OT: In need of a Construction Law Attorney

[Cockish]

My wife and I are building a home and not only has the contractor passed his contract completion deadline of last June but is now asking for an additional $12,000+ over his total contract amount to complete our house.

We have already had to fire our first contractor for breach of contract and now this problem with our new one. Any good construction lawyers in the Lexington or Columbia area we can talk to? Thanks!

 

[mirbird]

Damn funny place to look for an an attorney. Todd E?

 

[Cockish]

Damn funny place to look for an an attorney. Todd E?

Only serious responses are requested. You must be new to this forum.

 

[4ever2thee]

You can’t hire an attorney for a $12,000 dispute.

 

[2013 SS]

You can’t hire an attorney for a $12,000 dispute.

This!
You're already on your second contractor. Had to fire the first? Maybe #2 ran in to problems left by #1. I'd take the money you're going to pay a lawyer and hire a licensed GC to go over the changes and maybe do a couple of inspections. You're in it now man, may as well just get to the finish line.

 

[tjdisbrow]

NO builder guarantees completion/closing date. Was the builder building at cost plus? Did you do any changes?

P.S. most builders know each other. You fire one, ok. You fire two? And good luck moving forward...

 

[uscnoklahoma2]

I do criminal defense and not civil litigation but the above posters are correct. You'll spend at least 10,000 fighting this and more than likely twice that much unless you just get lucky and find an attorney on the cheap or in need of money lol

 

[bucketdad]

Careful about hiring a third GC and delaying the construction process even further. If you took out a construction loan, it's not uncommon to get a three month extension at little to no cost. You go beyond that and you're asking for trouble. At that point, the bank gets the upper hand and they know it. They'll give you that extra extension but you'll more than likely have to re-qualify when the construction loan transfers over to a traditional mortgage... putting yourself at risk and more than likely a higher interest rate, costing you way more than what you're over budget.

 

[december2209]

Hire a hit man 5 thow and be done with it ..that way it’s cheap and quick..

 

[titaniumspur]

A few questions first. Did you change the scope of the project ? The word contractor implies a contract exists, is there a signed contract ?

 

[sgacock]

I am a construction lawyer but I am not licensed in SC. But, there are a general principles that I'll discuss with the caveat that you should consult a licensed SC attorney.

TIME: unless your contract has the words "time is of the essence" you can forget trying to hold the contractor responsible for the overruns.

PRICE: you can hold him to the price UNLESS the
ExtrA price is due to change orders. That's probably the biggest area of dispute in construction law

QUESTION: who drew up the contract. A good construction contract usually states that change orders have to be agreed on in writing but if not, the contractor is entitled to cost + 15%.

You could have paid $3,000.00 to have a lawyer draw up a good construction contract on the front end. It's much more on the backend. A home is Joe America's biggest investment. Nevertheles, people sign contracts drawn up in favor of contractors or such crap courts can't understand what happened.


Contact a lawyer in SC. They will read the contract and advise you for a grand. They may tell you shut up and pay or threaten a breach action if the contractor is not fulfilling his obligations

 

[Cockish]

I am a construction lawyer but I am not licensed in SC. But, there are a general principles that I'll discuss with the caveat that you should consult a licensed SC attorney.

TIME: unless your contract has the words "time is of the essence" you can forget trying to hold the contractor responsible for the overruns.

PRICE: you can hold him to the price UNLESS the
ExtrA price is due to change orders. That's probably the biggest area of dispute in construction law

QUESTION: who drew up the contract. A good construction contract usually states that change orders have to be agreed on in writing but if not, the contractor is entitled to cost + 15%.

You could have paid $3,000.00 to have a lawyer draw up a good construction contract on the front end. It's much more on the backend. A home is Joe America's biggest investment. Nevertheles, people sign contracts drawn up in favor of contractors or such crap courts can't understand what happened.


Contact a lawyer in SC. They will read the contract and advise you for a grand. They may tell you shut up and pay or threaten a breach action if the contractor is not fulfilling his obligations

Thanks for the reply...contract says completion within 4 mos of start date (contractor's deadline was 6/26/18)...no change orders done...contractor drew up contract and my former construction law attorney said it was a basic contract that provided me protection...Contractor also put in writing via email last July that he would honor his contract price but he keeps blaming his labor charges are under-bidded so he keeps raising his prices after a draw is made...my problem is money...i am at my maximum debt to income ratio and the home will not appraise any higher...I dont have the extra $12,000+ to finish this house.

 

[mirbird]

Cut out some scope of work.....

