We are adding a substantial addition to our house. Our contractor, who was recommended by the architect, has done a good job so far, but is very, very far behind schedule. Over the past month, almost nothing has been done. We have paid him around 90% of the total (and, it’s a BIG total), and I estimate that only about 60-70% of the work has been done. None of the appliances, A/C, cabinets or finishes are installed.
We had a meeting today, and he admitted that he is out of money. Clearly, he used our money for either another project, or squandered it somehow. He has been stiffed by some other projects, so he’s been looking for other money to come in to let him finish ours. He had figures showing that there was something like $27K of materials and labor left to finish the job. Our contract shows we owe him around $20K. He said that the $7K was bad estimating on his part, and that he would eat that.
We would really like to get this finished - the original estimate was December. We came up with three options:
Let him finish it at the pace set by how fast he can bring in other jobs. Who knows how long that would be - maybe mid-summer?
Pay him as each remaining item is checked off the list, not including the $7K, and let him figure out how to pay for that.
Pay as each item is checked off the list, including the $7K, and then have him pay us back. Basically giving him a loan.
We are reluctant to pay anything ahead of schedule, since then we don’t have any leverage. On the other hand - we need to get this done.
I’d like to state: I like the guy, I think he is honorable, and would (eventually) pay us back. He’s also licensed, so we could threaten to report him to the ROC, but my wife (who is much softer then I am) doesn’t want to put him out of business.
Just curious, all the contractors I’ve dealt with was 1/3 up front, another 1/3 when the job was half finished, and then the final 1/3 when the job was completed.
Because we are idiots.
We had a 5 payment schedule, based on specific milestones. the first 3 were Ok, but we paid #4 before everything was done, foolishly. So, all we have is the final, work complete, payment to go.
At the risk of sounding crass, how much money do you have? Because me, in that situation, would just cut him loose and find another contractor (that’s not just 1 guy) and have that company finish the job.
I would not give him any money until he is done, I would see if leaning on the architect would get anywhere. I once wrote a company the review I intended to post to Angie’s List if they didn’t get the job in order, it got their attention and they got it together, but it took a lot of ugly confrontations; you might try something like by putting pressure in the architect. But I agree that in the long run, it might just be easier to find someone else.
ETA: But I sure as shit wouldn’t loan him 7 grand.
What does he need for materials for the next step of the job? You either go to his lumber yard and pay them directly or go to your choice of building supply stores (i.e. Home Depot, Lowes, Menards, etc…) and buy it yourself cutting out the middleman markup you know your contractor has been getting. Pay nothing in wages until the job is done. He should be able to support his free wage knowing he won’t get this until the job is done.
A concern, you may spend more on materials that you thought you already bought but the money went to another job. He should have an itemized list of purchased goods so if shows you bought it and its not there you may have a criminal case on you hands for stolen materiel. Not that your contractor is a crook but one of the oldest tricks in the book is to order excess material, bill the customer, then return the material for credit on behalf of the contractor.
I WOULD NOT have him continue to buy the materials. If he goes belly up or fails to pay the lumber yard you will have a mechanics lien on your house even though you thought you paid for the materials.
Thanks for the answers so far.
My wife and I have discussed this, and the consensus is, we are not going to pay him any more money until the job is done - in some reasonable (say six weeks) timeframe.
Let him figure out how he is going to pay for it.
I am researching our options to put pressure on him - I’m going to call the ROC tomorrow and see what they say, and my wife is going to talk to a lawyer and get their advice.
Tell him you need a written schedule for the remaining work before he can return to the job. Draw up a short, concise contract for the remaining work (or have your attorney do so) and state the terms clearly as to what work will be done, what will be paid, what the completion date will be, and when payment will be made. This is the only way you will be able to recoup your money in court when he defaults.
If you’re not willing to do that, then dump his ass and hire another contractor to finish the work. If it goes over $20K (or $27K), bill him for the difference.
TLDR: Don’t pay him until the job is done. Talk to a lawyer. Get a lien release. Maybe even consider calling your local news outlet’s consumer protection people. They love this stuff.
