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Contractor problems...what would you do?
Old 05-19-2004, 10:45 AM   #1
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Contractor problems...what would you do?

My fiancees old house is a former rental that was owned by her ex father in law and sold to her 13 years ago. The ex-fil was a major mickey mouser when it came to working on the house, nothing is done to code, and nothing was done with a permit.

The house is currently getting a full exterior remodeling: roof, siding, windows, and a new bathroom. She bought it from for 60k; somewhat updated similar homes in the area are selling for $150-175.

I hired a couple of guys starting up their own contracting outfit, both with plenty of experience.

They gave me a quote for roughly $20k, which I felt was a little light but I figured some overage and renegotiation would occur as we opened up walls and discovered just how big the mouse ears the ex-fil was wearing when he did the work. So we open up the walls, find a bunch of dry rot, and that due to some excessive slab pouring one corner of the house is below grade and the footers and studs are shot. This is the bathroom we were going to remodel anyway, but instead of a tub/toilet/vanity we're up to gut and replace.

Of the two guys I hired, one hurt his foot and couldnt work anymore, the other guy evaporated while he looked for more help. Showed up three days later with a kid who stayed on the job for 2 days. Two days later, both the original guys show up with another new carpenter who actually lives four houses up from this property (I dont know him). The next two days this new guy is working by himself, seems to be doing a good job, but he's been given keys to my house and unsupervised access and nobody told me anything about this.

Next the original two guys show up again, and give me a quote that effectively doubles the original quote. I do the math and it looks about 5-7k high.

In the meanwhile, I'm talking to their new carpenter guy. He tells me he's going to finish the job by himself, it'll take him about 3 weeks, and the contractor is paying him a bonus to finish that quickly. Says the original two guys are working another job about a half hour away - the same two guys who told me they'd be working this project as their sole and primary project, personally (yeah I know, lies, damned lies, and stuff contractors say).

So I go ballistic on the new pricing, and asked them to reprice it. I'll buy all the materials myself and will pay them weekly for labor expended, figuring thats good for me because they cant bury extra costs and its good for them as it improves cash flow. I get a new quote from them saying it'll take six weeks to do, or three weeks for two guys and a laborer. Still the same labor cost, just broken out differently.

So I think I'm getting 3 card monte here. Further, they called me yesterday and said the work on the windows was complete, which triggers another payment. Kept pushing me to get them a check. I went to the house to inspect and the windows are far from done. Add lying to the list of issues.

So heres the decision point. I'm sorely tempted to fire these guys and go look for someone else, but that would be cutting off my nose to spite my face. Contractors arent easy to find, and this house with the code and permit problems is a touchy one at best. Its probable that most other contractors would insist on a full inspection and permit pulls (which the original contractor said was not needed, but it appears he was wrong in that regard and I told him so from the beginning). If it goes that way, I might end up having to double again the price of the work.

The contractor called last night and left me a message that it might be better for me to negotiate directly with the carpenter and leave them and their overhead out of the deal. Since I noticed the original two guys took all their tools with them the last time they were at the house, I suspect they were planning on bailing on me anyhow.

This guy probably has a license in order, I doubt he has any workmens comp or liability and he lives in a little piece of crap house.

So do you bite the bullet, pay the extortion and have it done, break it off with the contractor, hire the carpenter, raise the homeowners liability insurance, hope for the best and save about $15k, or dump the thing entirely, look for a new contractor, get everything above boards and probably add an additional 10-15k to the already doubled quote?

So far, this has been a perfect stereotype case of dealing with contractors: they disappear, send cheap workers, open up your house and then double the cost, disappear again, communicate poorly, pull out and leave me holding the bag.

Anyone also want to opine on the legal implications? I paid the down payment and for the materials. They've probably done about $4k more labor than I've paid. Finishing the windows is supposed to trigger another payment but I suppose interpretation of what constitutes "finished" is debatable. If it all goes to hell in a handbasket, what happens if I withhold payment? If they come back and say I owe them 6, 8 or 10 k for work done to date, I know we have arbitration, but I'm leery of liens and other sundry excitements. Since they failed to secure permits (as stated in the contract although ultimately from the counties perspective its my responsibility to make sure they did it), didnt complete the first phase, and want to bail, am I required to pay them at all?
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Re: Contractor problems...what would you do?
Old 05-19-2004, 01:58 PM   #2
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Re: Contractor problems...what would you do?

TH,

I would be inclined to fire the lot and start over with
a new contractor that gets everything above board
and does it right. It sounds to me as if the house
would still be a bargain vs. comparative homes in
the neighborhood. Offer to pay the old crew what
you think you owe and tell them to get lost.

BTW, I am sorry about your frustration. This too
shall pass.

Cheers,

Charlie
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Re: Contractor problems...what would you do?
Old 05-19-2004, 03:46 PM   #3
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Re: Contractor problems...what would you do?

