Final Payment to contractor more than agreed upon

[ewygirl]

What is the name of your state (only U.S. law)? New York.

We are rebuilding our home that was lost to a fire and then 4 months later Hurricane Sandy. Original contracted stated $210,000. After Sandy we needed to do more since the foundation and what was left of our home was not salvageable. Total then became $220,400. I signed a document stating an increase but it was never laid out what that increase was. I know...dumb me... I did messgae him and he stated the $220,400.

We are nearing the end and our new mortgage company wants a final bill. The contractor came by today and gave me a bill for approximately $6,000 more than agreed upon. No where in our contract did it state that we pay for the variance, architect, new flood vents. We did agree to upgrade the doors and add some extra lighting, which we would gladly pay for.

We need the CO. We need to start living our lives again. I am just sickened by this. After much thought, I think that we should sit down with him and talk calmly. BUT!!! We have been having trouble with him from the start regarding money and how he is paid, despite him agreeing to the payment schedule. And, I do not know if I can be calm despite all that is at stake.

Do we just "fire" him and have him sue us? We calculate that we owe him about $14,000. I think that he thinks that we would have just paid it, but he is very wrong.

We can not get the final payment from the insurance company without him signing paperwork for our mortgage company. (Lien release and completion of work.) So, we would both lose, which is not what I want. He did 90% of the job and I would pay him for 90% if he would walk away, but I know that will not happen.

How is the best way to handle his situation??

 

[justalayman]

How is the best way to handle his situation??

You start with this:

I think that we should sit down with him and talk

No where in our contract did it state that we pay for the variance, architect, new flood vents.

is there some reason for a variance that the builder caused or is it just something that is required to build as you have? That will determine who is likely liable for the variance fees. More than likely, it is your cost. If the variance had not been obtained, what would it have changed as far as the home being built?

architect fees? One way or another they are your costs. Either the builder includes them in his overhead or charges you for them outright. How did you expect him to build the home without it being approved for any engineering change?

flood vents? I am unfamiliar with the term but could it be it is a code requirement?

with all of that said, the first thing you need to do is talk with the guy. Ask him to explain the charges and explain why they shouldn't be included in the price quoted.

Of course, before you do that, study your contract so you are very familiar with it so you can speak with some knowledge of what it requires of all parties involved.

 

[ewygirl]

You start with this:



is there some reason for a variance that the builder caused or is it just something that is required to build as you have? That will determine who is likely liable for the variance fees. More than likely, it is your cost. If the variance had not been obtained, what would it have changed as far as the home being built?

architect fees? One way or another they are your costs. Either the builder includes them in his overhead or charges you for them outright. How did you expect him to build the home without it being approved for any engineering change?

flood vents? I am unfamiliar with the term but could it be it is a code requirement?

with all of that said, the first thing you need to do is talk with the guy. Ask him to explain the charges and explain why they shouldn't be included in the price quoted.

Of course, before you do that, study your contract so you are very familiar with it so you can speak with some knowledge of what it requires of all parties involved.

I hear what your are saying and thank you for your help...We knew that we needed a variance and were under the impression that since he verbally told us that he was paying for the architect that it was included. The architect mailed us paperwork but the contractor said that he was handling it. The situation became more complicated after Sandy and revised plans were needed so the architect of course charged for the revisions. Which we thought was included.

Flood vents were needed after we had to raise the house due to Sandy to meet code. The contract states "raise house to code" which I read as the price listed on the contract includes the cost of the flood vents, and anything else.

A flood certificate was also added at the end...If we were responsible for all of these "extra's" then we should have been told at the time of the contract. I can only equate it to "Here's a new car at the price that we agreed upon, but now give me money for headlights or seats or gear shift"

My husband and I know nothing about this construction stuff, but I'm sure that my contractor does. I feel as though he miscalculated or misjudged the cost to raise the house and instead of talking to us, he just gave us a bill that we were not prepared for.
My husbands plans on calling tonight...calmly..and if need be ending with "I've got to talk to a lawyer because this situation does not seem right." We've lost everything already. Insurance does not make you whole. This guy can not get more money than stated in our contract if we do not have it to give." Sucks but true.

Does anyone know if I am legally allowed to stop him from working on my house by changing the locks? I am not trying to be a b***h, but I do not trust him to be honest and not "remove" items from the house.

