Material cost increases with new construction?

[chargermann]

...Guy's, I have a general question regarding material cost increases with new construction.
I'm having a 40' x 50' outbuilding constructed on my property, and now in dispute with my General Contractor regarding his request for additional fees due to material cost increases within a 15 month period between the Contract signing and actual commencement of work. He claims both concrete and lumber costs significantly increased over this time frame, especially with Hurricane Irma activity through the State. I have yet to confirm any material cost increases with local supply houses.

I was quite surprised when this was presented to me. It appears he's trying to squeeze me, maybe because his profit margin isn't as high as he planned.

Since there is no language within the Contract pertaining to additional fees assessed for this specific issue, he obviously is legally bound to fulfill all services for the agreed price.

I never hired a GC before, therefore, my question is if this request is something common out there, especially with smaller General Contractors?
Thanks.

 

[Bluedodge]

It's taken fifteen months to put up a pole barn?

Are you being serious, or are you trolling?

 

[Thumper68]

We are feeling the effect of the southern storms up here so I imagine that prices are up across the country. Work out a reasonable fee with your GC.

I built my shop in 2006 the cost of materials went up a lot as did shortages of OSB and a few other sheet goods I needed to finish. I was real glad that I had most of what I needed before Katrina.

 

[chargermann]

...no trolling, and certainly no pole barn. It's my detached dream garage/rec room and guest room.
I reside in a community with strict HOA guidelines. This, plus the bureaucratic B.S. in meeting very stringent County and State code compliances (especially water management) delayed the plan approval for seven months.

 

[Sasquatch912]

Trees are being cut daily. Mills are open. Prices may have jumped some, but shouldnt be a lot. Work a deal out with him, but he shouldve already started on the building within that 15 month period

 

[nmk_61802]

Trees are being cut daily. Mills are open. Prices may have jumped some, but shouldnt be a lot. Work a deal out with him, but he shouldve already started on the building within that 15 month period

Obviously you haven't priced materials recently...OSB has doubled in price in the last 4 months and is still climbing.

 

[biggziff]

My costs went up 20-40% on nearly everything since my original estimates in May. The hurricanes are blamed for this, but I think it's just gouging. My truss package alone went from $2300 to $3100 in that time frame. I tried 3 different truss companies and they all said the same thing.

 

[Northislander]

"Canadian Lumber tariffs"? Our politicians did say the only person Trump is hurting is the American House builder or future Garage owner.

 

[jetnow1]

Lumber has gone thru the roof recently, concrete I have not priced recently.
You might be able to hold him to the contract if there is no provision for increases but what kind of job do you think you will get? Most contracts I do
give the person price protection for 30 days, otherwise I would not be able to
price materials. 15 months to expect prices to stay the same is unreasonable.

 

[Angelfire]

What does your contract say? If there are no provisions for cost increases then he's out of luck. That being said, I'd be surprised if the contract didn't have language around the length of the quote.

 

[astroracer]

Take your material list to Home Depot or Lowes and have them quote it for you... Then you'll know if he is yanking you are not. I have a feeling he isn't...
Same thing happened to me in '05 when I was quoting a shop addition. Drug my feet for a month and the materials went up 3K... My bad on that one...
Mark

 

[Toolfool]

I had my lumberyard re-bid a 36 x 36 x12 garage package just this week. Price went up almost $800 from three months ago. And this bid is only good for 15 days. Not every contractor is trying to rip people off.

 

[yeldogt]

After 30 days .. it's moot. Do you really expect labor to eat your delay material costs... reallyY

 

[850xpeps]

If it was your delay then imo it’s gonna be your cost. Wether or not the contract states it. If he was willing to start it isn’t his fault. Go and get a price on materials and compare.

 

[Augus7us]

I opened a thread about material costs around a week ago. When I bought this house around July not long after I started looking at the costs to insulate and sheath the inside.

I didn't buy anything and a couple months went by and I started looking at material costs again. I was shocked to see that just about everything I needed had close to doubled in price. I was told it was due to the hurricanes. I'm in Ohio, there are no hurricanes here or any inclement weather since I started looking.