I'm a never-say-die peckerwood. If it were me, I'd make a decision on the carpenter, and if his skills seem good, work along side him. If you start over, you may just start the same mess with a different crew of can't-shoot straight crooks.

Mikey
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Re: Contractor problems...what would you do?
Old 05-19-2004, 04:07 PM   #4
 
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Re: Contractor problems...what would you do?

I'm with Mikey on this one. the devil you know is usually better than the devil you don't know.

Work with him, see what his problems are, be reasonable. Everyone has to have a profit. - If you can't make this work because he is a genuine pain in the Arss, then dump him. Go the extra mile.

If he sees you are a good guy and willing to accomodate he may come around. I've worked with these construction guys a lot, and most of them are good guys with problems that can be worked out. They usually don't play well with high pressure, suit dressing Wall Street types if you know what I mean!
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Re: Contractor problems...what would you do?
Old 05-19-2004, 08:31 PM   #5
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Re: Contractor problems...what would you do?

Good thing I got rid of all my suits!

Thanks for the responses, I know that was a long post.

I feel like I went the extra mile with these folks, even working with them to figure out how to use some newer materials they arent familiar with. They just arent very good with the communication and customer service aspects.

It may have sort of solved itself. I called the contractor (there are two brothers doing the work, the wife of one holds the contractors license, the wife of the other works with my fiancee...how we got hooked up), and after a few moments of patiently explaining that I think we still need to work on communication and rebuild our trust relationship, she went off like a machine gun, wouldnt let me get a word in edgewise, told me to get a new contractor and hung up on me.

Several hours later when we went to the house, the other brother and the carpenter were still working and unaware of what had transpired. Apparently they dont talk to each other very well either. We explained what happened, they packed up and headed out. Later we got a call from that brother saying we should work it all out, we gave him some times we were available to talk tomorrow and he said he'd call back within the hour. That was 2.5 hours ago.

I suppose I should have understood immediately that since I'm the customer, I'm always wrong... :

The good news (maybe) is that my fiancees brother is a contractor, but he's in the process of building a batch of new homes. We'll call him and see if he can send one of his crew down to survey the situation and maybe hook us up with a couple of guys that can help me finish the tougher parts.
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Re: Contractor problems...what would you do?
Old 05-20-2004, 05:06 AM   #6
 
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Re: Contractor problems...what would you do?

When you have contractor problems (and who doesn't?)
too bad you can't call Tony Soprano. He'd know what to do

John Galt
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Re: Contractor problems...what would you do?
Old 05-20-2004, 06:34 AM   #7
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Re: Contractor problems...what would you do?

It sounds like my brother is working for you. haha.

We went through similar problems with him...which is exactly why they say you shouldn't work with your blood. My husband said, "You can fire a contractor, but not a brother-in-law." Lucky for me, my husband knows how valuable my relationship is with my brother and we've worked things out.
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Re: Contractor problems...what would you do?
Old 05-20-2004, 12:22 PM   #8
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Re: Contractor problems...what would you do?

Yeah I was laughing about it last night. Its like "stereotype contractor disasters 101".

We fired them. The hinges were that they lied to us, saying some work had been completed to meet a payment milestone when the work hadnt been done, then claimed the work wasnt part of the milestone when the contract says it is. Then they declared their new revised bid "non-negotiable", which I just got the detail on yesterday and have never been walked through. How the heck is something you havent even supplied or explained to a customer "non-negotiable"?

Oh well. Thanks for the input and letting me bleed on everyone a little.
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Re: Contractor problems...what would you do?
Old 05-21-2004, 03:01 PM   #9
 
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Re: Contractor problems...what would you do?

I don't know if this will help anyone but here goes.

Back in the mid 70s, I hired a house painter. He asked
for front money to buy materials. Foolishly, I paid it
either certified or cashiers check (I know what you're
thinking but I was 29 years old at the time). Anyway,
once he got his check he disappeared. Luckily, I wised
up before the check cleared my bank. Normally you
can't stop payment on a certified check, but I did.
I stated that a fraud had been committed, and on that
basis was able to have my bank return the check.
So, I lost no money and learned a valuable lesson.

John Galt
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Re: Contractor problems...what would you do?
Old 05-21-2004, 03:55 PM   #10
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Re: Contractor problems...what would you do?

One concern TH mentioned was that the carpenter, if he went ahead and did the work, likely did not have insurance. I want to point out that your homeowner's insurance policy might not cover you if the carpenter got hurt. You might need a separate workers compensation policy. It really depends on the state you live in and your own homeowner's policy.

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Re: Contractor problems...what would you do?
Old 05-21-2004, 09:38 PM   #11
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Re: Contractor problems...what would you do?

