no suggestions just want to say I am very sorry for your situation. I have a Friend in a nightmarish remodel like yours. You are not the only one. I don’t know how some people sleep at night.

Argh... what a horrible experience! That all sounds so infuriating not to mention sad because something that should have been so exciting is now tainted :-( So sorry you & your family are having to go through this...

I'm really sorry to hear about this mess. It really stinks. About all I can suggest is that you have a talk with a lawyer to find out what legal course might still be open to you, if any. And you've probably already heard that a thousand times.

In your place, I might consider getting the house to where it looks decent, and then putting it up for sale. Get out, buy what you can afford with what resources you have left, even if it's far from ideal. Nurse your wounds, awaken from this nightmare, rebuild your finances.

This is one reason (there are others) that I personally don't do major home renovation. I buy a house that suits my needs, maintain it reasonably well, and enjoy living in it If and when it no longer suits my needs, I find one that does and I move.

I realize that that's not a recipe for everyone, but much of what I see done to houses represents changes that the owners never even thought about or missed until they saw them elsewhere, elevated by advertising to the status of needs.

The whole "home improvement" industry is a complex structure designed solely and effectively to move money from homeowners' pockets into those of mostly-already-wealthy contractors, suppliers, advertisers, and television and web producers. I refuse to take part in that, which is part of the reason I was able to retire a few years early.

My best wishes for a resolution. Please keep us updated as you work through this putrid mess.

I am so sorry about your stress!! I also had a horrible issue with an actual licensed contractor that I checked references on. So even a licensed contractor can "go bad" on your job. My 4 month job took over a year...............we had to fire him and get someone else to finish. Super stressful. Lessons learned............ I wish you the best in getting this resolved so you can get on with your life and live in your house when it is done. I did my due diligence and there were no warning signs there would be a problem in my case. You have been beyond patient and nice per your descriptions.

Friends of ours in Texas had essentially the same experience you did. They lost $50K and had to start over with more money to get the house livable. Not sure what your losses are at this point, but it sounds like more than that. After going through all the options with them, selling their home and buying something else was definitely a possibility, and it would have been a good approach. I've lived in Michigan for 2 years and must say it is one of the prettiest states in the USA. If you're in a rural area, there might be some other great options for you for affordable housing on a gorgeous lot.

If you're determined to stay where you are for a variety of reasons, would there be a church or friend group that could all pitch in and come help do some team work days and speed you along? I know of a number of folks in Michigan who have done this very thing, friends helping friends, many with specific building skills. Let me know if you'd like some contacts in that regard, specifically on the western portion of lower MI.

Legal options are going to be costly and take a long time, if you can collect. Would there be someone to take this on pro bono for you? As a last resort, I've heard of people applying to be on TV shows for botched remodels. You might want to brainstorm other ideas in that regard. I'm so sorry for the massive and unexpected losses that are affecting your lives.

Take pictures of his kids at the bus stop and mail them to him.

I expect that if you're looking for a friendly visit from the FBI, that would be a fine way to arrange one.

Oh my, Joseph. I will say, I have been scared to leave OUR doors unlocked or Our kids home alone.

Dormelles, I'm in mid-Michigan and I have to say I have been very impressed with the people who are stepping in to help. You have some good suggestions. Thank you for your comments. So far we have submitted reports to the County Attorney; State Licensing Board through the Building Inspector (In Michigan practicing without a license is a felony with up to 4 years of jail time); and the BBB.

Lafdr, Thank you. I'm sure we haven't been perfect clients, but we have tried, been honest, and been willing to bend. We need to just get this behind us.

DavidR, it is a mess and just gets messier. We have always done our own work and did try the moving option after a year on the market we decided to do this renovation and build the space we wanted. I agree home improvement is a difficult area to navigate and I am sure we are not faultless. We have always paid our bills and been honest so this throws us for a big loop.

D Walker, thanks and I have been wanting to just move forward. We have been in a state of limbo for 6 moths watching things not move forward. I'm trying to just look to a date we can put this behind us.

roc couple, thank you, it helps to vent a bit.

"I expect that if you're looking for a friendly visit from the FBI, that would be a fine way to arrange one."

DavidR:

I stand corrected and thank you. You should't use the United States Postal Service. FedEx isn't a felony.

I had another idea. for the subs you might be able to arrange a payment plan. Even if you give them $50 a month and explain your situation if they see efforts they might not put a lien on your house Even if thats not possible stay in touch and attempt to pay what you can. It will help them

“We learned this week the contractor was not licensed, did not get permits we requested and paid for, had unlicensed workers doing our electrical and mechanical, and didn't pay his bills.”

