contractor problems--legal advice?

[bob-e]

First let me say thanks to wealth of information you guys have posted to this site. I've been so busy reading the forum, I haven't had any time to post!

So, I contracted a 30x32 pole barn. Simple right? Well the contractor wanted 3 installments. One up front, one after the pad was done and on after final inspection. We signed a contract, but dumb me, didn't include due dates. So first check is cut 8/11. He starts my pad on 11/1 and finishes it on 12/9. I cut another check. He has most of the framing and trusses up TODAY. During this time, I heard every excuse in the book. Well, I finally get the phone call tonight. "Man, if you could help me out with $3k, I can buy your metal and I'll sign a new contract that says completion date in 2 weeks max. I would blow through the roof if I had one. I just said come over tomorrow and we'll talk.

Now what scares me is that I work as sort of a glorified bankruptcy attorney (no law degree) for a high profile client to which a lot of people owe money. I see this kind of thing all the time. If this guy files for bk, basically I am screwed. Will never get paid ever. If he doesn't file and I can actually sue him successfully, I still will probably not get paid anytime soon. Ack!

So while I'm mulling it over I came up with what may be a good solution. I tell him to sign a new contract and I cut a check to the metal company direct and at least then I'll have something if he decides to flake again. It's either that or tell him flat no, start my lawsuit and hire a new contractor.

The only thing that has me holding on to hope is that this guy has worked in my small town for 20 years+ and could have run off a long time ago when I cut the second check and the work he has done so far has been satisfactory albeit slow as molasses.

Any advice here? Any contract tips? If anyone needs any bankruptcy advice I will be glad to help as I know quite a bit about that and nothing about garages and construction (I'm learning more everyday though, thanks to you guys)

Thanks all,
Bob

 

[Viriiguy]

Given the amount of trouble it is going to be to try to recoup anything.. I would go with your plan of paying for the metal direct and paying him when he finishes in two weeks.

 

[itsspeeds]

I would wait on taking legal action and do what you said. You buy the material and he finishes the project with a new written contract. When he's done and you looked over everything and not a second before, pay him the rest. I'm a contractor and don't necessarily like finishing other guys work.(my own opinion) Even though it still pays. If you do decide to do go the legal way I would try to find a contractor to finish before you move ahead or you just might be waitin a long time till it is complete. Good Luck!!!!

 

[6768rogues]

I would ask for proof that everything, including labor and materials, used so far are paid for. He could be stringing along suppliers by giving them partial payments to keep supplying materials. You could have a lien slapped on your property later by a supplier or workers. If and when he supplies proof of that, I would pay the metal company directly and stay home during installation to make sure they do not load up your metal and head down the road. He has given off some bad vibes, and you need to do what you can to protect yourself. DON'T hand him any more money unless the job is done.
If he does not play ball with you, my advice is to send him a certified letter stating that he has 10 days to resume work and that if it is not resumed in 10 days you intend to pursue his breaching the contract.

 

[regguy1]

Some good suggestions above. I fhe's beggging for money he has problems.....
Don't give up any more money, and make sure he's paid the suppliers

 

[tdkkart]

Well, at this point you can legal-smegal all you want but if he's in deep you'll never get anything more than what you have on sight.

Get together with him. First, clear up where you are today, what has been paid for, what is completed, labor and materials, as of today. Lay that out first, get it settled and signed for.

Write up a new contract outlining what will happen from this day forward. All material will be paid for when delivered, not before. All labor will be paid on a schedule determined by the 2 of you, but not to be paid in advance, and ideally not paid til the project is complete.

He may be in a rough patch right now, you decide how you want to deal with it.

 

[Zengineer]

Tell him he sets up the order with the metal company, and you deal with them direct. You buy the metal you need to finish. Then he can sign a NEW contract to continue the work. Use a standard builders contract. (not sure what options you have in the US for those, but we have some good ones up here)

 

[wssix99]

I'm not a lawyer but have studied contracting law and I stayed in a Holiday Inn Express last night...

In a nutshell, there is no legal suit here where you will end up ahead. The fact that he is asking you for cash means that he's bankrupt on paper and can't get a loan. You can't win money from people who don't have any and a lawsuit will just help other people by putting the guy out of business faster. You can still threaten a lawsuit and file small claims court papers as a threat, (this has worked for me before) but you shouldn't expect that you have anything to "win." Is more of a situation where your contractor has more to loose.

If the contractor has a bond for your project (probably not) you can call the bonding company. If not, your only two options are to nurse this guy along or hire another contractor.

Giving this guy a check for the metal was just like giving a crack addict a roll of 100's. It will just help him shuffle what little money he has around on other projects. With more money to shuffle around, he'll spend more time on other projects (not yours) and you'll just end up suffering more.


At the point you are diverging from the terms in the contract, you should definitely draft a new one with new terms. Before you do that, you should have a negotiation. Besides the money - you want something more here, which is timely work. You can ask him what he needs in order to complete the work and indicate your willingness to help, but you should tell him that you expect your project to be the top priority and meet performance targets in return.

I'd suggest doing the following:
- If you are going to stick with this guy and not walk away from your deposit, you'll have to get more involved in the details. He's already proven that he can't manage your job with his other batch of work.
- Separate payments for material and labor so you can more easily track these items. Then, don't give him a dime for labor until he's worked off the surplus cash you have given him as a deposit. If he can't get a loan to cover his material costs, then you can pay the material bills directly to the suppliers.
- If the contractor doesn't trust that you will pay him, you can put the rest of the contract money in an escrow account with a third party. (A bank or mortgage company.) You'll pay more for the service, but it will be much less than if this guy takes you for a ride.
- Have a licensed lawyer draft up or review the next version of the contract.

