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Posted by dpb on June 23, 2007, 5:12 pm
HappyHumanist@yahoo.com wrote:
> Our house (in Wisconsin) is finished. According to the bid we
> accepted, we owe one final payment of $60,000 ($53,000 plus $7,000 to
> account for change requests during the construction process) to our
> general contractor. Now, right at the end, he suddenly says we owe
> him $73,000. He says if we don't pay it, he's going to sue us. Can
> he doe this to us? Here are his reasons:
>
> 1. His estimates were inaccurate, and some of his sources for
> material and labor ended up charging him more than he expected.
>
> 2. We bothered him with a lot of changes and supervision.
>
> 3. Our house is worth a lot more than we're paying him.
>
> 4. The house too him longer to build than he expected, and so he had
> to pay a lot more for labor than he expected.
>
> Here are my answers to him on each of the four issues:
>
> 1. Regarding his costs exceeding his estimates... We had an oral
> agreement in the beginning that once we agreed on a project and
> accepted his bid that the bid would not change--up or down. If we
> made changes (we did make minor changes), we would be responsible for
> our changes. If market prices on materials were to fall, we agreed
> that he would enjoy the savings, but if prices went up, he would
> suffer the extra charges. He called this "locking in," and that is
> one of the main reasons we went with this contractor. On the detailed
> written bid he provided us, and which we subsequently accepted, he
> even wrote his "lock in" promise at the bottom--a few sentences.
> Other than these written documents and or oral contract, we have no
> official contract with him.
...[snip other points I think mostly immaterial]...
The contract is the contract. What it says is what it says. The
obligations of each are spelled out in it and in approved change orders
to it.
Of course he can sue (or more likely, try to place a mechanics' lien on
the house would be what I would guess he would actually try to do).
From the story as told, probably wouldn't win, at least much. But, of
course, there are almost always two sides to any story and we don't have
his. :)
What you should do is take the concern to your attorney (you _DO_ have
an attorney, don't you?) and let him handle it. Don't discuss dollars
or payments further w/ the contractor if they get beyond the contractual
limits set but refer him to the attorney. Don't commit to anything,
don't do anything...
As a practical matter, however, how much _did_ materials escalate? Was
there weather or other mitigating factors that caused at least some of
the delays? And especially, are you being _fully_ upfront w/ him on the
change orders and other requests, etc. and are there other features than
those on the official change orders that ended up in the house that
really, really aren't what the original plans called for? You might
consider what would be a fair compromise as a fallback position rather
than getting into a real battle here...there just might be at least some
basis for his claim although I'll agree that to wait until the end
before raising concerns isn't the way to deal with it--he should have
asked for change orders or raised concerns along the way.
--
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