I feel for what has happened to you. And it can serve as a tale of caution for others. In the spirit of that, how on earth did this information not come up sooner? What type of snow job occurred that you didn’t check the state database for contractors on the front end, yourself? Why didn’t your bank require a copy of his license and insurance? That seems to be a major oversight on their part to release draws to someone who wasn’t qualified to do the job. How didn’t you notice the lack of a permit taped to your window for 10 months? And no inspectors showing up?

Part of any process for finding a contractor requires verification of their qualifications. Copies of their license and insurance should be presented to you to verify before any contract is signed. Any contract for something as complex as this deserves the $700 consultation from a contract lawyer before being signed. The fact that there doesn’t appear to be any type of real contract document spelling out each parties requirements should be a huge red flag that shouldn’t allow anyone to give someone money.

All of that is easy to see after the fact. What made it difficult to see and act on in the beginning of the relationship? Because there will always be future folks starting off down this road. Help them. Why did you move forward with this guy, without doing that due diligence? And why did your bank allow it?

https://www.houzz.com/discussions/5332686/10-tests-for-you-and-your-contractor-s-first-meeting

This is a terrible thing this contractor did to you. Its time, for you to act quickly, and stop protecting him. Let him face the consquences. Bry911, gave you some very good advise. You may also want to contact an attorney on your own too.

Live_wire_oak these are excellent questions and I do think it is worth a cautionary tale and a learn from my mistakes.

FWIW, I did read the 10 tests and they passed with flying colors. We had a builder disappear on us just before we began working with them, so we would be more likely to be the problem people the 10 tests identifies. We still don't know what happened on that one (though, we have thought maybe it is us and we are just doing this wrong). If anything when we started talking with them we were very clear about what we wanted. I'll answer your specific questions:

The bank does a background check on the contractor. We engaged the bank early and had this lined up. They did a credit check and background check but he provided a builders license for the person doing the addition as the builder of record. He provided their license and license number which did check out. The builder whose license was used had no idea he was on the loan at the bank and when the contractor tried this for the permit on the addition, he wrote a letter to the Building Inspector to make sure his name was removed and he declined to work not he project.

I did not know about the tape/inspectors (I do now); we also had an addition and the addition was permitted through the builder, electrician and mechanical. So we saw stickers and had inspectors. We were billed for permits and were told it was permitted and saw inspectors but did not realize that was only for the addition.

I agree about the contract and that was a case of us misunderstanding what happened in what order. We had estimates, the bank used these to get an appraisal, the appraisal dictated the amount we would have as a loan. None of this was confirmed and was all about getting the loan amount towards the bigger project. Everything was needed in a hurry and came in last minute, but we knew the estimate was approximate and we didn't even have the kitchen cabinet final layout, fireplace designed, etc. We were thinking we were working towards a final estimate and agreement (we sent spread sheets and extensive documents outlining our understanding of the project). All the sudden, the estimate became an invoice that had never been vetted and was not even accurate. So the contract just never happened and the bank let them take a draw and they started work.

Michigan has a difficult to navigate LARA site and we did check for the contractors license. We could not find it but knew the bank was checking and would have the paperwork. So we assumed it was found as the loan was approved to the contractor, in his name with the designation of contractor. I actually asked for this information at a later time and the bank never provided it.

Michigan State Attorney General

There are different complaint categories for Builders/remodelers and for Contractors.

I wonder why obtaining $$ under false pretenses (claiming to have licenses, permits and so forth), construction fraud, failing to pay subs, etc isn't a chargeable offense. It really is a form of theft.

Unfortunately slipshod, or outright wrong, work is only a civil matter I think.

Can you get the records from the bank about when he pulled the payments, and what they were supposed to be for?

@bowllady "So to make them whole will cost more money than the remainder of the loan." . . . And you still have a lot of the renovation left to complete. I'm so terribly sorry for your losses.

This may not be a possibility especially given your rural location, but some people have decided to tack on an extra job to help raise money when working to get out of debt quickly. It's so unfair and not something you should have to deal with, but it could buy you time until you can get as much money back as possible out of the contractor.

Here's a Houzz thread from someone who ended up suing on their own and receiving a judgment against a criminal contractor. There is a detailed list of all the procedures these people went through in order to win the judgment. This was done on a smaller project than yours, so I don't know if it will apply, but it might spark some ideas for you at least as far as documentation is concerned. We're all rooting for you here to get your money back! The thread: What to do when a project goes completely south.

Bowl lady, I am so sorry for you. The contractor will be charged for fraud, but it takes years for the legal system to recoup money. I would suggest to alert everyone, including the lumber yard that you are not trying to not pay them ( you have done this with the subs) but are going to need a payment plan as this contractor took off with your money. I know someone who was a victim of fraud and the credit agencies were not willing to take legal filing from the DA, or other documentation that this occurred without her knowledge. They had to wait out the 7 years.

