Is builder's penalty legal? What are my options?

[rrob]

What is the name of your state?What is the name of your state? FLORIDA
Approximately a year ago, we signed contract and agreed to buy a new home in (north) Tampa, Florida.

Our builder has agreed to allow us to install our own floor and to cancel our order for the floor we selected to be purchased from him.

However, as of July 12, he has assessed us a penalty of nearly $ 3,716.00; calling it a "Non Refundable C/O Fee; 251 Option Cancellation * Item Selected After Construction Sequence Allowed".

At this late date (we expect to close in a few we weeks), I do not want to have them return my deposit and “walk away”, as the CFO has stated that he would be willing to allow us to do.

I don't want to jeopardize the closing by refusing to pay the penalty. But, I would like to have them remove the charge before we close, rather than pay the fee and then try to recover in small claims court.

Can you please advise the options we may have here – If any -?
We sincerely thank you for your advice.


The first time (last August) we met with the Design Coordinator we agreed to purchase an upgraded floor from the builder. She told us that we might be charged $100.00 to change this option. At this meeting
I , my 2 parents, and a relative (who is also a real estate agent)were present.

Over the past year the company never disclosed that any penalty fee would be assessed, other than the $100
Referenced. Nothing in any document we have received from them, prior to receiving the bill , stated that such a large fee, 25% of the price of the floor they offered, would be charged. Neither did anyone with whom we had met, (and to whom we did state our desire to install our own floor) mention this; neither the design coordinator, the contract manager, nor the general contractor/owner.

When I appealed to the CFO, stating that no prior disclosure of the fee had been made, and that any delay in making the change was due to their company’s lack of diligence, citing correspondence I have kept . The CFO told me that even if we had made the change one day after the options contract had been signed, we would have been charged the penalty. This statement is very different from the original assertion made by the Design Coordinator.*

During the year, I have made numerous attempts to contact them and obtain information, (mostly by email).
Anyone would easily see from this correspondence how consistently how sloppy ( or non-existent) their follow up and response to my letters has been.

To illustrate my point: - among other incidents, a contract prepared by them, (signed by us, returned to them, and sent back to us) agreed to deliver a 15 x 16 lanai for a certain price. A few days later, they telephoned they to say they could not deliver as it encroached on wetlands. (!)
One would think that several people might have had a hand in pricing and authorizing this item prior to mailing it.
[Note: This document (Addendum) states ,”In event of a conflict between this addendum and the prior executed purchase contract or addenda, this latest addenda shall control.”
This seems to me to state that signing the Addendum commits me to paying their penalty. Does it not hold true that they are committed to delivering the lanai as they themselves have authorized? - Obviously they cannot do so, legally. Is this sort of like writing a rubber check?]


*In a letter to the CFO, our relative confirms the Design Coordinator’s statement. Our relative wrote to “George”, the CFO, after speaking to him. Here is her letter emailed to him and to "Bob", the President of the company.





Sent: Tuesday, July 26, 2005 1:25 PM
Dear George,

The contract reads that the cost of the change order must be attached to the change order...Should the buyer be penalized because the builder continuously failed to get the change order form to the buyer?

This email* in June is confirmation in writing that the B----’s have decided to install their own flooring.

You even mentioned yourself that you apologize that no one sent them the change order form, but they should have put it in writing. See attachment below. It is in writing.

In addition to this, The B----'s had no reason to believe such a large charge would be attached since
your sales person (Design Coordinator) not only neglected to disclose such a fee.... but guaranteed only a $100 charge should a change need be made. I was present at the design center meeting and encouraged the B----s to make their choices since the penalty was only $100 as per the Design Coordinators 's (salesperson's) instructions.

In addition to this, there was a large period of time that the Design Coordinator was completely unavailable
(NOTE: She fell off her motorcycle, was not wearing a helmet, and spent time in the hospital.)
and your company failed to offer the B----s a replacement for her to help with their questions and concerns in regards to the design center choices. I hope that your company will accept their responsibility for the gaps in communication and in some way work with the ---- family in this matter.

A 25% fee is quite a large sum to be added without disclosure of such a fee.

I personally am very disappointed with the lack of integrity that your company has displayed in this matter.

Sincerely,
-K---------- P----------, P.A


6.16.05
Dear Becky, (Contract Manager)
Thanks for your offer of help.

We would appreciate your follow up on a few things per the attached two previous letters;
one from “Bob” (the President) and the other from you.

At our last meeting, with “Steve” (the General Contractor/Owner) we inquired about the "Options Discount Certificate" referenced in “Bob’s” letter.

Please know that we have seen neither a "Certificate", - nor a change order #1. (The only thing we received in his letter was his letter.)

We also finalized some decisions. We told Steve that we plan to install our own flooring*, and he confirmed that we are due an allowance for this. Are we not supposed to receive written acknowledgement (- like a copy of the change order)?

We would like to know, specifically, what is our financial obligation to date?

Regarding your letter; the error in our address was probably a typo- but we would sincerely appreciate your checking to see that this is so. (C---------- Blvd is our correct address). Fortunately, although our letter was delayed, it was delivered to us, and was not returned to FDC.

*Thanks for clearing up the orchestration of installation issue. We will speak to Mike.

The B---‘s


PS. No response to her letter from them.

