Home Construction Contract

[L.Lundy]

What is the name of your state? Missouri

I want out of the contract I entered into in March. The house we contracted them to build has slowly but surely changed into something that barely resembles what the original plans were. We have been perpetually bombarded with orders to downgrade in order to meet the budget and shaved 95% of the custom features off of the home. The final straw was last night when we were informed they now want us to downgrade about the only thing we have left... the doorknobs and faucets and refrigerator. We had factored in a refrigerator in our appliance package, and now they're telling us that we can't have the refrigerator since it's an FHA loan and FHA guidelines won't allow us to buy a refrigerator as part of the house. My loan officer's assistant says that she knows of nothing in FHA guidelines that forbids the purchase of a refrigerator with a home.

To be as specific as I can, does the fact that one of the points of our contract requires them to give us invoices and updated cost projections on or before the 8th of each month for our approval and they have not done this for the entire life of the project (it started in March) help us get out of the contract? I don't know enough about how contracts work to know if their failure to hold to one of their obligations within the contract effectively lets us off the hook for our obligation to buy. There are a few other points in the contract that they have also failed to live up to (such as informing us in writing of any requested changes, etc.), but I don't know how much these things matter. It's just turned into a nightmare. They're complaining that they won't make their percentage as it stands, due to the fact that our cutoff amount was $115,000 and either through gross incompetence or god knows what they have already hit $108,000 on cost to build alone, not counting the 15% they're supposed to get on top of that. But I'm not feeling sorry for them, since they originally told us they could build what we wanted for under $92,000, which would have had us paying approximately $107,000... WITH all the upgrades we'd selected. Now we're down to almost a shell of what we started with... floor downgrades, fixture downgrades, the deck was eliminated, no landscaping will be furnished now, blah blah blah... and I've just had enough. I want out as of yesterday.

Okay, I'm sorry for babbling. I've just had the worst month, culminating in a totally horrible day yesterday due to these latest developments, and it accidentally vented out here.

Any help would be appreciated.What is the name of your state?

 

[shortbus]

You can only get out of the contract if there was a material breach (ie. BIG breach) by the contractor. The failure to provide invoices is not a material breach. It's still a breach, and you're entitled to be compensated for whatever damage it caused you (but that's probably $0).

 

[L.Lundy]

Thanks for replying. I managed to get in to see an attorney today (thank GOD), and he told me that there are at least 4 instances of material breach, since most of the downgrades were not agreed to in writing, among some other contract inconsistencies of some sort... don't ask me, it all started sounding like Greek, lol... and he said he could take care of it for me. Rattled off a dictated letter to send to my builders right there on the spot. He's a well respected attorney here (partner in a very large firm) and said that in a case like this, it would make no financial sense for the builders to fight me on releasing me from the contract, so the likely result of him sending them the letter will be a voluntary release from all obligations. He says that cases like this take so long to go before a judge that a builder would have to effectively be insane to tie up a property in court proceedings instead of putting it on the market. I have to assume he knows what he's talking about (pleasepleasepleasepleaseplease) because this whole thing has just been a nightmare. If not?

We're screwed.

 

[Buk1000]

L.Lundy, that is the way it's supposed to work. Sometimes builders breach the contract and still sue the buyer for what they claim are their damages when the buyer tries to get out. I hope you lucked out and did get a good attorney. That can make a big difference.

 

[L.Lundy]

Well, my attorney emailed me earlier and told me that he received a message this afternoon stating that my builders have retained counsel. He attempted to call the attorney they indicated they were using, but got no answer and had to leave a voicemail. We'll see what happens over the next day or two, I guess.

I'm popping Maalox left, right and sideways.

 

[shortbus]

If the question was "can a lawyer intimidate the other party into releasing me from the contract" the answer would be "quite possibly". However, if I were the construction company, I wouldn't roll over so quickly.

 

[L.Lundy]

It's not that I want them to roll over, it's that the costs of the house have skyrocketed while the quality of the materials has been slashed left and right and the list of items we went into the agreement with has effectively been discarded by the builder. If they couldn't reasonably expect to deliver what we said we wanted for the price they offered, they shouldn't have held it forth as a certainty. I wouldn't mind paying what they're charging us now if we still had everything we'd asked for, or even a majority of what we'd asked for. But to pay our maximum cost allowed for a house that's been stripped down? I don't think that's fair. They're wanting the same price for our house that other new builds currently under construction in the same subdivision are getting, but with substantially less upgrades.

I don't know what's going to happen, and it's not like I want to break my builder or punish them in any way, but I think that if we pay for this house after the final cuts they're wanting to make we'll be getting ripped off to the tune of about $9,000.