Could be due to any number of reasons I imagine, but a buddy of mine who owns a construction business told me before the hurricanes landed that prices would go up and sure enough they did.

The good news is, at least in my area, prices have started to fall. In the last three weeks OSB has gone down about 3 dollars a sheet. Still crazy expensive but I'm hoping the downward trend continues.

-Clint

 

[ard]

IMO this thread isnt about 'are materials more expensive'. or 'how much more should it be?'

Its a contract law question.

What does the contract say
What is FL law around this issue



Also, WHO has the upper hand? Have you paid him already for MORE work than he has DONE? or Has he done more work than you have paid?


in the end, before making any decisions or statements/emails, you may want to spend $200 for a legal consult.

You may be "right", and he could be 'legally obligated' to build your garage for $x. But he wont. And then what do you do?

GL

 

[PWC Repair]

Yes, the raw materials have gone way up. Its not his fault it took you 15 months to get ready because of beurocratic b.s. Most materials quotes are only good for 30 days unless otherwise stated. At this point you can either absorb the extra cost of materials or wait it out. I guess about 12-18 months from now they will be back down. As for the concrete, im not sure how rebuilding way down south affects that when its mostly made up locally BUT, I priced some waste base last week at $150 a load! Thats almost double what it was a year ago.

 

[mike93lx]

Take your material list to Home Depot or Lowes and have them quote it for you... Then you'll know if he is yanking you are not. I have a feeling he isn't...
Same thing happened to me in '05 when I was quoting a shop addition. Drug my feet for a month and the materials went up 3K... My bad on that one...
Mark

unless the OP has an itemized quote from the GC or had the materials quoted by Home Depot/Lowes at the contract signing, this is pointless to do.

 

[finn]

All the contracts written by the trades people here have a 30 day time stipulation to protect the writer from material pricing issues. They eat material costs within thirty days, and the customer eats it after that.

 

[MagKarl]

Pay for the materials yourself. Take your plans to several different lumber yards and get bids.

Pay for the labor separately.

You don't want to have the builder cutting corners to cut costs. You won't be happy in the end.

 

[yeldogt]

Pay for the materials yourself. Take your plans to several different lumber yards and get bids.

Pay for the labor separately.

You don't want to have the builder cutting corners to cut costs. You won't be happy in the end.

No good builder is going to work that way

 

[glentre]

With the hurricane damage in Florida, your contractor probably has a multitude of opportunities within the state to get very profitable work. Why would he be content to finish your job at a likely slim margin due to real material price increases that he needs to absorb? With the shortage of labor and a lot of available work, he will also likely (if he hasn't already) need to increase the wages of his men or risk losing them to other contractors who have taken profitable work but need more men to handle it.

You are a victim of the hurricane damage in Florida and you can either fight your contractor and never get the job done or get a crappy job from him if he agrees to even show up. Suggest you meet with him with an understanding frame of mind and try to work out a compromise regarding the increased cost of materials. If your contractor bails on you, your legal costs to enforce the contract plus the delay in finishing the job will not be worth it. Also, if you need to get another contractor to finish the project, who will you get to come in with a price equal to or any lower than what your current contractor wants to finish it? If they are any good, they all have more work than they can handle. Of course, there always seem to be some who will take your job but you will be scraping the bottom of the barrel of competent contractors and you will not be happy with the outcome.

Summary; work with your current guy because the alternatives are not good.

Glen

 

[wssix99]

Lumber is up 12% in the past year and particle board is up 24%. Overall; material costs and building construction costs are up 3.7%, nationally. Ugh.

It's my detached dream garage/rec room and guest room.
I reside in a community with strict HOA guidelines. This, plus the bureaucratic B.S. in meeting very stringent County and State code compliances (especially water management) delayed the plan approval for seven months.

This type of situation lends itself to improving chances of the contractor's margin eroding.

This should be of concern to you because if your contractor doesn't come out with a good deal or (worse) looses money, they are going to make up the gap in other ways through quality or walking off the job early.