My, easier said than done, recommendation…don’t pay him anymore. Explain to him that you’ll pay him the balance upon completion, but not before. If your contract has a finish date that’s far enough into the future that he should reasonably (physically, not monetarily) be able to get the work done, reiterate to him that you still expect it to be done by then. If it’s already passed, give him a small extension maybe a month) as a gesture of good will. When you start getting closer to the original or new completion date, if it’s clear he’d not going to finish, it’s time to talk to a lawyer.
Don’t tell him you’re going to lawyer up. Don’t tell him you’re going to sue.Don’t tell him anything, just go talk to a lawyer.
Also, be sure to document everything. Jot down the date he said he was out of money. Make a (dated) note to yourself about when he said he had to collect money from future jobs to finish this one and/or he used your money for another project. While I don’t know the legality of it, a lawyer may be able to use the commingling of funds against him.
Keep in mind, if he’s doing a good job, you don’t want to piss him off. The money you’ve spent is already gone. If you have to hire another contractor, you’re going to be paying twice for a portion of the job. Even if you sue him, you may never collect so, at least for me, I’d be working the ‘can you please finish up our job’ angle rather than the ‘I’ll see you in court’ angle. But you should be ready for it.
And something very important, like, really, really, really important. Make sure he didn’t put a lien on your house. It should be in the contract you signed. If he did (hell, even if he didn’t), make 100% sure you get a lien release. If he’s getting his supplies from suppliers (as opposed to Home Depot type places), he likely hasn’t paid them. If there’s a lien on your house, you’re going to pay them.
Yes, it’s very common (or at least not uncommon) to have to pay for a job twice because the contractor disappeared with your money and you end up having to pay the suppliers.
His being short of cash sounds like a pretty standard line of bullshit to me, if you can find them talk to other customers, I bet you’ll find they’re all getting the same story
So…the very first time you’d paid an instalment ahead of the work being finished, things went pear shaped?
I’m guessing whatever arrangements you make with this fellow will see you being strung along in new and unique ways. I seriously don’t think there’s anyway, no matter what you arrange, that this thing just hums along again, as you’d like to see.
If I were you, I’d be letting him chase you for contact and info. And I’d be confused and noncommittal in the extreme at every contact! All the while sourcing another builder, like NOW.
Accept moving forward that he has 100% entirely lost your trust. Then act accordingly.
I hate to say it, but this might take a long time to resolve. My neighbor is in the middle of a kitchen Reno and the pandemic has brought everything to a stop. The contractor has just stopped coming and I’m not sure if building supply businesses are even open in the city right now. His kitchen is completely gone and he’s been told to shelter in place.
I find it useful to show up at the man’s house to discuss things. It’s like the old joke about outrunning the bear: you need him to screw you less that he screws his other customers. Being the guy who know where he lives tends to help with that.
Second the advice on liens. You need to cover, as much as you can at this point, the risk of having to pay twice for your supplies, while still having an unfinished project. Last, you are falling into his narrative that this is a problem for you both to solve. This is a problem for him to solve. Unfortunately, while you might get lucky, odds are that whatever you paid for, but didn’t get, is lost to you. Any further money will likewise also be lost: it will go to The project of whichever of his customers puts the most pressure on him.
We had another meeting with him yesterday, and told him that we were not going to pay any more money until the project was completed - in 4 weeks, and then would pay the final amount. We told him that his money issues were his problem, not ours.
He agreed that he would do this, and find some way to make it happen.
At the end of the day, all his tools were gone, and he would not return my text.
So, we filed complaints with the DA’s office and the ROC, for all the good that will do.
I also spoke with the architect, who was pretty surprised at this behavior. I told him that he he could get some reasonable explanation out of the guy, I would listen (but I’m not sure my wife would).
I’m now assuming that I am going to have to GC the rest of the project. We are making lists of everything that needs to be done.
Given your experience, the architect isn’t going to recommend this contractor to any future clients. So perhaps the architect can influence the contractor to make good on the rest of the work. At the very least, shouldn’t the architect be able to recommend another GC?
Well, now that he has taken off, remember to sue him for anything it costs over $20K to finish.
Do not just say “live and learn.” Sue him. Small claims court is fine. It’s your money, and your house, and your life; don’t let someone screw you over.
However, consult with the laws in your jurisdiction; most places have a time limit before you can fire a contractor for abandoning the work. Here it’s 45 days.