 

[uscnoklahoma2]

Thanks for the reply...contract says completion within 4 mos of start date (contractor's deadline was 6/26/18)...no change orders done...contractor drew up contract and my former construction law attorney said it was a basic contract that provided me protection...Contractor also put in writing via email last July that he would honor his contract price but he keeps blaming his labor charges are under-bidded so he keeps raising his prices after a draw is made...my problem is money...i am at my maximum debt to income ratio and the home will not appraise any higher...I dont have the extra $12,000+ to finish this house.

Why would you not go back to your construction attorney????

 

[sgacock]

Thanks for the reply...contract says completion within 4 mos of start date (contractor's deadline was 6/26/18)...no change orders done...contractor drew up contract and my former construction law attorney said it was a basic contract that provided me protection...Contractor also put in writing via email last July that he would honor his contract price but he keeps blaming his labor charges are under-bidded so he keeps raising his prices after a draw is made...my problem is money...i am at my maximum debt to income ratio and the home will not appraise any higher...I dont have the extra $12,000+ to finish this house.

I do not practice in SC. However, a mere statement of four months is not enough in most states. It must say that " time is of the essence" at a bar minimum. It really should go on and state that you will suffer damages as a result of delay and specify what damages you could suffer. I doubt you have a case on that issue, but AGAIN, I practice in Georgia and Forida - not SC

Time of performance is not generally considered a neccessary element of a contract. Price is.

He can't change the price of the contract ( unless he is doing cost plus). He should have to eat increased labor costs. Of course, i haven't read the contract. You need to go back to the attorney who said it protects you. However, be aware that you and spouse may have chosen light fixtures, flooring, countertops etc etc that went over the allowances stated in the contract or contract addenda. I see that all the time.

Good luck.

 

[Triton20x]

I'm a contractor. First, almost no contractor states a completion date unless it's like 6mos longer than he thinks it will take. He may suggest ideal time frames but this was a ridiculously wet summer and I am behind on most of my projections. Second, lumber costs hit an all time high by almost two-fold in July. I have projects way over budget due to cost. Third, labor has shot through the roof due to labor demand. A mother-in-law suite and garage I quoted at $130k in Feb didn't start until June due to engineering and homeowner making changes. Then homeowner changed design again in June which required new truss design. That said we are up to about $168k due to lag in process, owners changes, and additional work. I am getting ready to have another conversation because he has delayed another step in completion because he is now adding generators which delays job but then he keeps spouting completion without realizing the repercussions of minor change.

Contractors get a bad rap because owners hear a date, but if you change ceiling from flat to architect, then that stops production of trusses and resets as a new start which could delay 5 or 9wks like it did with me.

That said, you are on contractor #2, you are having problems with each. Contractors really do want to make you happy and finish the job, they lose money on all delays. I'm guessing you are nitpicking something that is normally acceptable. Are the county inspectors accepting work that you are not?

There is a chance you got two bad eggs in a row, of course there is! There are some bad ones but usually building a house these contractors have history, hopefully not the cheapest?

If none of the above is true except the two bad eggs. Fastest, cheapest scenario is to contact the SC Arbitration and ask for immediate assistance. They will hear your case and the opposing. Once you elect this route if they find in your favor the contractor has limited time to conclude. But if you are the factor then the contractor has a case and he will win. But if you don't agree with Arbitration then you can sue.

I haven't heard anything except delays as an issue, those rest on client and weather much more than clients are willing to accept most the time. Good luck!

 

[Cockish]

Why would you not go back to your construction attorney????

He recommended this builder since I was in a bind and he said he didn't want to take sides.

 

[Cockish]

I'm a contractor. First, almost no contractor states a completion date unless it's like 6mos longer than he thinks it will take. He may suggest ideal time frames but this was a ridiculously wet summer and I am behind on most of my projections. Second, lumber costs hit an all time high by almost two-fold in July. I have projects way over budget due to cost. Third, labor has shot through the roof due to labor demand. A mother-in-law suite and garage I quoted at $130k in Feb didn't start until June due to engineering and homeowner making changes. Then homeowner changed design again in June which required new truss design. That said we are up to about $168k due to lag in process, owners changes, and additional work. I am getting ready to have another conversation because he has delayed another step in completion because he is now adding generators which delays job but then he keeps spouting completion without realizing the repercussions of minor change.

Contractors get a bad rap because owners here a date, but if you change ceiling from flat to architect, then that stops production of trusses and resets as a new start which could delay 5 or 9wks like it did with me.

That said, you are on contractor #2, you are having problems with each. Contractors really do want to make you happy and finish the job, they lose money on all delays. I'm guessing you are nitpicking something that is normally acceptable. Are the county inspectors accepting work that you are not?

