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Can general contractor raise price after house is finished? HappyHumanist 06-23-2007
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Posted by Tony on June 24, 2007, 4:23 pm


> Your argument assumes that "fair market value for services" equals "fair
> market value of finished product", it does not.
>

the builder would get the standard rate for his service
that's all I mean jughead



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Posted by ++ on June 24, 2007, 6:12 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.
>
>2. Regarding his claim that we bothered him with changes and
>supervision... He never once discouraged this or said that there
>would be extra charges, other than the cost of the actual changes,
>which we are agreeing to pay--$7,000 for specific changes bringing the
>total due up to $60,000. But he wants $73,000! As for his claim that
>we bothered him with a lot of supervision and faxed notes... He never
>discouraged this, and the only reason for the close supervision and
>notes was because his crew made a *LOT* of mistakes that had to be
>corrected. The work was very substandard. All of this is
>documented. I think our supervision and notes actually helped them
>get through the job and finish it the way we intended it to be
>finished. They were very unprofessional.
>
>3. Regarding his claim that our house is worth a lot so we should pay
>a lot... Why should we be penalized because we came up with a great
>design and made wise choices for materials and features? He offered
>us a bid in the beginning, and we accepted. Now, because the house is
>very attractive (mostly because of the land and neighborhood), why
>should he be entitled to more money? His complaint is that he didn't
>charge enough initially, and now he's going to lose at least $30,0000,
>and that we should have to pay for his losses because our house only
>cost us $290,000 and it's worth about $450,000. First of all, I think
>it's worth $350,000 at the most, and even if it was worth $450,000,
>that would be like a mechanic complaining because he sold us an engine
>for $5,000 and we put it in a car we bought for $7,000, and now that
>car is now worth $20,000--too bad, right?
>
>4. Regarding his claim that the house took longer to build than
>expected... Isn't that his fault? The reason it took longer is
>because his crew are slow, lazy, and inept. They made a lot of
>mistakes that they had to fix. Likewise, everything based on time
>cost about double--the dumpster, the crane, etc. In fact, this
>actually cost us money, because we paid four months longer than
>expected on our construction loan without being able to live in the
>house--shouldn't we be entitled for some compensation for that?
>
>This is all causing us a lot of stress, and it sounds like it's going
>to cost us a lot of legal fees now, too. I feel violated. What can
>we do? Please advise. Any helpful information would be greatly
>appreciated.
>
>Thanks,
>Unhappy
>
>
>
>
Since you don't have formal contract....I suggest you submit this to
arbitration. What the house is worth is irrelevant. What the labor is
worth may be relevant....What the materials cost you have a backup
statement for....You have no agreement for change orders? His mistakes,
his time to complete? Without a contract, not clear he can complain
unless he can show you caused the delay. Sometimes it comes down to do
you want to let him control the process of redress, or you? Do yo want
him filing a mechanics lein and then a laywer jacks up the hourly fees
or do you want to perhaps go to a low or no cost initial session with a
lawyer to determine you best interest? Sometimes, a simple letter from
a lawyer will survice.

Consider, what do you think he OUGHT to get paid, fairly?


Posted by mrsgator88 on June 24, 2007, 11:26 pm
> 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.
>
> 2. Regarding his claim that we bothered him with changes and
> supervision... He never once discouraged this or said that there
> would be extra charges, other than the cost of the actual changes,
> which we are agreeing to pay--$7,000 for specific changes bringing the
> total due up to $60,000. But he wants $73,000! As for his claim that
> we bothered him with a lot of supervision and faxed notes... He never
> discouraged this, and the only reason for the close supervision and
> notes was because his crew made a *LOT* of mistakes that had to be
> corrected. The work was very substandard. All of this is
> documented. I think our supervision and notes actually helped them
> get through the job and finish it the way we intended it to be
> finished. They were very unprofessional.
>
> 3. Regarding his claim that our house is worth a lot so we should pay
> a lot... Why should we be penalized because we came up with a great
> design and made wise choices for materials and features? He offered
> us a bid in the beginning, and we accepted. Now, because the house is
> very attractive (mostly because of the land and neighborhood), why
> should he be entitled to more money? His complaint is that he didn't
> charge enough initially, and now he's going to lose at least $30,0000,
> and that we should have to pay for his losses because our house only
> cost us $290,000 and it's worth about $450,000. First of all, I think
> it's worth $350,000 at the most, and even if it was worth $450,000,
> that would be like a mechanic complaining because he sold us an engine
> for $5,000 and we put it in a car we bought for $7,000, and now that
> car is now worth $20,000--too bad, right?
>
> 4. Regarding his claim that the house took longer to build than
> expected... Isn't that his fault? The reason it took longer is
> because his crew are slow, lazy, and inept. They made a lot of
> mistakes that they had to fix. Likewise, everything based on time
> cost about double--the dumpster, the crane, etc. In fact, this
> actually cost us money, because we paid four months longer than
> expected on our construction loan without being able to live in the
> house--shouldn't we be entitled for some compensation for that?
>
> This is all causing us a lot of stress, and it sounds like it's going
> to cost us a lot of legal fees now, too. I feel violated. What can
> we do? Please advise. Any helpful information would be greatly
> appreciated.
>
> Thanks,
> Unhappy
>