Material costs do rise and our economy stays healthy when prices go up gradually over time. If you want to entertain this in a fair way, then you could agree to provide more funding per a construction cost index. You could take 50%, or whatever portion of your contract price you deem to be for "materials" and then multiply that by the index escalation to come to a fair increase:

https://www.rsmeansonline.com/references/unit/refpdf/hci.pdf


The index numbers, above are from ENR, but I don't expect their data will help you out any further than that 3.7% number.

RS Means should have more granular data. I have never seen this publication, but I expect it will have more meaningful data for your problem. (broken down by year and City) This is the 2017 version, so you would probably want to wait until after the holidays to get the 2018 version and then agree to sit down with your contractor then to figure out the bump:

https://www.rsmeans.com/products/bo...s/2017-construction-cost-indexes-january.aspx

 

[6768rogues]

Who caused construction to wait for 15 months? If he put you off for 15 months, he should **** it up and honor the contract or you can negotiate something acceptable to both of you. Remember that putting him in the position of having to honor a contract that will put him out of business is not going to get you a decent result. If you put him off for 15 months, he is facing changed market conditions and has a basis for raising prices. All that will be considered if it goes to court. How badly do you want him to build your building? Are you willing to spend more than the price increase to take him to court, to force him to build you a building that might bankrupt him and leave you with an incomplete or substandard job? Is having him agree to abandon the contract going to let you go to another contractor to get the job done for the original price, or is everyone charging his new price?
Do whatever you think is right to get a quality job on your building. All he has to do is bankrupt his business and reorganize under a different name, starting up again tomorrow.

 

[MagKarl]

No good builder is going to work that way

You are misinformed.

Smart builders do this all the time, match the best labor with the best material package.

No reason you have to settle for either one.

 

[GTO]

Material estimates should be good for about a week,that's what my yard is doing.
And to the poster above,who stated the OP go to Lowes or HD for a estimate...not advisable.Unless you know they are comparing apples to apples.

 

[GirchyGirchy]

IMO this thread isnt about 'are materials more expensive'. or 'how much more should it be?'

Its a contract law question.

What does the contract say
What is FL law around this issue

IMO, It shouldn't matter what the contract says. The builder should have inserted something into the contract to cover himself but, if not, does the OP expect him to work for free or for a drastically reduced profit margin?

 

[ssdave]

Sit down with your builder, and work out a reasonable increase. You absolutely cannot expect him to hold a material price for 15 months, especially if a lot of the delay was on your part getting approval to build.

Prices have changed considerably in those 15 months, as many have said above.

If you want to try to hold to strict contract language, I doubt there's essentially any court that would consider a 15 month delay in construction start reasonable, and would hold that the contractor has to execute without a price adjustment.

 

[glentre]

For those suggesting Lowes or Home Depot as a source of quality building lumber, that would be a starting point for a poorly constructed building. Every time I go to these places for a small project, I need to pick through the stacks of 2x4, 2x6 etc lumber to get enough straight or undamaged ones for my job. A contractor building a garage or house certainly is not going to take the time to pick through lumber; he is going to let the store deliver whatever they can easily load on the truck and get all the **** along with some good pieces.

You may pay a little more for stock from a commercial lumber yard but will be glad you did when the project is completed.

Glen

 

[Denwood]

"Canadian Lumber tariffs"? Our politicians did say the only person Trump is hurting is the American House builder or future Garage owner.

The increase in US housing material costs associated with Trump’s free trade policy changes was estimated at $1300 to $3600 per home. This increase had little to do with hurricanes at the time, so likely costs will increase well beyond those projections ... as observed in this thread.

US lumber stocks are likely a good investment right now, unfortunately at the expense of folks looking to build.

 

[Firebrick43]

The increase in US housing material costs associated with Trump’s free trade policy changes was estimated at $1300 to $3600 per home. This increase had little to do with hurricanes at the time, so likely costs will increase well beyond those projections ... as observed in this thread.

US lumber stocks are likely a good investment right now, unfortunately at the expense of folks looking to build.

Keep politics in free parking!

 

[Denwood]

Sorry..just pointing out that there are several factors out there increasing construction costs. A few of these are not supply demand driven, so costs will remain higher.

 

[K13]

Keep politics in free parking!