 

[bluesman2a]

I agree with much of what has already been said...
Not another DIME of labor $'s until it's finished (that's in the original contract, and it's fair too).

If he needs materials, YOU buy them and have them on site.

BE CAREFUL here!!! I had to do this with one builder and once the building supply had my CC#, the builder kept charging OTHER stuff to my account. Pay the suppliers COD and get receipts to prove payments.

One other addition. If you have him re-sign ANYthing it should also include a Lien-Waiver form. This is a legal document saying you paid him X-dollars for Y-scope of work. It also says that you paid HIM and he is responsible for paying subs/material suppliers. He initials each payment as well saying he got it. At the end he signs that the project is complete and he is paid in full and there shall be no grounds for a lien from any supplier.

 

[Hobbit]

Do your homework on the guy and his company. Check probate for recorded liens, tax or otherwise & judgements. This will give you an idea if he has a past history of this behavior and if he has taken care of them you will see releases recorded. You might feel a little better about the guy if this is so, or you might find out he currently has everbody on his tail.

 

[nehog]

I suppose since you asked for legal advice, I'll drop this in to the mix: you really need to see a lawyer (and not get more advice on an Internet web forum) as you have way too many problems. The contract was/is probably invalid anyway (because there was no meeting of the minds, the lack of dates shows this.) Make an appointment with your personal/family lawyer, show what you have and what the problems are, and he/she will advise you what can be done to remedy the problem(s).

 

[bob-e]

Thanks for the input all. I ended up having a sit-down and came up with a new contract. I will be writing a check the the metal dealer direct and dealing with that myself. The new contract includes dates and a background of all the bs that's happened thus far. I state that if he does not finish the job by end of next week, I will get 2 estimates to finish and he will be liable for the balance. We agreed that there are no supplier liens (not surprised by the lack of credit). That's the best I could come up with to mitigate the hole I'm in. I figure I could get the job completed by another GC for no more than 10K and after the 2k I spend for metal I will have owed my old GC $5k. Well within small claims if it comes down to it. Not that I think I can bleed this turnip if it does happen, but I will try. Hiring an attorney should have happened up front, but now that I'm only out $5k under the worst scenario, it's not worth my time and money. I really think he will come through, but am definitely crossing my fingers and rubbing my rabbits foot.

 

[volvo]

...
See you in two weeks, with completed job pics and a smiley face ...

 

[bob-e]

...
See you in two weeks, with completed job pics and a smiley face ...

Man I hope you are right. I have my lift I bought taking up my attached one car garage, 1 race car in the yard, one in the driveway and one car in a trailer. Looks like bob-e's used cars out here!

 

[Frank The Plumber]

You should have gotten material waivers from his sources. You may get double dogged.

 

[Zeke]

Thanks for the input all. I ended up having a sit-down and came up with a new contract. I will be writing a check the the metal dealer direct and dealing with that myself. The new contract includes dates and a background of all the bs that's happened thus far. I state that if he does not finish the job by end of next week, I will get 2 estimates to finish and he will be liable for the balance. We agreed that there are no supplier liens (not surprised by the lack of credit). That's the best I could come up with to mitigate the hole I'm in. I figure I could get the job completed by another GC for no more than 10K and after the 2k I spend for metal I will have owed my old GC $5k. Well within small claims if it comes down to it. Not that I think I can bleed this turnip if it does happen, but I will try. Hiring an attorney should have happened up front, but now that I'm only out $5k under the worst scenario, it's not worth my time and money. I really think he will come through, but am definitely crossing my fingers and rubbing my rabbits foot.

Good advice up to this point and you did the best you knew. I would only add that "agreeing" that the suppliers up until now have been paid is not enough. As part of that agreement, he should produce lien waivers.

Another thing to do with lagging contractors is to pay them daily on a prorated basis.

To those that would analyze the original contract I say construction and improvement contracts vary greatly state to state. It's a very complicated affair here in CA and verbal contracts do stand. But, to be a valid contract that the contractor can collect on needs to be complete. See the state site if you want to know the rules.

 

[camarotoolman]

If you do get it finished, I would duck, dodge, hide, go out of town, whatever to give him some of his own medicine, I love to con a con man.,

 

[L5wolvesf]

To those that would analyze the original contract I say construction and improvement contracts vary greatly state to state. . . . See the state site if you want to know the rules.

Best advice so far. We have no idea what the contract says and don't know where the OP is.

L

 

[DCarr]

probably already been said ... but go with him and make the material payment yourself. Of course have him sign the completion agreement first.

 

[MustangRick]

You said you are in a small town, you shouldn't have too many suppliers then. You may be able to check with this short list to make sure everything is free and clear before you make that final pay off. If you have a neighbor that doesn't work during the day, buy a few cases of beer or something to have them keep an eye on the progress.

 

[bluesman2a]

Good advice up to this point and you did the best you knew. I would only add that "agreeing" that the suppliers up until now have been paid is not enough. As part of that agreement, he should produce lien waivers.

Another thing to do with lagging contractors is to pay them daily on a prorated basis.

Agreed on both points here.
Lien Wavers are necessary!!!!