Is he from Waukegan?



Posted by mrsgator88 on June 24, 2007, 11:38 pm
> 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:

Anybody can sue anyone for anything. Doesn't mean its really going to
happen.

> 1. His estimates were inaccurate, and some of his sources for
> material and labor ended up charging him more than he expected.

Unless there's a provision in the contract, tough luck for him and he'll be
laughed out of court.

> 2. We bothered him with a lot of changes and supervision.

See previous point.

> 3. Our house is worth a lot more than we're paying him.

This has no standing in court.

> 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.

Most contracts have a time frame specified, so this could work against him
in court. BTW, his written bid with your signature of acceptance is in fact
a contract. Has he even presented you with a final itemized bill? Now, I'm
interested to hear the other side of the story. But if the builder is just
trying to bully his way to more money than he's due, his threats will go
nowhere.



Posted by Dennis on June 25, 2007, 5:18 pm
In many states a contractor can add additional charges on to his bill if he
feels that he can justify the additional costs he's been force to endure. I
have no idea what the law states in Wisconsin, and I'm willing to bet you
don't either. First of all he CAN place a builders lien on you property and
make it difficult for you to get a Certificate of Occupancy.

In my opinion, you have two courses of action, one is to agree to his
overages and pay. The second is to retain a lawyer for a consultation.

ONLY a lawyer can advise you as whether he has a legitimate claim or not (he
probably can justify some of the additional cost, but only a lawyer can get
to the heart of his claim.) Don't be foolish, no one here is qualified to
give you a good answer.

He's threatening lawsuit, and you would be very foolish to take this
lightly. He's a professional (whether he's a good contractor in our opinion,
or not), and he well knows the construction laws and his right to claim to
any additional monies due him. Get a lawyer, you will save money in the long
run.



> 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.
>
> 2. Regarding his claim that we bothered him with changes and
> supervision... He never once discouraged this or said that there
> would be extra charges, other than the cost of the actual changes,
> which we are agreeing to pay--$7,000 for specific changes bringing the
> total due up to $60,000. But he wants $73,000! As for his claim that
> we bothered him with a lot of supervision and faxed notes... He never
> discouraged this, and the only reason for the close supervision and
> notes was because his crew made a *LOT* of mistakes that had to be
> corrected. The work was very substandard. All of this is
> documented. I think our supervision and notes actually helped them
> get through the job and finish it the way we intended it to be
> finished. They were very unprofessional.
>
> 3. Regarding his claim that our house is worth a lot so we should pay
> a lot... Why should we be penalized because we came up with a great
> design and made wise choices for materials and features? He offered
> us a bid in the beginning, and we accepted. Now, because the house is
> very attractive (mostly because of the land and neighborhood), why
> should he be entitled to more money? His complaint is that he didn't
> charge enough initially, and now he's going to lose at least $30,0000,
> and that we should have to pay for his losses because our house only
> cost us $290,000 and it's worth about $450,000. First of all, I think
> it's worth $350,000 at the most, and even if it was worth $450,000,
> that would be like a mechanic complaining because he sold us an engine
> for $5,000 and we put it in a car we bought for $7,000, and now that
> car is now worth $20,000--too bad, right?
>
> 4. Regarding his claim that the house took longer to build than
> expected... Isn't that his fault? The reason it took longer is
> because his crew are slow, lazy, and inept. They made a lot of
> mistakes that they had to fix. Likewise, everything based on time
> cost about double--the dumpster, the crane, etc. In fact, this
> actually cost us money, because we paid four months longer than
> expected on our construction loan without being able to live in the
> house--shouldn't we be entitled for some compensation for that?
>
> This is all causing us a lot of stress, and it sounds like it's going
> to cost us a lot of legal fees now, too. I feel violated. What can
> we do? Please advise. Any helpful information would be greatly
> appreciated.
>
> Thanks,
> Unhappy
>
>



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