It's not politics it's economics. With our weak dollar and free trade you were able to buy lumber from Canada cheap which forced U.S. producers to match pricing. Add a tariff and the U.S. producers no longer have the same pressures to keep prices low so they increase them. It is doing exactly what it is suppose to do increase profits for U.S. Companies. Pretty simple.

 

[Firebrick43]

With two hurricanes which have historically raised material prices, that economics. Naming and blaming the president is purely speculation and politics.

 

[K13]

With two hurricanes which have historically raised material prices, that economics. Naming and blaming the president is purely speculation and politics.

The idea behind tariffs are so local producers can make more money period. It's working. If that is a problem then you can call it blaming the president no one other than you said that.

 

[Firebrick43]

The idea behind tariffs are so local producers can make more money period. It's working. If that is a problem then you can call it blaming the president no one other than you said that.

Maybe you should read post 30

Definition of blame

1. assign responsibility for a fault or wrong.

So in a thread about material price increases someone mentions a policy and who enacted it as a reason for price increases.

One doesn't have to actually use the word blame to infer it. It's called reading comprehension.

 

[AZ Pete]

It's not politics it's economics. With our weak dollar and free trade you were able to buy lumber from Canada cheap which forced U.S. producers to match pricing. Add a tariff and the U.S. producers no longer have the same pressures to keep prices low so they increase them. It is doing exactly what it is suppose to do increase profits for U.S. Companies. Pretty simple.

I think you meant weak Canadian dollar. Current exchange is 1.24 Canadian to 1 US.. Oops I see you are in Canada... my bad


Sent from my iPad using Tapatalk

 

[Toomanytools?]

...Guy's, I have a general question regarding material cost increases with new construction.
I'm having a 40' x 50' outbuilding constructed on my property, and now in dispute with my General Contractor regarding his request for additional fees due to material cost increases within a 15 month period between the Contract signing and actual commencement of work. He claims both concrete and lumber costs significantly increased over this time frame, especially with Hurricane Irma activity through the State. I have yet to confirm any material cost increases with local supply houses.

I was quite surprised when this was presented to me. It appears he's trying to squeeze me, maybe because his profit margin isn't as high as he planned.

Since there is no language within the Contract pertaining to additional fees assessed for this specific issue, he obviously is legally bound to fulfill all services for the agreed price.

I never hired a GC before, therefore, my question is if this request is something common out there, especially with smaller General Contractors?
Thanks.

This isn't so much a topic on material increase as it is "Contract Law" as someone else has stated. I can't believe your Contractor doesn't have a "Quote Good For 30 Days" line in his contract.

I also can't get that you are "quite surprised" seriously after 15 months, One year and 90 days you expect prices to be the same and jump to " He's trying to squeeze me".
If you went and looked at a new car in January 2017 and the dealer gave you the price then went back 15 months later looking at the now 2018 model would you expect it to cost the same?
"Is this request common, especially with smaller contractors?" I would have to say yes if prices have gone up and if they have a "Good for 30 days" clause in the contract. Being 15 months out I would think he would give you a whole new bid, hell his labor costs should have gone up.
Have you given any money down in that 15 month time period?
What is your relation with this contractor, meaning he has good references you get along with him , you have seen his work?

I would sit down and go over the new increases in that time period yes concrete has gone up lumber prices goes up and down. If it's someone you can work with meet him halfway or something, don't automatically think he's trying to get you.

 

[K13]

Maybe you should read post 30

Definition of blame

1. assign responsibility for a fault or wrong.

So in a thread about material price increases someone mentions a policy and who enacted it as a reason for price increases.

One doesn't have to actually use the word blame to infer it. It's called reading comprehension.

So it's blaming to point out that Trump did exactly what he said he was going to do and it had exactly the results he said it would produce? Someone comprehension is lacking but it certainly isn't mine. You not liking the results is not the same as someone placing blame.

 

[larry4406]

Good luck, read your contract.

In the houses my company build, we buy lumber direct. It is what it is and has escalated quite a bit due the mentioned storms. Our plumber is now billing extra because PVC and cpvc pricing has shot up as well.

The company unfortunately takes it in the shorts as the purchase contract does not pass thru escalation costs.