There is a chance you got two bad eggs in a row, of course there is! There are some bad ones but usually building a house these contractors have history, hopefully not the cheapest?

If none of the above is true except the two bad eggs. Fastest, cheapest scenario is to contact the SC Arbitration and ask for immecimme assistance. They will here your case and the opposing. Once you elect this route if they find in your favor the contractor has limited time to conclude. But if you are the factor then the contractor has a case and he will win. But if you don't agree with Arbitration then you can sue.

I haven't heard anything except delays as an issue, those rest on client and weather much more than clients are willing to accept most the time. Good luck!

Appreciate the reply...I've made no changes to house specs given to him and all work needing done so far has been indoors under a completed roof since last spring. My biggest headache is the builder keeps saying he under bids his labor and everytime he gets a draw, he needs more because he needs to make up for labor charges. Because he keeps changing his costs to complete remaining tasks everytime he needs a draw, I now only have enough funds to complete concrete and utilities and I won't have any money for vinyl siding, sheetrocking garage, screened in porch, door knobs, etc. I know I'm only talking about $12,000+ over budget so far, but when I've drawn two bad eggs and cannot qualify for any additional monies with the bank, I feel pretty helpless and hopeless.

 

[Cockish]

I do not practice in SC. However, a mere statement of four months is not enough in most states. It must say that " time is of the essence" at a bar minimum. It really should go on and state that you will suffer damages as a result of delay and specify what damages you could suffer. I doubt you have a case on that issue, but AGAIN, I practice in Georgia and Forida - not SC

Time of performance is not generally considered a neccessary element of a contract. Price is.

He can't change the price of the contract ( unless he is doing cost plus). He should have to eat increased labor costs. Of course, i haven't read the contract. You need to go back to the attorney who said it protects you. However, be aware that you and spouse may have chosen light fixtures, flooring, countertops etc etc that went over the allowances stated in the contract or contract addenda. I see that all the time.

Good luck.

I was mistaken, my final contract doesn't have the 4 mos completion time but earlier drafts did...oh well...but I have actually come under his allowances and have allowed him to keep the credit to help him with labor yet he has consistently underestimated his labor and materials costs so each time there is a draw, he comes back asking for more in the next draw to cover what he thought he could complete in the previous draw. So there is the vicious cycle with the builder of constantly busting his contract line item costs on projects to be completed. Just today, he quoted me $5000 for concrete and when I asked if that total included everything he came back and said he forgot to include the concrete molds and labor to make molds so the price went up to $6,500. That right there is one of several examples over time that has now caused me to bust my remaining budget that was approved in the beginning based on his contract amount. I am at a loss since I wont qualify for anymore funds with the bank because of my debt to income ratio against appraised value of home.

 

[Triton20x]

Appreciate the reply...I've made no changes to house specs given to him and all work needing done so far has been indoors under a completed roof since last spring. My biggest headache is the builder keeps saying he under bids his labor and everytime he gets a draw, he needs more because he needs to make up for labor charges. Because he keeps changing his costs to complete remaining tasks everytime he needs a draw, I now only have enough funds to complete concrete and utilities and I won't have any money for vinyl siding, sheetrocking garage, screened in porch, door knobs, etc. I know I'm only talking about $12,000+ over budget so far, but when I've drawn two bad eggs and cannot qualify for any additional monies with the bank, I feel pretty helpless and hopeless.

Hey Cockish, are you building out in the country or are you near town/city where contractors are located? Just curious about difficulty of crews arriving on job site. What you explained is not normal contracting practice unless this guy is trying to take advantage of you! Most the time bank draws are regulated by the bank to help owners from getting over extended. The contracting business is very difficult right now because lumber and labor have gone crazy since January. I'm in Charleston area, all these new manufacturers coming into the area and expansions of Volvo, Boeing, Mercedes, Shimano, Google, etc, good crews are in high demand and they are almost just naming their prices unless you have some history with your crews.

I don't know if you are in this area but I would be happy to to look at your project to give some input. But if your guy tells you sheetrock is $3800 then that is what you should pay unless there were changes. Don't give them money in advance and don't pay more than 75% until that part is completed. It sounds like there might be some things you can do yourself where you wouldn't have to pay labor that could help turn this in your favor. You might have to just go really cheap on last few items so you can get Certificate of Completion where you can move in, and you can upgrade them over next few years as your funds become available. If you have a construction loan most banks would have a little flexibility for cost overruns especially if the project has taken way longer than normal.