I am just so, so sorry you’ve been through this. Thank you for sharing your story and answering all these questions. It must have been hard. Please take care of yourself and your health, and remember that you will get through this. There are worse things to go through, I suppose, but this sounds truly tragic.

Thank you all. I am still so stunned this is happening. I have been meeting with people all day and I am convinced this was deliberate and has been in play for the contractor for the last hell of 7 months.

In the line of venting to you all, today one of the subs brought me his bill and told me to take my time paying as he didn't want my kids to not have Christmas. Another, who is a little of a talker and external processor, unintentionally revealed he had been told we living beyond our means and couldn't pay for all the work. He tried to reduce the bill for work he did. What!!!!! This is horrifying. The reason we are here is because we paid these bills and the bills weren't paid to the subs or lumber yard, or were bloated and didn't represent the work. Yes this sucks, and involving lawyers will push us out of where this is affordable, but it is not because we have champagne taste and a beer budget. We are very conservative financially and saved quite awhile for this project, as fiscally conservative people this is very scary and sucks, Ruining our credit is not an option. We won't spend money we don't have so we may not resolve the issues all right away, but we will be okay. We won't feel right if any of the subs are not made whole. That may take some time to resolve. The extra job idea is the way we have always worked, but would not be feasible as I am a University Professor. We don't make the big bucks but work about 60+ hours a week as is (and right now my second "job" is dealing with this situation).

So the immediate issue, the lien paperwork will be filed Monday morning. I called the lawyer and it took me two calls to get him to call me back at 4:00. I learned at 3:30 if a lien was placed it would mean all remaining loan funds would be frozen, effectively eliminating my ability to pay the subs their remaining costs in a timely manner. My Lawyer called as I was initiating a payment to the lumber yard to avoid the lien and hooking my bank and the lumberyard up to provide a check. His advice was not to panic and not pay the lumberyard as we had already reconciled that bill. He says the lien could be dismissed. I was not overly confident this would not still cause issues with my credit long term; he did not think it would. My bank went ahead and wrote to the lumberyard requesting the bills to reconcile the existing waivers (16K in waivers from the lumberyard with no details on what was purchased) with the unpaid costs. I'm hopeful the bank request will help. So now I am scared the lien will still be placed, I'll not be able to pay the subs, and we will have an unfinished house and wrecked credit.

Motupeg and Dormelles (and everyone), I really appreciate your ideas, help, and support. I have read all the links (and had read all of those previously to try to avoid this situation).

To get our house straightened out we need to finish the fireplace surround, and fabricate and install a mantel. The mantel is needed to avoid an exposed ledge and we need to have it installed to get the fireplace installation to pass code. For now, just like the last 5 months, we can have this partially finished.

We have some paint work to finish.

We have ungrouted tile to grout.

In the kitchen we have warped drawers and doors, a cabinet separating, the glass for a door is missing, and a cabinet requiring a rebuild (and a lot of flawed finish on the cabinetry). The required items are fixing the separating cabinets and the glass for the door, the others we can just live with.

We have a poor tile install and an incorrectly installed wood floor. We can wait to fix these until we can pay to do it right.

We have a roof issue relative to water and the rough-in builder has agreed to come fix this at no cost.

We have a flawed tree deck install that needs to have some boards recut and replaced as it is chipping a splitting. This can wait and doesn't have to be handled right now.

We also have a destroyed basement that was flooded twice and had a wee fire. This is completely torn apart and not usable bit can wait.

My husband and I discussed having his Dad come down to help us get the mantel set-up and we can try to do the paint and tile. This would help things look finished.

I think the BBB and state will be notifying the contractor of the filings within a couple of days. Hopefully this sobers up the "contractor." I know the state inspector will review the complaint and that goes through a process and finding without us having to pay. I'm fairly confident that should get some traction.

Thanks...it helped to get that all out.

Today I tried to get some final bills from subs so I could pay them, and sure enough, more has been paid to the contractor than has gone to the subs. So to make them whole will cost more money than the remainder of the loan.

You should not be paying subs without discussing with your CONSTRUCTION lawyer.

Now you need to work not only with the state but with your lawyer to get out of this mess. Additionally you should be suing the GC.

Thanks Cpartist...he definitely advised against paying subs. We have a construction lawyer referred by the building inspector. Thanks. So hard to see his company popping up on Houzz every time I come on.

I am so sorry!
Did you have contracts with the subs or were their contracts with the contractor? If they were directly with you, you would have to pay them. But if they were contracted by your contra tor, it is his responsibility

By contractor, but they can place a lien if they don't get paid.

