Needles in my eyes

August 16, 2007 5:20 PM

The end is near. Now, how do we expedite it? I'm talking about a house renovation, and a contractor who is trying to shake more money out of our pockets at the 11th hour. What would you pay for, knowing that this guy can make our lives a living hell with a mechanical lien or litigation. More inside ...

My wife and I are close to completing a massive renovation on our dream house. We were displaced from the house for more than five months (the contractor "verbally" said it would not exceed two months) and have dealt with all of the frustrations of missed deadlines, unfulfilled promises, and the normal ups and downs of a project of this scope. (I told my wife I would rather have needles poked in my eye than endure another one of these projects.)

Generally, we are pleased -- the guy is a premier builder and has done a good job. But as we attempt to close out and get a C-of-O (certificate of occupancy), the builder is now hitting us with charges that we never agreed to -- labor and materials that we always assumed would be part of the overall contract. There are various non-detailed "allowances" for building materials, electrical, etc.

These "extras" were either never presented as our responsibility to pay for or the contractor told us verbally he would cover. So we have been hit with charges for work and materials, post-install, when the contract states that all such "change orders"must be presented in writing and signed off on prior to any work being done. The spirit of this is to give us an opportunity to shop around the prices that are presented.

There are other issues, as you might relate to, associated with on-the-spot decisions made by the builder to deviate from the architect's plan, but these were never presented in the way the contract specified, namely in writing. So we have issues there as well. I have already consulted a lawyer and his advice was to sit down and attempt to negotiate with the builder -- even though he did not follow the specifications of the contract in billing, without approval, after the work was completed.

I know this is a long description (sorry about that) and probably hard to follow, but my questions are the following:

-- would you pursue on the specifications of the contract -- i.e. changes must be presented and approved beforehand -- or attempt to negotiate with the builder since the work is already completed and presumably they have a right to be paid?

-- what is your experience, if any, with the way these things turn out? ... should I be concerned about a lien against my property, is it better to wait it out or attempt to resolve now?

We are not trying to screw the builder (it's not in our DNA to do that to anyone) but we do feel that based on his actions he is trying to suck more money out of us before we complete our dealings with him.

posted by terrier319 to home & garden (7 comments total)

What percentage over the contact are we talking about?
posted by Dick Paris at 5:28 PM on August 16, 2007

Dick -- it is about eight percent over the the K. Thanks.
posted by terrier319 at 5:33 PM on August 16, 2007

it sounds fishy to me. reputable builders usually can document material costs. what are non-detailed "allowances" for building materials? didnt he get a reciept when he bought the materials? material costs are often vary from the initial contract, since on a large project, it can be very difficult to estimate. but any premier builder should know that when costs go above the contract, you need to document those costs. sounds fishy.

that said, i think your lawyer might be right, the least painful and costly way of settling this dispute is to negotiate with the builder. prepare yourself for this negotiation, be able to list your points from memory. negotiation is probably your best bet.

and, after the negotiation, if you are still not satisfied, and prepared to carried on the fight (which has its own cost/benefit analysis), then go back to your lawyer, and take it to the next level.
posted by Flood at 5:58 PM on August 16, 2007

The purpose of a lien is to make sure the contractor gets paid for labor and materials. They can't very well go into your house and take back their work when you don't pay. Even if they did, they probably couldn't use the materials again in another job.

But, in order to file a lien, he needs to show that the labor and materials he wants you to pay for were part of the contract. This means that any additions to the original contract were added according to the terms of the contract. If the contract says change orders are to be submitted in writing, then they have to be in writing. If it says these changes need to be approved before work is completed, then that's what has to happen.

I work for a company that does sub-contracting work. We recently had to file a lien against a restaurant that didn't pay according to the contract. We had to show that they agreed to pay $X for our work. Unfortunately, they filed bankruptcy shortly after we filed our lien, so whether we get paid remains to be seen.

A lien on a private residence may not be that much of a problem unless you're planning on refinancing or selling your home soon. I have a friend that used to lay tile in residences. He filed a lien on his own, but nothing came of it for years - until the owner of the home refinanced his mortgage.

Negotiate the best you can, but don't be scared. Unless he did the work according to the contract you shouldn't be worried about a lien. It's good that you've contacted your lawyer. If the negotiations don't work out and the contractor files the lien, go back to him to help you fight it.
posted by youngergirl44 at 6:28 PM on August 16, 2007

While you are at it, ask him if he expects you to give him referral business.
posted by konolia at 7:57 PM on August 16, 2007

This will happen with contractors when they've done a poor job with their bid and have gone over costs. However, if it's not in your contract, you don't have to pay for it. A well written, specific contract and proper use of change order actually protect the contractor even more than the customer. I've known contractors who have been in this position and have clearly explained the issues to the client, and gotten at least some of their reasonable costs covered (due to the general good nature of these clients). He absolutely needs to show you documentation for these cost overruns, however. Your state contractor's licensing board should be available to help mediate disputes if negotiating does not solve anything. From what you've described, he's in a bad position. I'd gently let him know that you have been in contact with your state licensing board, so he understands you know what he can or can't get away with. It's reasonable for him to ask for more money for increased and unforseen costs, but it should have been done properly with change orders.
posted by oneirodynia at 9:49 PM on August 16, 2007

A similar thing happened to me with a contractor. My contractor was doing a rehab for me, and at the last minute tried to weasel out of doing a few minor things that were to be included in the agreed-upon price. They were such silly, small things too, but the trouble to me of finding another contractor to go to the remote location of the property and all would have been great. First, I tried to negotiate with him. He was not reasonable (he was a little punch-drunk, but you'd be okay with that too if you saw his drywall).

I wrote him a stern letter and made the implication that I would go after his contractor's license (i.e., make a complaint to the issuing agency) and he promptly finished the work (despite months of former delays). This is kinda hardball, to go this route, but it worked.
posted by letahl at 6:35 AM on August 17, 2007