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Old 05-03-2013, 09:09 AM
 
109 posts, read 155,679 times
Reputation: 33

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What can I do?

I have a construction loan. I also have a contract (Standard A1a builder contract) with a builder to build a SFH and a detached garage in Fairfax. I have a 203k loan to build, but the contractor is saying he can't finish the job because he has to wait 60 days after completion to get his final draw. He wants to drop the garage because he cannot afford to build them both at the same time. If he adds the garage he is going to disturb more than 2500 sq feet so he has to do all kinds of extra things to comply (Add a silt cover, all vehicles have to be clean, etc)

But he signed a contract to build a SFH with a detached garage. It is not my fault he under capitalized his company and now doesn't have enough capital to pay the extra costs associated with disturbing more than 2500 sq feet.

He first asked me and my wife to pay him $40000 up front (So he can pay the extra costs), then we can get reimbursed when the contract was over. Then after he ran some more numbers and came back he said that wasn't an option and asked us to remove the garage to keep the project moving.

At this point I am afraid he is going to walk and we will have to

#1 Find another contractor to complete his f-up
#2 Sue him to recover the extra money we have to pay someone else to finish his project

Has anyone else went through something like this? Trying to figure out my options...
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Old 05-03-2013, 09:34 AM
 
9,878 posts, read 14,122,777 times
Reputation: 21792
It's a bad place to be in, that's for sure. I think the options you listed are the correct ones, but they will both cost time and money; and you will likely not end the process whole.

Did you do a detailed finacial analysis of the company before you signed with him?
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Old 05-03-2013, 09:43 AM
 
109 posts, read 155,679 times
Reputation: 33
Quote:
Originally Posted by spencgr View Post
It's a bad place to be in, that's for sure. I think the options you listed are the correct ones, but they will both cost time and money; and you will likely not end the process whole.

Did you do a detailed finacial analysis of the company before you signed with him?
No I rode by the registered agent/owner's house. To make sure he has some property I can go after if something like this happened.
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Old 05-03-2013, 10:00 AM
 
9,878 posts, read 14,122,777 times
Reputation: 21792
Quote:
Originally Posted by paulbunyan View Post
No I rode by the registered agent/owner's house. To make sure he has some property I can go after if something like this happened.
Where he lives means nothing. What if it's a huge million dollar mansion, but he's underwater on it? You'd get nothing, because he doesn't own any part of it.
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Old 05-03-2013, 10:31 AM
 
Location: Central Virginia
6,558 posts, read 8,389,581 times
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Gather all your documents and make an appointment with an attorney who specializes in real estate.

Many people feel that attorneys are a rip-off and waste of money but this is a huge investment you are making, spend a few hundred dollars on an attorney!
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Old 05-03-2013, 10:33 AM
 
109 posts, read 155,679 times
Reputation: 33
Quote:
Originally Posted by spencgr View Post
Where he lives means nothing. What if it's a huge million dollar mansion, but he's underwater on it? You'd get nothing, because he doesn't own any part of it.
Wow never thought of that. Thanks! That's why I love the internet. I assume everyone thinks like me (I own a business that is debt free and very well capitalized) I never think that there's people out there who seem to be rich but are not (I guess I'm too much of a nice guy lol)

I just wanted to know if anyone out there in cyberland has sued a builder before. For some reason there doesn't seem to be anyone that has which I know can't be true

On an aside I just got an email from the builder saying he'll just drop the garage and keep it moving. So I dont have to worry about finding a builder. However...I still reserve the right to sue him for not building my garage which he is contractually obligated to do
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Old 05-03-2013, 10:43 AM
 
109 posts, read 155,679 times
Reputation: 33
Quote:
Originally Posted by HokieFan View Post
Gather all your documents and make an appointment with an attorney who specializes in real estate.

Many people feel that attorneys are a rip-off and waste of money but this is a huge investment you are making, spend a few hundred dollars on an attorney!

Try $7500. Upfront. In cash (No credit card)

Then if I lose I have to pay for the builder's attorney

I already spoke with a well known one and that is what he said.

Basically the contract the builder has you sign is extremely tailored to their favor. A1a standard builder contract is what it is. At this point I'm just trying to make sure my project gets finished, and once that is done I may try to recover some damages from him not building my garage.

Maybe I'll do it in small claims. That way i don't have to deal with all these attorneys fees and itll be just me and him
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Old 05-03-2013, 11:26 AM
 
9,878 posts, read 14,122,777 times
Reputation: 21792
Quote:
Originally Posted by paulbunyan View Post
Basically the contract the builder has you sign is extremely tailored to their favor. A1a standard builder contract is what it is. At this point I'm just trying to make sure my project gets finished, and once that is done I may try to recover some damages from him not building my garage.
Are you referring to the AIA document A105-2007? AIA refers to the American Institute of Architects, and their documents are, yes, tailored to the architects and contractors. But, you shouldn't have signed something if you didn't agree to all of the parts.

Quote:
Originally Posted by paulbunyan View Post
I just wanted to know if anyone out there in cyberland has sued a builder before. For some reason there doesn't seem to be anyone that has which I know can't be true
Yes, my good friend sued their contractor and was awarded a judgement. I'm pretty sure they still never saw their money.
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Old 05-03-2013, 11:53 AM
 
109 posts, read 155,679 times
Reputation: 33
Quote:
Originally Posted by spencgr View Post
Are you referring to the AIA document A105-2007? AIA refers to the American Institute of Architects, and their documents are, yes, tailored to the architects and contractors. But, you shouldn't have signed something if you didn't agree to all of the parts.

Every contractor uses those contractor documents.

Yes, my good friend sued their contractor and was awarded a judgement. I'm pretty sure they still never saw their money.
Right.
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Old 05-03-2013, 11:56 AM
 
9,878 posts, read 14,122,777 times
Reputation: 21792
Quote:
Originally Posted by paulbunyan View Post
Right.
Every contractor uses those documents, but you have the right to make edits before you sign. A contract should be something both of you agree to. We make modifications to the AIA documents all of the time.
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