ICall the Building Department and ask for the permit costs for the work at your address. Look at their copies of any plans submitted. You'll have a better idea of what the costs are. I'm surprised this wasn't in the quote. Or discussed.

'd ask for additional cost details on several items on his bill. Receipts for everything on the Entertainment Center line for $2976. Same for other lines. Afterall, $45k has to cover something.

When you do come to an agreement, add the notation "Full and Final Payment" in ink to the back top of your check and make a copy.

18K is incredibly cheap for that list. Id expect it to be double to triple that. Same with the cost of the basic structure. Way way way cheap.

To be fair, there were a few things that were added on to the project

What exactly are 'a few things'?

Were all of the items itemized in the $18k bill added after the $45k quote?

Yes, I agree with the other questions. Were the items in the 18k quote part of the original bid? Or are those chrages for adidtional work? The charges seem very reasonable for the work. I would have expected much more, at least 2-3x that amount.

In the written contract, what was the basis of compensation? I get the impression there was no limit or cost accounting stipulated. Pig in a poke comes to mind. Is there any evidence the subs have been paid?

Really the only things that were additional was the work in the office, the bathroom shiplap and the pocket door.  I'm confused that things like the plans and permit, fire sprinkler and tree removal are being shown as additional fees.  These were all things that were known from the very beginning.  Even if these are reasonable prices for the work to be done, our contract was still written for $45 and we never received any verbal or written estimates of amounts for anything going over.  He told us he was trying to keep things to 40k, so to get a bill at the end for $18 over and above is nearly 50% of the budget.  And again, we had asked for an update of where we were at with the budget in January.  Never heard anything about any numbers until this bill.  We would have told him not to do some of the work, like in the office, if we would have known where we were at over all.

@res2 the contract was written for $45k and it states on it that any additional work or fees need to be agreed upon in writing, which never happened.  Which is what I'm also curious about.  Can I hold him to this?

This "nice older man" did more work than originally agreed to and you are trying to get out of paying him *anything* additional for his work? The way he operates his business may not be the smartest but I do think he is owed something for the extra work outside of the scope of the original project. I would work with him and find a compromise you can both live with, especially since he is your neighbor.

@caroline I'm not saying I won't pay him anything additional, I'm saying he violated the terms of his own contract by not giving us estimates on additional work.  I found another email from November when I had asked him where we were at on the budget.  I never got an answer.  We asked again in January.  I was told I would get an answer and never did.  After having asked and not gotten an answer and told things weren't too much, in my mind that meant we were much closer to our original budget than 50% over.  And again, things like plans & permit and fire sprinklers, etc were known from the very beginning of the project.  It is just frustrating to have a surprise bill show up months after having heard from him last and for much more than we ever anticipated.  I guess somehow I am unreasonable though and in the construction world I'm just supposed to accept surprise bills. ᾓ7. Don't know any other circumstance where that is how things would go down.

I think you need to talk to him. Tell him you thought permit fees were included in original bid (in my limited experience they have always been extra). Also ask about the other charges that you thought were included. Maybe you can reach a compromise. All in all the fees, inclding the 45k, seem very reasonable.

Besides converting the garage to living space, a whole new garage was part of job. Which would involve site prep prior to construction, footings, slab... What are the dimensions of the new garage?

How many square feet of improved living space did you gain? Dimensions of the converted garage space?

Exterior finishes where the old garage doors were removed. Possibly driveway removal? Interior finishes to include a fireplace and cabinetry. Framing & finishing a laundry room & office w/ a pricey pocket door...tiling...plumbing, shelving, upgraded interior finishes (shiplap)....tile floors...

Was HVAC upgrade for the converted garage included?

Before & after pictures please.

You got a whole lot of bang for $63k.

If that mess at the bottom of the original invoice is your full contract, then you should see an attorney.

I don't care if it is a good deal or a bad deal, the OP has a right to be reasonably informed of their obligations. The contractor has a (badly) written in a method to keep the OP informed and then ignored it and expects to benefit from that breach of contract and duty. The OP notes that had they been informed of the cost as per the agreement they would not have agreed to those items. That is really the entire case, the contractor had a duty to inform and didn't, now the OP has actual damages from that neglect.

