contractor out of money

[koala21]

What is the name of your state? NC
My husband and I hired a contractor to build a secondary home. It's ~95% complete, but the contractor has informed us that he has run out of money and doesn't know if he can finish the house. He also informed us that he understands there's 5% left in the construction loan, but states there is several times that worth of work to complete. We're willing to pay out of pocket for the 5% b/c we'll get that back from the bank upon receipt of the CO. We've paid for all change items, so not sure where the additional $$ is coming from. He's also told us that he hopes to win at least 2-3 bids he has out, so he'll have money to finish the work. What happens if he doesn't?? What legal recourse do we have?

Thanks

 

[lwpat]

Contact tne NC Contractor's Licensing Board for assistance.

 

[HomeGuru]

What is the name of your state? NC
My husband and I hired a contractor to build a secondary home. It's ~95% complete, but the contractor has informed us that he has run out of money and doesn't know if he can finish the house. He also informed us that he understands there's 5% left in the construction loan, but states there is several times that worth of work to complete. We're willing to pay out of pocket for the 5% b/c we'll get that back from the bank upon receipt of the CO. We've paid for all change items, so not sure where the additional $$ is coming from. He's also told us that he hopes to win at least 2-3 bids he has out, so he'll have money to finish the work. What happens if he doesn't?? What legal recourse do we have?

Thanks

**A: if he doesn't, you could sue him.

 

[John Se]

How much money are you talking about?

If you are up on the money, meaning he has done the work you have paid for. Then tell him to quit and finish up the house yourself. If he still owes you work but not materials tell him you will pay the bills directly and deduct from the contract amounts. If you have paid in advance for material and labor be very careful because even if you sue you cant get blood from a stone. So I would figure how much it would cost you at this point to finish the house (estimate to complete) then figure how much the guy has remaining to earn on the contract (remaining value) and go from there. so come on and give us the numbers, then i can tell you what I would do.

 

[koala21]

Amount of money

Thanks for the reply.

We have ~$15,000 left on the construction loan, but the contractor states he has ~$53,000 worth of work left (this includes materials). He has asked us to set up an account with the local home improvement center so we can have the remaining fixtures, appliances delivered. He has also recently informed us that he won 2 of his bids, but will likely not see any income for over 6 months. We started the construction process last July, so we would like to complete this ASAP.

Any advice is greatly appreciated!