Contract with Amish builders?
weedyacres
8 years ago
last modified: 8 years ago
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8 years agoRelated Discussions
Has anyone broke their contract with their builder midstream
Comments (21)houses14 - Why did we hire him? Because the ONE thing he turned out to be very good at was talking a good game! He comes across as the nicest guy you would ever want to meet. I called all the references he gave us. Then I found out later that one of the three references was his GIRL FRIEND! Another admitted to me later that the only reason he agreed to give a reference was in order to get the builder to finally come fix punch list items that he'd been waiting over 2 years for! The 3rd was actually a satisfied customer...at the time he gave the reference. But by the time we started doing discovery in my law suit, that customer too was pissed off at builder because he had started having some problems with his house due to some of the shoddy building practices builder had employed. We also talked to a couple of builder's subs before hiring him. Later on we found out that builder had owed them large sums of money and had flat out told them that the only way he'd be able to pay them was if he managed to land another job... so it was in their financial interests to tell me they'd never had any issues with him! When we started having issues ( the second week of the build!), according to builder, the problems were always due to a "misunderstanding" because I had somehow not made myself clear. Builder always promised that HE would make everything right b/c he just wanted me to be happy. Despite problem after problem after problem - none of which ever seemed to actually get resolved to my satisfaction - I continued to believe for quite a while that he wanted to build me the home of my dreams and would eventually do so. It was only after he very clearly lied to me on two separate occasions where there was absolutely no possibility of a misunderstanding that I started insisting that every single communication between us be in writing. Even when we met and talked about something, I started carrying my computer with me and IMMEDIATELY sitting down and writing up exactly what we had agreed to, emailing him a copy to his smart phone and demanding that he read it and sign it if he agreed with it OR that he respond with a revision stating his own understanding before we went any further. That's when it became more and more difficult for him to get me to agree to sign off on additional draws when the work that he claimed was completed really was NOT. Once I was dried up the spigot of easy money, we started getting liens filed against our house by subs and material men. Then builder started claiming that he had more money tied up in our house than we had paid to him - although he could not seem to tell me exactly how much. I told him that if he could show me with DOCUMENTS (receipts and canceled checks) where he had paid out more than he had been given, I would reimburse him every penny of the overage. When he started sending me documents to back up his claim, I called the materialmen and subs and went thru every receipt with a fine tooth comb. Turned out he was sending me bogus documents... eg., receipts for materials that were never put into our house; lien releases from subs who told me that either the signature on the lien release was NOT theirs or that they had signed the release in exchange for a payment check that then bounced so that the release was not valid, and so forth! Builder was only able to reasonably document an amount equal to about 60% of what we'd paid to him in draws...which means that he apparently pocketed close to 40% of the $290K we paid to him. That's over $100K in "profits" taken out UP FRONT on a $540K build that was less than half complete at the time we fired him. Yet he claimed we OWED him money! In answer to your next question about why the builder is not in jail, I talked to the local district attorney about a criminal prosecution for fraud. The DA told me that he had TRIED to bring a criminal case against my builder previously due to the claims of another previous client of his and had failed. According to the DA, builder and his attorney convinced the grand jury that the only thing going on was a contract dispute so it belonged in civil court not criminal court. You should now that Builder is a local boy, son of one of the wealthiest citizens in the area, a deacon in the local church, and - as I said earlier - a very smooth talker. Like us, his previous client who sought to have him prosecuted was a newcomer to the area. Having failed once, the DA was not willing to attempt to prosecute him again. Thus my only option was to go thru the civil court system. And before I could complete that process, builder passed all his assets to his father who put everything into a spendthrift trust leaving builder "judgment proof". Then builder declared bankruptcy....See MoreWhat verbage is in your contract about builder delays?
Comments (31)palimpsest's experience has alway been true to a certain degree for single-family homes but is unfortunately becoming more of a problem. Details are overlooked or ignored and so is the building code since it is rarely well enforced by the local building department. Contract provisions like "liquidated damages" (for late project delivery) have always been difficult to enforce but can be used effectively on larger commercial or multi-family projects but would be virtually useless on a residential project. I would not consider using one in a residential contract but a bonus for timely completion usually works well. When thinking about punishing a contractor for slow performance consider that holding anyone responsible for events beyond their control or for losses you cannot substantiate is not something on which you want to base a claim especially in court regardless of the contract wording. There are 2 ways to assess damages for late project delivery: actual damages and liquidated damages. If the actual loss to the owner at the end of the project can be determined that should be the method used. If the damages will not be easily determined at the completion they should be "liquidated", i.e. set forth in the original contract. But be careful. If the liquidated damages provision bears no resemblance to the actual delay damages which the parties would have anticipated at contract signing, the fine will be considered a "penalty" and will therefore not be enforceable in most states. In other words, you cannot penalize your contractor for slow work; you can only demand reasonable compensation for the loss the delay caused you. Many states require proof of actual damages at the end of the project instead of allowing the contract liquidated damage amounts to be enforced. Basically, the idea that a contractor can be made to work faster to avoid fines is specious at best. This post was edited by Renovator8 on Tue, Jul 22, 14 at 10:08...See MoreBuilder trying to increase price after signing contract.
Comments (11)Here’s the catch. Materials costs have risen dramatically and increases are still happening. Even if the contract doesn’t have an escalations clause (it likely does), and the builder is compelled to construct the house at the original price, it is the customer that will end up paying in the end. An experienced builder knows the cost levers better than you do and the loss of margin from higher materials costs will be mostly made up for by reducing other costs like labor and materials quality. Unfortunately it’s becoming expensive to build now and it’s hard to keep quality at a high level without changing specs or compromising somewhere else....See MoreBuilder cancel contract
Comments (26)Something seems off here. My contact has very few scenarios where I get my earnest money back for not going through with the sale, and all have to do with a major ball dropping by the builder (tract, but small and local, not national). I have to pay any difference in appraisal which is why I kept my upgrades to a minimum just to be safe. I’m getting a conventional loan. I’d scour that contract and call the lender as well. Is it one of Lennar’s preferred?...See Moreweedyacres
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