I’m so sorry you’re going through this. You’re definitely helping future homeowners in sharing your story, so thank you for that! Ask your attorney about the option of getting a lien release from the subs with payment. For the lumber yard, I would have the attorney try to negotiate a payment plan like another commenter suggested. They should want the money more than they want to pay their attorneys, especially if they know the situation. I wouldn’t want to pay twice, but I’d hope to recover any overpayments from the contractor eventually (ask attorney if this would be recoverable), and I definitely wouldn’t want to risk my credit. Good luck!

Thanks Kirsten (side note, we share our names), I am really laying it out there. We will definitely be getting lien releases with the payments.

I think you are correct about the payment plan and the lumberyard. My hope is we can get the lumberyard to address this before they put the lien in place (supposedly Monday am as that is the last day in the 90 day window that the lien can be submitted). The timeline leaves us very few options.

Here is a legal question, we fired the contractor at 6:49 am and they submitted a Notice of Furnishings to the Bank at 8:00 am on this same day. What does this mean?

https://www.levelset.com/blog/what-is-a-notice-of-furnishing/?paidcampaign=&paidadgroup=&paidkeyword=notice%20of%20furnishing&msclkid=f1ee92a3642b17da582bcf48861ab525

Okay...that is helpful and we have read all that, but what is his angle? He filed this after he was fired and he is not a licensed contractor. Also, that was 10 months after the work started?

Looks like his angle would be to file a lien against your property for any unpaid draws IMO.

Naturally the best course of action is to speak to your construction attorney.

I'm not an attorney and internet advice is worth exactly what you pay for it. When you get this far and have the severe issues you describe, I truly believe you need the right construction attorney to make it through the balance of this process. From what I remember upthread, you do have an attorney now. If not, please find the right one.

In my state if a contractor files a fraudulent lien it is considered a criminal violation.

Your attorney will know what to do.

I don't know about Michigan, but an unlicensed contractor in Florida has no lien rights and his contracts are unenforceable by him, but not by the homeowner.

True Joseph. But the fact that the unlicensed contractor doesn't have lien rights doesn't stop them from filing a fraudulent lien which can mess up the title. That's why she needs to bring it up to her construction attorney right away she can get in front of this guy and get it stopped before he files one.

Thanks Denita, this is my concern. If he does this it forces a lawsuit (it also is fraud). He would lose but we would have even more hassle getting this removed. I connected with the lawyer who is planning to handle this in the am on Monday. What I hate, which is really no different than the last year, is him putting us through this stress when none of this is necessary had he just been honest and less greedy.

I hope you are able to overcome this soon so you can begin the healing process.

Thanks Denita...one thing we did that made us feel much more empowered today, was to start working on the house ourselves to finish up some of the work and make the home more livable. We worked on refinishing the fireplace surround (after rebuild number 4) and painting. We got a Christmas tree and we are putting it up tomorrow. I'm sending a detailed email to the lawyer along with attached developments and I am taking his advice.

Are you sure he is not a licensed contractor, or not working under someone else's license and claiming they are supervising him? it seems he is the one with a big issue and it will not go well for him if he is doing work without a license. At least that is the case in my state.

Your story is so disheartening. We've just gone through a similar experience. It's a shame that people can do so much damage and get away with it, even when you've done everything you know at the time to do to protect yourself. I hope that your contractor has to make things right for you, if that's even possible.

HI Sunshine_31...I'm so sorry you are going through this. My story has evolved and gotten worse. We switched lawyers to a more responsive lawyer who is really is working to help us, unfortunately we are in a really crappy and complex situation. We know for sure they were unlicensed, paid for unlicensed workers, did not get permits (but charged, collected, and provided waivers for permits), collected for items they did not procure, over ordered items that have disappeared from our home (flooring and tile), and did not pass through money from the bank to the subs. The bank is acting shady and has lawyered up. 12K in flooring has to be removed and a new floor needs to be installed. We had to have "special inspections" since the most of the renovations were unpermitted and have to pay $3500 to have the electrical fixed and brought to code (mechanical and plumbing issues are awaiting a quote). I should hear from the AG for Michigan today regarding the case...I'm trying to stay positive, but this is all so wrong.

Wow! I hope you keep updating this thread. My circumstance seems bad to me but is nowhere near as dire as yours. Maybe your story and even mine can help educate others so they can avoid these issues. What really strikes me about your story is what if you were not in the position to go after this contractor? It seems there is not fair and adequate protection for the homeowner.

Sunshine_31, where is your post on this. I saw the kitchen cabinets in the “look book” do you also have a post? That motivated me to make a look book

Okay...now I added an Idea Book to share the quality of work that went along with all the other hell of the renovation.

bowilady I don't have a post about my contractor experience yet, as it is still ongoing... i do have a review of Wellborn Forest cabinets though..for now, I have pictures of quality and workmanship but have not shared the rest of the story yet... will go check out your Idea Book now!

The photos of your remodel are horrifying :(