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Can general contractor raise price after house is finished? HappyHumanist 06-23-2007
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Posted by RicodJour on June 26, 2007, 11:17 am
wrote:
>
>
>
> >> Some years ago the contractor who remodeled my Boston row house into 3
> >> condos, demanded $26,000 extra from me for additional work prior to C of
> >> O.
> >> I suggested we go to arbitration, he agreed. I appeared with complete
> >> paperwork, dated notes of conversations with him, copies of letters
> >> detailing his delays, dated sketches, and photos detailing every item
> >> added
> >> or subtracted. He appeared with his contract and threats of a mechanics
> >> lien. I won easily as I was prepared. He was not and went away nifonged.
> >> I
> >> suggest that you go for arbitration and be over prepared.
>
> > I would hazard a guess that not having a written contract would put a
> > rather large hole in the over-prepared preparations.
>
> I would hazard a guess that not having a (well) written contract would set
> up the situation in the first place (ie, encourage one party or the other to
> overstep nominal ethics).

It doesn't have to be an intentional thing. If there is any wiggle
room, there will always be one that wants to pay less having a
different opinion than the guy that wants to earn more.

Assumptions kill. There should be a Mothers Against Dumb Assumptions
ad campaign.

R


Posted by Matt Barrow on June 26, 2007, 1:01 pm
> wrote:
>
>> > I would hazard a guess that not having a written contract would put a
>> > rather large hole in the over-prepared preparations.
>>
>> I would hazard a guess that not having a (well) written contract would
>> set
>> up the situation in the first place (ie, encourage one party or the other
>> to
>> overstep nominal ethics).
>
> It doesn't have to be an intentional thing. If there is any wiggle
> room, there will always be one that wants to pay less having a
> different opinion than the guy that wants to earn more.

Yes, and that's why I said "encourage", though it's a shoo-in for the many
with less than optimal ethical persuasions.

> Assumptions kill. There should be a Mothers Against Dumb Assumptions
> ad campaign.

Like DAM?, Mothers Against Dyslexia?





Posted by longshot on June 26, 2007, 12:45 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


cut him the check for the $60,000 and explain to him that you don't feel you
owe him the other 13k. see if he'd be willing to go away for 5k if he
refuses then let him take you to court.



Posted by Gary KW4Z on June 26, 2007, 1:34 pm
On 6/23/07 4:14 PM, in article
1182629655.080023.47330@u2g2000hsc.googlegroups.com,

> 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
>


I agree with most you do need to let your lawyer handle your communication
with this character. It's not your fault that HE underestimated and the
contract is the contract and unless it's open ended and he left himself a
way to increase his bid then he's stuck by it. If though he continues to
threaten to sue you then just threaten to COUNTERSUE afterwards for your
complete legal cost to fight that suit as well as possible punitive damages
for stress and duress caused to you. You have already agreed to an extra
amount due to changes you added but not to his carelessness in
underestimating. He is the expert at building (assumed) not you and
therefore it's up to him to know how to bid the job. Once bid, unless he
added a provision for price changes in materials and additional time and
labor caused by your changes then it is him that should incur the extra
cost.

It would also be reasonable to expect him to provide you with accounting of
his materials cost from all sources and compare to his initial bid. He can
file a lien against the house but I doubt it would hold given you have the
written contract. Be sure that all communication with him is via certified
letter, return receipt requested. Be sure that on your check/payment you
document and state full and final payment ACCORDING TO AGREEMENT or CONTRACT
for Home at (address). If he cashes the check he's essentially agreed to
the statement on the check. If he doesn't cash the check, threatens to sue
then pay your check to an account you set up specifically for the charges to
the house but do not give him the money. If he sues you he will have to
absorb all cost out of his pocket until it's all settled in court.


Posted by on June 27, 2007, 7:11 pm
Dear Happy Human,

I have not read all the responses here as there are so many, so my
comments may be redundant.

I'm also suprised there is no written contract!!!

He can probably put a lien on your house:
http://www.traditionsoftware.com/constlienbystate.php
Be sure to verify on your own state website that the laws they cite
here are up to date.

Yes he can sue you. With an oral contract his proof of what was
agreed upon is no better or worse than YOURS.

A fair judge who saw thru this common BS ploy to get more money at the
end after deliberately or stupidly underbidding a job would tell the
builder he was out of luck. But you may not get a fair judge, and you
may get a judge that thinks anyone who doesn't get a written contract
on a HOUSE deserves to be taught a lesson. The judge might think it's
you who needs the lesson. Or the judge might split the difference.
Who knows. I think you'll have a hard time finding a lawyer for such
a relatively small amount of money (in lawyers' eyes). But builders
know these games and play them well. Good luck and next time do not
hire any contractors without a good contract and a lawyer on your
side.


On Jun 23, 3:14 pm, HappyHuman...@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



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