[HomeGuru]

Originally Posted by rrob

What is the name of your state?What is the name of your state? FLORIDA
Approximately a year ago, we signed contract and agreed to buy a new home in (north) Tampa, Florida.

Our builder has agreed to allow us to install our own floor and to cancel our order for the floor we selected to be purchased from him.

However, as of July 12, he has assessed us a penalty of nearly $ 3,716.00; calling it a "Non Refundable C/O Fee; 251 Option Cancellation * Item Selected After Construction Sequence Allowed".

At this late date (we expect to close in a few we weeks), I do not want to have them return my deposit and “walk away”, as the CFO has stated that he would be willing to allow us to do.

I don't want to jeopardize the closing by refusing to pay the penalty. But, I would like to have them remove the charge before we close, rather than pay the fee and then try to recover in small claims court.

Can you please advise the options we may have here – If any -?
We sincerely thank you for your advice.


The first time (last August) we met with the Design Coordinator we agreed to purchase an upgraded floor from the builder. She told us that we might be charged $100.00 to change this option. At this meeting
I , my 2 parents, and a relative (who is also a real estate agent)were present.

Over the past year the company never disclosed that any penalty fee would be assessed, other than the $100
Referenced. Nothing in any document we have received from them, prior to receiving the bill , stated that such a large fee, 25% of the price of the floor they offered, would be charged. Neither did anyone with whom we had met, (and to whom we did state our desire to install our own floor) mention this; neither the design coordinator, the contract manager, nor the general contractor/owner.

When I appealed to the CFO, stating that no prior disclosure of the fee had been made, and that any delay in making the change was due to their company’s lack of diligence, citing correspondence I have kept . The CFO told me that even if we had made the change one day after the options contract had been signed, we would have been charged the penalty. This statement is very different from the original assertion made by the Design Coordinator.*

During the year, I have made numerous attempts to contact them and obtain information, (mostly by email).
Anyone would easily see from this correspondence how consistently how sloppy ( or non-existent) their follow up and response to my letters has been.

To illustrate my point: - among other incidents, a contract prepared by them, (signed by us, returned to them, and sent back to us) agreed to deliver a 15 x 16 lanai for a certain price. A few days later, they telephoned they to say they could not deliver as it encroached on wetlands. (!)
One would think that several people might have had a hand in pricing and authorizing this item prior to mailing it.
[Note: This document (Addendum) states ,”In event of a conflict between this addendum and the prior executed purchase contract or addenda, this latest addenda shall control.”
This seems to me to state that signing the Addendum commits me to paying their penalty. Does it not hold true that they are committed to delivering the lanai as they themselves have authorized? - Obviously they cannot do so, legally. Is this sort of like writing a rubber check?]


*In a letter to the CFO, our relative confirms the Design Coordinator’s statement. Our relative wrote to “George”, the CFO, after speaking to him. Here is her letter emailed to him and to "Bob", the President of the company.





Sent: Tuesday, July 26, 2005 1:25 PM
Dear George,

The contract reads that the cost of the change order must be attached to the change order...Should the buyer be penalized because the builder continuously failed to get the change order form to the buyer?

This email* in June is confirmation in writing that the B----’s have decided to install their own flooring.

You even mentioned yourself that you apologize that no one sent them the change order form, but they should have put it in writing. See attachment below. It is in writing.

In addition to this, The B----'s had no reason to believe such a large charge would be attached since
your sales person (Design Coordinator) not only neglected to disclose such a fee.... but guaranteed only a $100 charge should a change need be made. I was present at the design center meeting and encouraged the B----s to make their choices since the penalty was only $100 as per the Design Coordinators 's (salesperson's) instructions.

In addition to this, there was a large period of time that the Design Coordinator was completely unavailable
(NOTE: She fell off her motorcycle, was not wearing a helmet, and spent time in the hospital.)
and your company failed to offer the B----s a replacement for her to help with their questions and concerns in regards to the design center choices. I hope that your company will accept their responsibility for the gaps in communication and in some way work with the ---- family in this matter.

A 25% fee is quite a large sum to be added without disclosure of such a fee.

I personally am very disappointed with the lack of integrity that your company has displayed in this matter.

Sincerely,
-K---------- P----------, P.A


6.16.05
Dear Becky, (Contract Manager)
Thanks for your offer of help.

We would appreciate your follow up on a few things per the attached two previous letters;
one from “Bob” (the President) and the other from you.

At our last meeting, with “Steve” (the General Contractor/Owner) we inquired about the "Options Discount Certificate" referenced in “Bob’s” letter.

Please know that we have seen neither a "Certificate", - nor a change order #1. (The only thing we received in his letter was his letter.)

We also finalized some decisions. We told Steve that we plan to install our own flooring*, and he confirmed that we are due an allowance for this. Are we not supposed to receive written acknowledgement (- like a copy of the change order)?

We would like to know, specifically, what is our financial obligation to date?

Regarding your letter; the error in our address was probably a typo- but we would sincerely appreciate your checking to see that this is so. (C---------- Blvd is our correct address). Fortunately, although our letter was delayed, it was delivered to us, and was not returned to FDC.

*Thanks for clearing up the orchestration of installation issue. We will speak to Mike.

The B---‘s


PS. No response to her letter from them.

**A: your post is too long to read. In one short sentence, what is your issue and question?