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August 22, 2009
fight with contractor
At the end of a long enormous project, my GC and I can't agree how much money we owe them. In the last few months, they continued to plaster us with excessive and unfair change orders. Our architect agrees that the majority are unfair. Anyway, at this point, the difference between us is about $45,000. (We think we owe them 45, they say 90) The project is completed, we don't need anything from them (although they haven't fully finished the punch list, and there continue to be problems with some of the work they did, but if need be we could find others to do that -- we're sick of them). We seem to be in a stubborn place where neither of us will budge. I think if they sued us, we would win, but obviously it's to no one's advantage to go there. I'll give them what I think we owe them, but no more -- is there any reason I have to settle beyond that? Can they do anything to us? I suppose they could put a lien on the property, but a) couldn't I fight that? and b) I have no plans to sell or do any major renovations in the next 10 years
Comments
Obviously all that matter is what's spelled out in your contract with the contractor.
If they did work beyond what's in the contract, you owe them additional monies for the work even if there was only a verbal agreement.
$45k is big bucks, so I'm sure you'll get sued and a lien will be put on your property.
I suggest you settle and make sure you get a receipt signed by the contractor that says he's been paid everything he is owed.
Posted by: IronBalls at August 22, 2009 10:45 AM
And you claim that it's to "no one's advantage" if the contractor sues you.
I'd disagree completely. It's to the contractor's advantage and to your disadvantage. He has nothing to lose and everything to gain. If he win's, you may be found liable for his legal costs as well . . .
Posted by: IronBalls at August 22, 2009 10:49 AM
"I think if they sued us, we would win"
Why do you think this way? The actual work was done. There probably were some verbal agreements as well.
Posted by: bobjohn at August 22, 2009 11:32 AM
do you have an aia contract? what type of contract agreement do you have?
Posted by: svs at August 22, 2009 11:33 AM
What's spelled out in the contract about change orders? Did you have to sign off on them and approve the scope of work and the price before the work was done? If you have not agreed to them in the manner specified in the contract, the contractor is not entitled to payment for them. If you have agreed but you are disputing the amounts after the fact, that's a very tough argument to win.
Yeah, probably the worst they can do is put a lien on the house and then execute it (i.e. actually sue, rather than letting the lien sit). It means both of you incur legal costs and headaches for the next few years while the thing wends its way through the legal process. For $45K, I'd assume they'll pursue it if they have any legal leg to stand on. Probably worth it at this point to negotiate with a neutral third party present (architect, if s/he's not compromised) to help horse-trade and come up with a number you can both live with. If you get there, definitely get a lien waiver as part of the agreement so you can hand over the check and be done with this contractor forever.
Good luck.
Posted by: zeebee_in_bklyn at August 22, 2009 1:03 PM
How did you get to the point where there is a $45K difference? It happened overnight? Both you and the architect were asleep at the switch? I find this story very hard to believe. Don't you have a contract? Were you not paying as the job went on?
Posted by: KAZ at August 22, 2009 1:35 PM
Stand your ground. You're doing the right thing. Change orders should have been approved before they were carried out. Let them come after you.
***Bid half off peak comps***
Posted by: Brownstones Half Off at August 22, 2009 6:31 PM
Did your contractor have a department of consumer affairs license? if he did not you will have an easier time with the money.
If he puts a lien on yout property the judge will remove it because he worked with no verifiable license.
Posted by: Ysabelle at August 22, 2009 7:57 PM
I might stand my ground and not give him a dime. You're looking at 90k. 90k can cover a lot of court costs. Of course, we haven't heard the other half of the story.
It's highly unlikely a judge would just find that you owe every penny of 90k. Allegedly you have an expert witness (your architect) who will testify that these change orders were unfair.
Sound to me like the contractor underbid the job and is trying to make up for that at the end.
You might consider binding arbitration. If you're under an AIA contract, I believe that's part of it.
Mainly, I'm agreement with BHO and that don't happen too often :-)
Posted by: denton at August 23, 2009 7:14 AM
THanks for the advice, all. I'd like to settle also -- I just don't want to settle for more than what we deserve to pay.
By the way, this was a big job, and I've been paying the contractor all along. This represents the last 10% of the job. The change orders up to a certain point were approved, and I agree we should pay all of those. There were a lot of change orders at the end that I don't think were fair, I disputed from the beginning, and the architect largely agrees with me. That's the 45K difference. I think they got handsomely rewarded, theyre just being greedy. We had an AIA contract and an extremely detailed scope of work. Nonetheless there were some grey areas despite the detail and some of them fall into the grey area. Others just seem like sheer robbery. To none of them did I give verbal agreement.
yes, and the contract dictates binding arbitration.
Posted by: 146steven at August 24, 2009 3:17 AM
Contact the DCA for Advise, and if your Contractor is registered/licensed, open a complaint. If not, try and report them. They can loose their vehicle, be fined HEAVILY, and not allowed to continue work for fear of jail time.
Advice on here varies greatly and your best bet is to only get advise from people that really truly know - Otherwise you may dig yourselves deeper.
I do know this; verbal agreements do stand, and a mechanic's lien may be written against your property. If they're willing to negotiate - perhaps acquire a mediator. If worse come to worse, get a lawyer with experience in this area.
Posted by: S4S Inc at August 24, 2009 11:09 AM
arbitration is easier, cheaper, and less time-consuming than court, but also more likely to wind up with a "split the baby" result rather than a straight win or lose - i.e., you probably won't have to pay the whole amount, but you'll probably have to pay some. so when you say you don't want to settle for more than you "deserve" to pay, you have to consider the risk of an adverse outcome. grey areas, and the fact that somehow they managed to rack up $45k in change orders you disagree with (presumably, that represents more than just a couple line items, where there were actual labor and materials costs) will count against you.
Posted by: i disagree at August 24, 2009 11:21 AM
Based on stories from friends who have decided to take a hard line against their GCs and ended up in court, you could easily burn tens of thousands in legal fees and spend the next 5 years dealing with this with no guarantee of success.
As much as it sucks, you are probably better off paying up now and settling.
You stated, however, that even your architect doesn't agree that all the changes were unnecessary, so sounds like you need to get some more input as to what the "fair" amount is for the work that's been done. There are always 2 sides to that coin.
Posted by: wyckoff at August 24, 2009 1:57 PM
I think you should get a consultation from an attorney skilled in this area.
The contract itself will be something that that attorney and you should pour over carefully.
Take a proactive approach and seek legal consultation.
Posted by: Madeleine at August 25, 2009 11:06 PM
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