If you feel you have been taken advantage of definitely look into making a formal complaint to SC Arbitration or you can at least use that as leverage with your contractor. Getting an attorney involved would typically not do anything but increase your expense as they are a business and look for ways to drive expenses as well.

Good luck!

 

[titaniumspur]

I am a construction lawyer but I am not licensed in SC. But, there are a general principles that I'll discuss with the caveat that you should consult a licensed SC attorney.

TIME: unless your contract has the words "time is of the essence" you can forget trying to hold the contractor responsible for the overruns.

PRICE: you can hold him to the price UNLESS the
ExtrA price is due to change orders. That's probably the biggest area of dispute in construction law

QUESTION: who drew up the contract. A good construction contract usually states that change orders have to be agreed on in writing but if not, the contractor is entitled to cost + 15%.

You could have paid $3,000.00 to have a lawyer draw up a good construction contract on the front end. It's much more on the backend. A home is Joe America's biggest investment. Nevertheles, people sign contracts drawn up in favor of contractors or such crap courts can't understand what happened.


Contact a lawyer in SC. They will read the contract and advise you for a grand. They may tell you shut up and pay or threaten a breach action if the contractor is not fulfilling his obligations

I am a construction project manager. The best advice I have seen here so far is to pay an attorney to review the contract. Don't ask your original attorney to do this. He has an obvious conflict of interest with your contractor. The words you want to see in the contract are "liquidated damages" but it is highly unlikely they are in there.

 

[stevestrat2]

I was mistaken, my final contract doesn't have the 4 mos completion time but earlier drafts did...oh well...but I have actually come under his allowances and have allowed him to keep the credit to help him with labor yet he has consistently underestimated his labor and materials costs so each time there is a draw, he comes back asking for more in the next draw to cover what he thought he could complete in the previous draw. So there is the vicious cycle with the builder of constantly busting his contract line item costs on projects to be completed. Just today, he quoted me $5000 for concrete and when I asked if that total included everything he came back and said he forgot to include the concrete molds and labor to make molds so the price went up to $6,500. That right there is one of several examples over time that has now caused me to bust my remaining budget that was approved in the beginning based on his contract amount. I am at a loss since I wont qualify for anymore funds with the bank because of my debt to income ratio against appraised value of home.

A few thoughts on obtaining the additional funds you need given the debt ratio situation. Would it be possible for you to get a loan that consolidates some debts and gives you cash out? The hope being by consolidating some open debt, your monthly outgo decreases and debt ratio stays OK. But the additional cash out could blow that unless you can get a long enough loan term to keep that payment down. If you have a vehicle paid for with enough value, maybe you could borrow on that (at a credit union) for the cash needed plus payoff 1 or 2 things that would keep debt ratio in line. My second thought is- if you are fortunate enough to have family that can help you out, then ask. They will still love you! Or maybe some from family & some by above technique. Third- would the lending institution be willing to make any concessions in their policy? They arent interested in being on the hook for an incomplete house I'm sure. Lay it out nice and clear, and maybe they can come up with a solution.

 

[uscnoklahoma2]

Sounds like he taking advantage of you from your side of things. I might can look around for a reputable attorney.

 

[paladin181]

Sounds like contractors shouldn't underbid their labor. We see it all the time, guys bidding a job, intentionally leaving things out and coming back later with change orders for base portions of a system that "weren't accounted for but are completely necessary to complete the project." Some contractors are just garbage. Others have trouble being competitive with honest quotes. It's a hard line of work, for sure.

 

[Silverspur02]

Appreciate the reply...I've made no changes to house specs given to him and all work needing done so far has been indoors under a completed roof since last spring. My biggest headache is the builder keeps saying he under bids his labor and everytime he gets a draw, he needs more because he needs to make up for labor charges. Because he keeps changing his costs to complete remaining tasks everytime he needs a draw, I now only have enough funds to complete concrete and utilities and I won't have any money for vinyl siding, sheetrocking garage, screened in porch, door knobs, etc. I know I'm only talking about $12,000+ over budget so far, but when I've drawn two bad eggs and cannot qualify for any additional monies with the bank, I feel pretty helpless and hopeless.

Sheetrocking the garage and screened in porch are fluff that can be done later. Decide what you can live without at the present time and have that contractor finish the important stuff to get your certificate of occupancy and cut your builder loose. When construction costs go back down, then find somebody to finish the things that you want on your schedule.

 

[bucketdad]

Sheetrocking the garage and screened in porch are fluff that can be done later. Decide what you can live without at the present time and have that contractor finish the important stuff to get your certificate of occupancy and cut your builder loose. When construction costs go back down, then find somebody to finish the things that you want on your schedule.