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Whether or not the OP should pursue this further is really up to the OP. However, seeing an attorney in your area is the next step. I think you have a reasonable basis to negotiate a reduction.

One could also argue that without a written estimate, the OP should not have moved forward and agreed to allow the contractor to do the additional items. The OP nonetheless allowed the contractor to perform the additional work without a written contract.

In my limited legal knowledge, the contractor is supposed to understand estimates and contracts. He/she has an expectation of expertise in this area. The responsibility is not on the consumer. Not saying this is how it would turn out in a court but that would be how I would view things. Now, many jurisdictions have laws and precedent favoring the contractor which would probably overrule the common sense expectation of unequal knowledge.

Good cautionary tale.

Way too early for lawyers. Make him an offer please.

"One could also argue that without a written estimate, the OP should not have moved forward and agreed to allow the contractor to do the additional items."

Except the contractor ignored multiple requests for price updates. That is actually the bigger sin here, had the OP had extra work done and never worried about the cost then they would have little recourse.

"many jurisdictions have laws and precedent favoring the contractor which would probably overrule the common sense expectation of unequal knowledge."

In my experience the opposite is true. Most states have consumer protection laws, however, in many cases unjust enrichment bars any actions from consumers.

You can't act in bad faith in a contract. Just as a contractor can't profit from keeping the consumer ignorant, the consumer can't get free work done by using a technicality in the contract.

Were it me, I wouldn't fight the amounts that the OP notes were extra. I would argue that by refusing to update the OP on budget when requested, the contractor has no reasonable right to amounts that the OP didn't realize were outside the original contract.

@Joseph Corlett, LLC recommended making an offer over seeing an attorney.

Sometimes I like the advice to not see an attorney and sometimes I think it is bad advice. The value of an attorney in any situation is a simple calculation. When your your total cost with an attorney is less than your total cost without an attorney they add value.

If you believe the contractor is going to be just as responsive to a settlement letter from you as they would be from attorney, then by all means avoid the attorney. But don't be penny wise and pound foolish.

I would highlight the items that you agree were additional on the second invoice, add the $2500 to get to the original high estimate of $45K, and approach the contractor with check in hand to say you believe this is a fair settlement.

Just because someone sends an invoice doens't make it valid.

And I hope you have a better estimate / contract that has some more detail - which would be pertinent here.

You trade him a check for signed lien waivers. Yeah, I'm practing law without a license. So sue me.

Bad faith is watching all this additional work being done, knowing it is going to cost more but trying to get out of paying for it.

You have decided that this drama needs a villain and who you want to paint as that villain. It is not bad faith to get on a message board and ask about the reasonableness of a position and, in fact, demonstrates the opposite. The OP not wanting to pay $23,000 more than the verbal estimate and $18,000 than the poorly written and breached contract, is perfectly reasonable.

You are correct that the OP shouldn't expect to have work done for free, however, nor should they have to pay anything demanded because the contractor said he could do things for "not too much money." Because your "not too much" and my "not too much," are likely different amounts, almost every state has laws that address these situations, in fact, the contract itself did. Which was ignored and now the real pickle is whose "not too much" do they use. The person most able to determine the cost is the one responsible for communicating it and the one who is most penalized for not.

They added a LOT of additional work beyond the original just demolishing and rebuilding the family room to OTHER rooms like the kitchen, laundry room, and bathroom! And then go back and say nope I am only paying for the work done to the family room can I get out of it based on the original invoice? They even upgraded the family room from the original invoice by building an entertainment center with cabinets. Should the labor and materials be free? Yes, absolutely the fault of the contractor for not even providing them an estimate of the cost of the additional work. But it is also wrong of the homeowner to try to weasel out of it by saying nope I wasn't given a number so I'm not paying it, even though I verbally approved and watched the additional work being done?

I have several contractors we work with (we flip homes) that are very old school like this and give verbal estimates of jobs. And not once has there ever been a problem. When there is an issue with an invoice we talk to them about it, not make it adversarial from the beginning. And they work for us this way because they trust us and know we will pay them. I am surprised the OP contractor worked this way on a one-time job.

BTW the scope of the work they had done is a bargain! I would happily pay that invoice.

