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Posted by Pat on June 23, 2007, 5:55 pm
On Jun 23, 4:14 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
There's not way to answer your questions without seeing your
contracts, and no, I don't want to read them. Take them to your
attorney and have your attorney fire off a letter to him and/or his
attorney. Maybe even send the check along at the same time as
"payment in full".
If you contract was fixed price, then it may or may not be fixed
price. If it was "time and materials", then you pay him his time and
materials.
Just out of curiosity, does he have a performance bond on the project?
Good luck with it, but you need an attorney.
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