawyer any messages about another business continuing the work. Assuming that bankruptcy has made every contractual issue disappear can leave unclear or duplicate obligations.

Where both parties have not performed, or have only partly performed, a reciprocal agreement at the time of bankruptcy, Article 37 of the Dutch Bankruptcy Act provides a specific route. The counterparty can give the trustee a reasonable period in writing to declare willingness to honour the agreement. Have the request and period tailored to the state of the work and your agreements. A general notification of loss, or merely asking who handles the file, is not automatically the same targeted request. Keep the letter and demonstrable evidence of receipt.

If the trustee declares willingness to perform, security must be provided when making that declaration. If willingness is not declared in time, Article 37 removes the trustee’s right to demand performance from the other side. This does not automatically terminate the agreement, refund every payment or remove every possible claim of the estate. The provision also contains an exception for acts that must be performed exclusively in person. Have the next step and existing payment arrangements assessed separately before a new contractor begins.

4. Notify your guarantee before final completion

Find your project-specific guarantee certificate and the applicable terms. For its completion guarantee following bankruptcy, Woningborg mentions, among other requirements, a valid certificate and an agreement that has not yet been fully performed. Check directly with your own provider whether your situation may fall within the scheme. A general assurance that the contractor was affiliated does not replace that investigation.

Ask which notification, documents and permission are needed for emergency measures and completion. Keep both the trustee route and the guarantee route visible in your file. An agreement with a new contractor can affect the assessment of the existing contract or security. Establish who may take each step and which commitment has actually been confirmed.

5. Examine post-bankruptcy payment demands

Compare a demand for an outstanding instalment with the contractual basis and the state of the work. Ask which item is being requested and why the sender considers it due. Keep earlier payment arrangements and set-off proposals. Have it determined whether the demand concerns contractual performance, another legal basis or a practical completion proposal. Who is requesting payment and on what basis matters.

In 2020, the Hoge Raad considered a construction bankruptcy involving remaining additional-work charges and different bases for payment. That case shows why you cannot reason solely that unfinished work can never lead to a further claim. It does not establish a general duty to pay in your situation. Have the contract, performance supplied and any counterclaim assessed specifically before paying or refusing categorically.

6. Organise your claim and further costs

Prepare an overview of advances paid, work still to be delivered and any loss. Break down the amounts rather than merely asking for the entire contract price back. Add payment evidence and a clear explanation. Ask how to lodge your claim with the trustee and whether a guarantee or insurance deals with a different component. Registering a claim does not guarantee payment in full.

For a completion proposal, identify which tasks the new amount covers and which existing payments will still be credited. Ask what happens to existing technical defects as well. The cheapest quotation may be incomplete if it only mentions visible completion work. Discuss an appropriate inspection and specification before treating a new price as a complete solution.

7. Fictional example: unfinished extension and large advance

Suppose a consumer has already paid a large part of the price. The contractor is declared bankrupt while the extension is not yet weather-tight. Another builder offers to start the following week but immediately requests a new advance. The guarantee certificate has not yet been found. This example is invented and gives no outcome for an actual claim.

Preparation consists of checking the contracting entity, recording the urgent condition of the work and contacting the trustee and possible guarantee provider. The completion proposal is then compared with existing arrangements. This allows the payment and instruction to be assessed responsibly. Speed alone, or an oral statement that everything is arranged, does not answer the contractual and guarantee questions.

8. Checklist for urgent help

Immediately explain whether the home is safe and which payment or completion decision is being requested. Give your lawyer the available bankruptcy details and your agreement. Ask for a defined initial assessment of trustee contact, the guarantee and your payment position. Agree which technical inspection is needed and who will inform the different parties involved.

• The exact contracting entity, bankruptcy details and contact for the person handling the case.
• The agreement, amendments and a complete overview of payments.
• Photographs and a list of missing work, loss and immediate risks.
• The guarantee certificate, terms and notifications already sent.
• Outstanding invoices, trustee letters and proposals from a new contractor.