They knowingly allowed the contractor onto their property to do the work without an estimate. They asked multiple times and did not receive one, yet they still allowed him to proceed knowing it would cost something. They need to negotiate with the contractor, although the prices are already so low…

Pay the man. You know you asked for that work. He provided. That’s a lot of work for just $18k. I think he undercharged you, actually.

Many seem to be creating a false dichotomy, pretending that the choices are either pay for the work or not. The choices are not pay in full or pay nothing, there are a number of settlements that the OP and contractor could arrive at such that both parties bear some responsibility for their actions. No one has advised the OP to walk away without paying anything so let's please stop pretending that this is an all or nothing thing.

I have several contractors we work with (we flip homes) that are very old school like this and give verbal estimates of jobs. And not once has there ever been a problem.

There is no information asymmetry problem when you are a flipper, so different rules apply as you should have an understanding of reasonable costs.

However, as someone who flips/develops properties occasionally... I call B.S. If someone gave me an estimate between $28,000 and $32,000 and then showed up with an unspecced firm offer at $45,000, I would not sign the contract... and neither would you.

It is one thing when a contractor has done the take-offs and realizes that their first estimate was low, but it is another when there are no take-offs and they just show up with the same estimate and it is suddenly 60% higher.

"No one has advised the OP to walk away without paying anything so let's please stop pretending that this is an all or nothing thing"

We are basing the not wanting to pay for the additional work on the OP own words:

"So as far as I'm concerned, we only owe him $2,500 to get to our $45k contract price. To be fair, there were a few things that were added on to the project, but he never gave us a price on them even when we asked, or let us know we were over budget."

"Even if these are reasonable prices for the work to be done, our contract was still written for $45 and we never received any verbal or written estimates of amounts for anything going over."

"the contract was written for $45k and it states on it that any additional work or fees need to be agreed upon in writing, which never happened. Which is what I'm also curious about. Can I hold him to this?"

She wants to know if she can hold him to the original contract and pay $45,000 total for the whole job, even after adding quite a bit of additional work. She hasn't even paid the full $45,000 yet! The permits and tree removal alone, get her to about the full $45,000 and are related to the original scope of the project. Everything listed on the additional invoice are additions the client requested.

The additional $15,556 is what she should discuss with the contractor and no he shouldn't have done that much additional work without giving them rough estimates but the client should not have let them proceed either. To me, based on what was done, it sounds like the case of remodeling one room and then having it spill over into several more projects. No reasonable person can believe that all these additional projects were not going to incur a significant cost.

"We are basing the not wanting to pay for the additional work on the OP own words"

This doesn't have anything to do with what I wrote. As I discussed the advice given rather than the question asked. So I am not sure why you quoted my post.

However, the OP also said, "I'm not saying I won't pay him anything additional, I'm saying he violated the terms of his own contract by not giving us estimates on additional work." Which is conveniently being ignored.

Edited to remove some things that are not helpful to the OP.

In the end, the OP's original question is largely immaterial. No homeowner should ever have a bill that is a huge surprise and no contractor who presents customers with huge surprise bills should be defended whether or not they are nice old men.

The OP notes they asked for a budget update 6 months ago and again 4 months ago. The two most likely reasons they didn't receive one are (1) the contractor needs to get his crap together as he was clueless on costs himself, or (2) the contractor knew very well the amount was going to be upsetting and thought it advantageous to keep the homeowner uninformed.

The OP may well or may not well be within his/her rights not to pay the additional amount -- I am not a lawyer. However, the services have been rendered - services that are not included in the itemized list in the original contract. And it does not look like there is any price gouging. If this were me, I would pay the contractor the additional $18K plus the remaining $2.5K in the original contract.

The more I think about this it bothers me. The OP presents, to me, - a moral dilemma, aside from whatever the legalities are. I’m sure there must be people here who have experienced underbidding or improper contracts. Plus, he’s a “nice man” who lives in the neighborhood. There’s no way in heck I’d stiff someone like that, bad contract or not. My last painter underbid his work by probably 30%. We made him whole even though he was willing to honor his contract.

For your 30% guy, I'd pay him the agreed price and offer to reimburse him for material increases he could document that changed between the bid date and when he bought the materials. That makes him whole. No more.