That is 100% true. We never went to the insurance agent but I was already figuring we'd need some sort of umbrella liability at a minimum. We're still thinking of having a friend who is a contractor hire the guy and put him under his license and insurance to do the work, and give him a small cut for his trouble.

The hilarity continues. Now the contractor is claiming they didnt tell me to go get another contractor. Only problem with that is I recorded the conversation. Best part was playing it back for her husband over the phone. Apparently a contractor taking off is called "abandonment" and is illegal in CA.

I think that regardless of what she said, offering me a bid with no detail, blowing me off for the walkthrough, then saying the bid is non-negotiable and that work wont continue until I blindly agree to it is legally called a passive break of contract (or something like that) because obviously nobody with a brain would agree to it, hence proposing an unacceptable proposition is equivalent to bailing out.

Anyone familiar with the exact term for that (besides the obvious funny ones?)? Its on the tip of my tongue but I cant come up with it.
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Re: Contractor problems...what would you do?
Old 05-21-2004, 10:05 PM   #12
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Re: Contractor problems...what would you do?

I don't know what that's called. But I was married to a contractor for 15 years, and the house was in worse shape when he left than when we moved in! (Tore a bunch of things out, fixed a couple of them.)

My ex meant well, and knows a lot, but he was an absurdly lousy businessman and routinely lied when he couldn't keep up with his commitments. He seemed to think it was necessary to promise to be there "tomorrow, the day after at the latest" even when he was booked all week. People rehired him all the time, though; I think it was because he was so cheap. And a nice guy, really.

I lucked into finding a gem of a contractor and, although he's certainly not the cheapest guy around, I will not trade him. He's not the one to call when I want the shed fixed or the chimney repointed, but for a fine finished product I wouldn't have anyone else. He does better work than my ex!

Anne
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Re: Contractor problems...what would you do?
Old 05-22-2004, 10:43 AM   #13
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Re: Contractor problems...what would you do?

Quote:
That is 100% true.

I think that regardless of what she said, offering me a bid with no detail, blowing me off for the walkthrough, then saying the bid is non-negotiable and that work wont continue until I blindly agree to it is legally called a passive break of contract (or something like that) because obviously nobody with a brain would agree to it, hence proposing an unacceptable proposition is equivalent to bailing out.

Anyone familiar with the exact term for that (besides the obvious funny ones?)? Its on the tip of my tongue but I cant come up with it.
I am trying to remember law school. The only terms that come to mind is "anticipatory repudiation" or "anticipatory breach."

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Re: Contractor problems...what would you do?
Old 05-22-2004, 02:19 PM   #14
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Re: Contractor problems...what would you do?

Sounds vaguely familiar. I think one of the terms I remember in the employment area is a "passive quit". Used for example when an employee simply stops showing up for work or intentionally behaves in a manner intended to get themselves fired, like sitting at the desk and doing nothing.

Some legal benefits to dropping someone due to the passive quit rather than a full on fire.

In this case, if we terminate the contract, theres verbage that allows them to bill us forward for any perceived work or materials performed. Considering they did some stuff that wasnt up to be done yet, but didnt do other stuff, took some materials and left others, and some of the work may need to be redone, I think we're fair and equitable on the compensation at this time...but I really dont feel like going in front of a mediator and arguing it out.

So I'm just trying to get the contractor to issue me a letter saying the contract is mutually concluded and our final payment IS the final payment.

May be like pulling teeth though. She seems determined to place the blame, but not accept any. Guess how thats going to work...
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Re: Contractor problems...what would you do?
Old 05-22-2004, 04:48 PM   #15
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Re: Contractor problems...what would you do?

Ugh, well look on the bright side -- it could have been much worse. I have a neighbor who recently built a new house. The general contractor was paid by the owners, but he then failed to pay the subs and skipped out. The subs now have a contractor's lien against the property. Nobody is happy.

I always look for contractors who are recommended by somebody in the real estate biz (either a builder, agent, or inspector). I check them out on the state's web-based database for license status, insurance status, bonding status, and any complaints. I try to hire them for small jobs first, and if they work out, use them on bigger jobs later.
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Re: Contractor problems...what would you do?
Old 05-22-2004, 06:54 PM   #16
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Re: Contractor problems...what would you do?

Yeah I made sure the contract said the general contractor was responsible for all subcontractor payments and forgo any right to liens.

Probably the biggest thing to make sure is in your contractor contract.
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Re:  In view of the problems you've had so far...
Old 05-23-2004, 12:41 AM   #17
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Re:  In view of the problems you've had so far...

... I sure hope you've re-keyed your locks!
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Re: Contractor problems...what would you do?
Old 05-23-2004, 09:19 AM   #18
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Re: Contractor problems...what would you do?

Only gave them a key to the back door, and I was putting in the new deadbolt at the same time I was telling them to go take a hike.

I installed the new front door locks the day before.
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