Understanding the Risks of Kickbacks in Project Building
Kickbacks in project building are a contentious issue. They’re hard to prove, yet I’m certain they still exist within the industry. I spent months in the past interviewing subcontractors and supervisors due to anomalies in the allocation of work. Some trades received jobs consistently, while others had none. When a trade is favoured by supervisors or salespeople, it may simply be because they’re the best fit for the job. However, there may also be other, less transparent reasons behind such recommendations—especially when they’re pushed insistently.
Kickbacks can often go unnoticed because they’re rarely discussed openly. Pay attention to unexplained preferences for certain trades or suppliers—it could be a sign of hidden incentives.
Why do I bring this up? Because I believe it’s not right. Tradespeople should earn work based on their skill, reliability, and efficiency. A successful tradesperson stands out for the quality of their work, punctuality, and ability to complete tasks within budget and deadlines. But when money exchanges hands, all sorts of problems arise. The most qualified trade may no longer be chosen for the job, ultimately compromising the quality for both the builder and the client.
A good tradesperson earns work based on skill and reliability, not financial incentives. Always ask why a particular trade is being recommended, especially if you feel pushed in a certain direction.
When kickbacks come into play, greed clouds judgement. Decisions driven by self-interest can erode trust among supervisors. Although other supervisors may not have concrete proof, they’ll likely notice irregularities in labour assignments, and this leads to tension and conflict. Such situations are nearly inevitable in these environments.
The Sales Trap: Package Deals and Kickbacks
Another area where kickbacks often arise is through sales. Be cautious of salespeople quick to promote “package deals” that bundle items like carpet, tiles, blinds, landscaping, and air conditioning. They may convince you that excluding these items from the building contract will save you money, but the subcontractors they use for these extras are often cut-rate and sometimes unlicensed.
Package deals may sound like a bargain, but they’re sometimes tied to sales commissions or kickbacks. Always ask if your salesperson receives additional incentives for their recommendations.
Why would a salesperson advise such a package deal? Often, they’re receiving a kickback from the trades or suppliers, padding their own earnings. When in doubt, ask the salesperson directly, “Are you getting a rebate for suggesting this?” Keep in mind that salespeople already earn a commission based on the contract’s total value, so the more you include in your package, the more they make. Why, then, would they suggest removing items from the contract? Because they can potentially earn even more through these unofficial channels.
If a supervisor or salesperson insists on a specific trade, ask, “Are there any rebates involved?” A transparent builder will welcome the question.
The Hidden Cost of Kickbacks
This practice leads to a slippery slope. For builders or supervisors, clients often request referrals for additional work, making it tempting to demand kickbacks from trades. While this could bring in extra income, it compromises the quality of work. Once kickbacks are introduced, the balance of power shifts. The tradesman paying the kickback gains undue influence over the builder or supervisor, potentially manipulating the project to suit their interests rather than the client’s.
Kickbacks shift priorities away from quality, putting clients at risk. Quality-driven trades and suppliers stand on reputation—not on rebates.
In cases where these arrangements come to light, it’s usually the receiver who faces consequences. Those paying the kickback can claim they were simply meeting demands or protecting their business interests. This creates an exploitative situation, harming the client who believes they’re receiving quality and honest recommendations.
The Takeaway: Stay Vigilant and Ask Questions
The moral here is simple: be cautious of package deals or suggestions that promise savings. If you hear phrases like, “You’ll save money,” “We always do this,” or “I only recommend them because we’ve worked together for years,” consider the possibility of hidden motivations. Kickbacks can significantly impact the quality of your new home, even if they’re rarely discussed.
Protect yourself by asking questions and digging deeper. Look for signs of hesitation or awkward responses. Quality and transparency are essential when building your home, and being vigilant can help ensure you receive both.
Transparency is key in construction. Ask questions, dig deeper, and trust your instincts—especially if responses feel rehearsed or hesitant.
Further Reading
Anthony Painter
Anthony Painter
Anthony Painter
Anthony Painter
Anthony Painter
Anthony Painter
Anthony Painter