Well I guess we’ll agree to disagree. They spent an extra 3 full days. The extra (underbid) time was spent in difficult prep and did a terrific job. I felt it was fair.

That man is going out of business at 1/3 price fire sales rates. He just doesnt know it yet. Sadly, a lot of contractors are much better carpenters than they are businessmen. This one won’t get a second chance after being stiffed for that. That’s a large enough sum to send a pretty marginal business under.

The more I think about this it bothers me. The OP presents, to me, - a moral dilemma, aside from whatever the legalities are. I’m sure there must be people here who have experienced underbidding or improper contracts. Plus, he’s a “nice man” who lives in the neighborhood. There’s no way in heck I’d stiff someone like that, bad contract or not.

How is this a moral dilemma? The contractor was negligent in a moral and legal duty and now might have to pay for some of the damages caused by that negligence. That doesn't seem like a moral dilemma.

Contractors owe either a duty of due care or a fiduciary duty to homeowners depending on the particulars of the contract. In every single state in the U.S. a contractor is required to respond to relevant budget and cost information in a timely manner. Moreover, that seems a moral duty. If you are spending other people's money, they have a right to know how much when they ask.

Many of the people here seem so focused on the reasonableness of the invoice that they are simply ignoring the unreasonableness of the surprise.

Moreover, mistakes are valuable to a business and the market. Most businesses get better by identifying things that are not working well and improving on them and we are all rewarded when that happens. I doubt this is the first time that the "nice older man" failed to respond to an update on the budget. Had more of those people decided they were unhappy with that behavior, the OP likely wouldn't be in this situation, because not getting paid is a powerful motivator to get better.

This is a completely different situation than your painter.

Suprrise bills at the end are way too common. (Thinking back to my first house build and we got hit with 10% more after we'd been asking how we were doing on budget multiple times, etc. Luckily - it was prior to appraisal and final loan - because we didn't have $40K at the time (we also settled for less than the overage) but bry's comment about contractors either not knowing (unlikely) or just delaying because it would introduce stress into the relationship...

I am pretty sure the latter is common. And I understand why - but it's still amazing to me that I just realized this was probably our case after 27 years. ;-)

And a warning for folks to start these conversations EARLY and REQUIRE all the change orders and costs to be done in writing from day 1 - as small / insignifncant as they may seem - track them (even if it's text / email) and get in the habit.

I just had a friend tell me of a new build with 37 change orders. Stuff like repainting the bathroom for the 4th time because they didn't like the color. Fine by me were I the contractor, because I'm marking up each one unapologetically. And the next one isn't getting done until the last one was paid. Had this guy done this, we wouldn't have this thread.

Hey bry911- thank you for explaining. I always enjoy your posts. With this one, I’m sticking to my original thoughts. Maybe I’m a softy, but my Dad was a great creative and very talented guy. However, he was a terrible business man. So I guess he’s always in the back of my mind when I see/read/experience things like this post.

Looking at the original invoice and the "extra" invoice, it would seem the contractor is double-dipping for the framing, electrical, plumbing and drywall since they are explicitly mentioned in the original quote. If tree removals, permits, and sprinklers were required from the beginning, I would expect those to be included in the original quote as well.

The "extras" I see would be extra doors (provided they truly were extra), cabinets, countertops, shiplap, fireplace, countertops and tile. My thoughts are that the true price should be somewhere in the middle. (Based on a quick addition by the very non-detailed line items, somewhere around $7-9k)

Of course, I wouldn't give him a dime with lien waivers. Playing hard ball, you might argue that he didn't do anything with a written change order so he's SOL based on his own quote but that doesn't seem fair to me. I'd figure what you think is fair and reasonable and show up with both the check, a corrected final invoice (in your mind) and lien waivers, then tell he gets the check as soon as he signs the waiver and corrected final invoice.

The contractor does not appear to be double-dipping, the new electrical is for work in rooms outside of the scope of the original contract, I.e., the kitchen, etc. Also, original contract specified drywall, and they added Shiplap.
I think it was sloppy on both ends, but I don’t think the contractor was trying to rip them off. He said he could do it for not much, the final costs for each extra line item look very reasonable to me, and he probably didn’t realize that they had no clue what costs would be.
I think they should pay most, if not all of the invoice, it’s a learning opportunity for them, and it seems like they got a much better looking product than they originally contracted for.
Finishes make all the difference in cost….