 

[justalayman]

ewygirl;3162183]I hear what your are saying and thank you for your help...We knew that we needed a variance and were under the impression that since he verbally told us that he was paying for the architect that it was included. The architect mailed us paperwork but the contractor said that he was handling it. The situation became more complicated after Sandy and revised plans were needed so the architect of course charged for the revisions. Which we thought was included.

that last architect charge could go either way. It would depend on the contract which, as you have noted, is verbal. Here is something to check: look at the contract for something like: all extras, changes, alterations must be in writing to be enforceable. If there is something similar to that, it gives you a bit of leverage in this.

Flood vents were needed after we had to raise the house due to Sandy to meet code. The contract states "raise house to code" which I read as the price listed on the contract includes the cost of the flood vents, and anything else.

sounds like a reasonable interpretation

A flood certificate was also added at the end...If we were responsible for all of these "extra's" then we should have been told at the time of the contract. I can only equate it to "Here's a new car at the price that we agreed upon, but now give me money for headlights or seats or gear shift"

how about: here is new car but those oversized, non-standard tires you want will cost $$$. Whether they are extras or should be included in the quoted price will depend on the exact terms of the contract and if they were items typically known and as such, something the contractor would typically include in the original bid.


My husband and I know nothing about this construction stuff, but I'm sure that my contractor does. I feel as though he miscalculated or misjudged the cost to raise the house and instead of talking to us, he just gave us a bill that we were not prepared for.
My husbands plans on calling tonight...calmly..and if need be ending with "I've got to talk to a lawyer because this situation does not seem right." We've lost everything already. Insurance does not make you whole.

This guy can not get more money than stated in our contract if we do not have it to give." Sucks but true.

I understand your statement but you need to realize a contractor has various legal means to get paid. You really don't want to find out what is available because you don't think he can do anything.

Does anyone know if I am legally allowed to stop him from working on my house by changing the locks? I am not trying to be a b***h, but I do not trust him to be honest and not "remove" items from the house.

most likely, yes but you really don't want to do that either. If you lock him out, he can argue you frustrated his ability to complete the contract. That would not set well. It could end up costing you even more money. It could allow him to seek a payment in full of the contract.After such, he could easily string out the completion of your home so your CO is delayed for a considerable time, even if you would hire another contractor to finish it (and you likely would not be able to get a refund of what it cost you to have it finished). It isn't a game you want to play with a seasoned contractor. They know it better than you.

What you need to do is take a lot of pictures/vidoes of the home on a very regular basis. If something should happen, you will have before and after proof.

 

[ewygirl]

I appreciate your help and sane words tremendously.

Yes, the contract does state "Any alteration or deviation from the above specifications involving extra costs will be executed only upon written orders, and will be come an extra charge over and above the estimate."

We could argue that Flood vents and a flood certificate and the revised plans are alterations/deviation.

I am just frustrated by this situation. He has so many rights, while we would need to fight for what is right.

I thank you again and thank you for having me read that fine print.

 

[justalayman]

We could argue that Flood vents and a flood certificate and the revised plans are alterations/deviation.

that or that as it being a requirement, it should be included in: The contract states "raise house to code"

either way I believe you have a valid argument to refute the charges.

the fact that your contract requires you to have changes in writing and this entire addition was not in writing gives you a point to argue the charges. I would not suggest attempting to get it for free but it surely puts him in a position where you can require he (especially since he is the licensed contractor and I presume the provider of the contract) has to defend charges his contract specifically says are not valid.

I am just frustrated by this situation. He has so many rights, while we would need to fight for what is right.

It can go the other way as well. There are a lot of customers that do their best to screw over the contractors as well.


when all is said and done, you may find it better to pay whatever and sue him for anything you believe was invalid charges. He can hold up your CO during this disagreement and that is obviously not in your best interest. Just be very cautious that if you do pay him his demands that you do not sign any releases that would suggest you accept the additional costs as being valid. That would defeat any claim after that to argue they were invalid charges.

 

[ewygirl]

Thank you again.

I think that my friend figured it out...After Sandy FEMA came to our town and we spoke with them at our home..that's all just spoke to them about how we are doing, we are OK blah blah blah. Idiot probably assumes that we got money for the flooding. FEMA gave us nothing because we already lost everything. And, we did not ask for anything because we already lost everything.

Thanks again.