^^^This is sound advise. He could even talk to the inspector and get a better idea of what can be considered unfinished and still get a certificate of occupancy. You can also do things like having the entire interior sprayed white to save time and money while getting you in quicker and paint the rooms the color you want after you're in. It may be time to throw perfection out the window, stay basic and make getting in your priority.

 

[mavcock]

I am a construction lawyer but I am not licensed in SC. But, there are a general principles that I'll discuss with the caveat that you should consult a licensed SC attorney.

TIME: unless your contract has the words "time is of the essence" you can forget trying to hold the contractor responsible for the overruns.

PRICE: you can hold him to the price UNLESS the
ExtrA price is due to change orders. That's probably the biggest area of dispute in construction law

QUESTION: who drew up the contract. A good construction contract usually states that change orders have to be agreed on in writing but if not, the contractor is entitled to cost + 15%.

You could have paid $3,000.00 to have a lawyer draw up a good construction contract on the front end. It's much more on the backend. A home is Joe America's biggest investment. Nevertheles, people sign contracts drawn up in favor of contractors or such crap courts can't understand what happened.


Contact a lawyer in SC. They will read the contract and advise you for a grand. They may tell you shut up and pay or threaten a breach action if the contractor is not fulfilling his obligations

Lawyer here. This is the best legal advice I have seen in a while on this board. And it was free.

 

[Triton20x]

Sheetrocking the garage and screened in porch are fluff that can be done later. Decide what you can live without at the present time and have that contractor finish the important stuff to get your certificate of occupancy and cut your builder loose. When construction costs go back down, then find somebody to finish the things that you want on your schedule.

If the garage is attached to living space then it will have to be sheetrocked to meet fire rating requirements. But you do not have to have it finished or painted, also you could skip insulating to garage.

The screen porch does not have to be screened and the ceiling does not have to be completed. Little things that you can do yourself or can delay but still get your C.O.

Go with linoleum in the kitchen and bathrooms and cheap carpet in other living space. You can upgrade those one room at a time.

Lastly, all remaining projects, get the cost quote in writing. End of the day the sooner you can get into your home the sooner you stop paying rent or other living expenses for two households and this will help your bottomline. I understand this maybe your dreamhome but nothing I suggested above reduces the structure and is only cosmetic which are the easiest to correct.

 

[sgacock]

I am a construction project manager. The best advice I have seen here so far is to pay an attorney to review the contract. Don't ask your original attorney to do this. He has an obvious conflict of interest with your contractor. The words you want to see in the contract are "liquidated damages" but it is highly unlikely they are in there.

He would not have a conflict of interests

 

[titaniumspur]

He would not have a conflict of interests

Normally he would not, but see post #17.

 

[Cockish]

Hey Cockish, are you building out in the country or are you near town/city where contractors are located? Just curious about difficulty of crews arriving on job site. What you explained is not normal contracting practice unless this guy is trying to take advantage of you! Most the time bank draws are regulated by the bank to help owners from getting over extended. The contracting business is very difficult right now because lumber and labor have gone crazy since January. I'm in Charleston area, all these new manufacturers coming into the area and expansions of Volvo, Boeing, Mercedes, Shimano, Google, etc, good crews are in high demand and they are almost just naming their prices unless you have some history with your crews.

I don't know if you are in this area but I would be happy to to look at your project to give some input. But if your guy tells you sheetrock is $3800 then that is what you should pay unless there were changes. Don't give them money in advance and don't pay more than 75% until that part is completed. It sounds like there might be some things you can do yourself where you wouldn't have to pay labor that could help turn this in your favor. You might have to just go really cheap on last few items so you can get Certificate of Completion where you can move in, and you can upgrade them over next few years as your funds become available. If you have a construction loan most banks would have a little flexibility for cost overruns especially if the project has taken way longer than normal.

If you feel you have been taken advantage of definitely look into making a formal complaint to SC Arbitration or you can at least use that as leverage with your contractor. Getting an attorney involved would typically not do anything but increase your expense as they are a business and look for ways to drive expenses as well.

Good luck!

Hey Triton, I really appreciate the offer. My home is in the town of Lexington. I would be happy to meet you if not out of your way.

 

[Cockish]

Sheetrocking the garage and screened in porch are fluff that can be done later. Decide what you can live without at the present time and have that contractor finish the important stuff to get your certificate of occupancy and cut your builder loose. When construction costs go back down, then find somebody to finish the things that you want on your schedule.

I am in communication with the town Inspector about what is necessary to obtain a CO...thanks for mentioning that