@bry911 For a noob, can you explain what take-offs are? I couldn't figure it out from the context.

It is one thing when a contractor has done the take-offs and realizes that their first estimate was low, but it is another when there are no take-offs and they just show up with the same estimate and it is suddenly 60% higher.

@toxcrusadr - Take-offs are creating a materials list from the plans. In my area, and many others, take-offs are usually done by the lumber yard which will give the contractor a list of materials and prices for items that they supply.

OK, I understand what it is now. Strange term for 'materials list' but it's clearly an industry term that a lot of people use.

I think everyone deserves to make a decent living for good work, I wouldn’t feel right about not paying the extra. Do you get paid when you work? I would discuss it with him to get a better understanding and then pay it.

@Kate said, "I think everyone deserves to make a decent living for good work, I wouldn’t feel right about not paying the extra. Do you get paid when you work?"

We never pay for the work that people do, we pay for the value that the work created for us. Just because you do the work doesn't mean you have created value for someone. Which is why it is tantamount to communicate cost to people.

Suppose I order a modest priced bespoke suit from a shop and they instead request some of the world's most elite tailors make a Kiton K50, do I then owe $50,000 just because some of the world's most elite tailors spent more than 50 hours making a suit especially for me? Just because those tailors deserve to get paid a respectable rate for the work they do, doesn't obligate me to pay for something I didn't want. I strongly suspect those tailors are nice older men also...

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We can make the above suit example match the OP's situation a bit more. Suppose the original suit ordered was $2,000. Suppose then I asked for a few modifications to the suit, like a few hidden pockets and a slightly wider lapel and was told that wouldn't be too much more. Suppose then I get a $50,000 bill for my suit along with a real time sheet that showed the incredible amount of time the tailors worked on that suit. Should I then have to pay the bill?

@bry911 thank you.  Yes, what you stated is how I feel.  We still haven't resolved the situation because since I posted the question, we have also been dealing with the fact that it became very apparent as it got hotter that the room is not cooling.  We've now had 3 AC companies out and they all basically laughed at the way the duct work was done.  In the next couple weeks we will be having duct work redone.

Homebuidling and major remodeling stresses the budget. At the end of the process, you are likely in a less cash position than when you started. Depending on your financial situation, and if you've already completed your mortgage application (or had a construction to perm, or, or, or) getting access to $18,000 like the OP is being asked might be a problem.

It's ALWAYS easier to spend someone else's money.

@MaryAnne we went from being told they'd keep the job close to $40,000, to a bill for $60,000.  In my life that is not a small amount, especially without it having been communicated.  The contractor has stated he will work with us on coming to an agreement on the price, but as I just mentioned to @bry911 the entire addition is currently unusable due to air conditioning being done wrong. The cost to fix it will come out of what we would have paid him.

@MaryAnne - You are also selectively looking at magnitude rather than the absolute increase. The OP's price didn't go up $800... It went up $20,500. There is no material difference between paying $20,500 more than you expected for a suit than there is paying $20,500 more than you expected for a remodeling project. In the end, you still have $20,500 less.

Additionally, the magnitude is irrelevant to my point. If someone should be paid for the work they do regardless of how it creates value, then why does the reasonableness matter? The point being made by some is that the contractor did the work and thus deserves to get paid for his work. If he did even more work and came in with a bill for $400,000 would that also be reasonable? I mean he spent the time doing it and all. Why do you get to decide this amount is reasonable for the OP while allowing that a higher magnitude is unreasonable even if it represents actual work done?

@MaryAnne - Well I am a college professor and so I think I am OK... However, we should note that contractors and insurance companies are the two groups most likely to be sued.

Breaking the law while scamming homeowners is a pretty low character trait. Just to be clear, I have not discussed manipulation of "some legal terms." I have discussed the contractor breaking statutory law (in all fifty states and Canada) by not communicating the current cost of the project two separate times and then hitting them with a large bill.

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No one is advocating the contractor not be paid. Some few of us are advocating for a reduction because of the contractor's failure to report cost information when asked. Something all contractors are required to do and something you should fully expect your contractor to do.