Builder went bankrupt while building my home- FL (feedback, foreclosed, clause)
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I did a search and did not see anything related to this topic. I do apologize if it has been discussed or if this is in the wrong sub-forum.
I'm building a home in Florida. Just found out that the builder went bankrupt and am waiting to get notice from the builders attorney. Here are the facts:
I purchased the land and contracted the builder to build the home.
What I owe (owed) the builder was the final draw.
Home is about 90% complete.
Has anyone been in this situation before? I'd like to know how the process works. I'll be contacting an attorney this week but would like some feedback from those that have been involved with a similar situation or have knowledge about the process.
Some questions I have:
Do I have to go to court to get the home?
Does the builder legally own the home (since we haven't closed)?
So sorry to hear of this. I certainly hope you don't have to go to court to straighten this out. As to who owns the house at this precise second, that's a bit fuzzy. Theoretically, if you own the land and got a construction loan on your own, or paid cash, then it's most likely yours. However, leins are your biggest issue with that. Did you pay the subs, or did the builder? Did you get lein releases from the subs?
In any case, you definitely need a good RE attorney, stat.
Additional Facts:
Payments were made in cash.
The builder paid the subs.
Construction was in progress so have not received any releases from the subs.
The final draw, which I did not pay yet, was to cover the work that had already been done to the house. Based on this, I believe I can cover the subs for that work from the money reserved from the final draw.
How does the insurance work? The insurance was in the builders name. Can I get insurance on the home in my name so that I may contract the work out to complete the home?
I did a search and did not see anything related to this topic. I do apologize if it has been discussed or if this is in the wrong sub-forum.
I'm building a home in Florida. Just found out that the builder went bankrupt and am waiting to get notice from the builders attorney. Here are the facts:
I purchased the land and contracted the builder to build the home.
What I owe (owed) the builder was the final draw.
Home is about 90% complete.
Has anyone been in this situation before? I'd like to know how the process works. I'll be contacting an attorney this week but would like some feedback from those that have been involved with a similar situation or have knowledge about the process.
Some questions I have:
Do I have to go to court to get the home?
Does the builder legally own the home (since we haven't closed)?
Thanks in advance.
Just read your post ,you need to put a U.C.C.-1 on the property in the amount of your investment( value given to the property) ASAP. You need to do this before any of the other liens from the subs are filed we are doing thew same here in california to protect peoples investment in their foreclosed property and it is working.If you would like help in doing this you can DM me , This help is FREE , Just ask.
Just read your post ,you need to put a U.C.C.-1 on the property in the amount of your investment( value given to the property) ASAP. You need to do this before any of the other liens from the subs are filed we are doing thew same here in california to protect peoples investment in their foreclosed property and it is working.If you would like help in doing this you can DM me , This help is FREE , Just ask.
Thanks Fighter 1. I appreciate your help! I'll contact you shortly.
Additional Facts:
Payments were made in cash.
The builder paid the subs.
Construction was in progress so have not received any releases from the subs.
Oh, dear. This is trouble. If the builder was going BK, he may not have paid the subs, which means you are on the hook.
Quote:
The final draw, which I did not pay yet, was to cover the work that had already been done to the house. Based on this, I believe I can cover the subs for that work from the money reserved from the final draw.
Hopefully. But you don't know that until you can get all the paperwork. And even then, it may be a mess. If the builder took your money and used it to cover loans and sub bills on other properties, you're screwed.
Quote:
How does the insurance work? The insurance was in the builders name. Can I get insurance on the home in my name so that I may contract the work out to complete the home?
I'm not sure I understand which type of insurance you mean. As a homeowner, working on your own place, your insurance requirements are probably different from a contractor. But I've never worked in Florida, and their law is a little different-- there is some French and Spanish influence. In any case, you probably don't want to carry workman's comp on the subs, if that's what you mean. You want them to carry their own insurance.
But this is getting a little ahead of the game. I can see you're anxious to clear this up, but you really, really need a lawyer of your own. You may have to go after the builder just to get the paperwork, if he hasn't shredded it. From there, you can figure out where you stand.
IIWY I'd try to get some sleep. It must be after midnight in FL, it's 9:39 in OR. I'm going to bed, but I'll try to send good thoughts your way.
To clarify the insurance question- the home was insured under the builder. Now that the builder has gone bankrupt- the home is not insured. Can I take out insurance myself on an incomplete home so that that subs may come in to finish it? I'm at risk now that that home is uninsured.
I haven't had a customer experience this but I do know of two builders that went down in my area. And the buyers ended up having to pay the contractors themselves in essence paying for the work twice...once to the builder out of the draw and then out of their pocket direct to the contractor.
I'm so sorry this has happened to you!
To clarify the insurance question- the home was insured under the builder. Now that the builder has gone bankrupt- the home is not insured. Can I take out insurance myself on an incomplete home so that that subs may come in to finish it? I'm at risk now that that home is uninsured.
You absolutely must get a lawyer now. You may need homeowners insurance, but that's not the same as the type a builder carries. And it's not the same as the insurance the subs carry to protect themselves and their own workers. You do not want to get into a situation where you are acting as an employer, as opposed to a contractor, because you could then be liable for workman's comp and any other medical bills if the workers injure themselves on your project. Again, any subs you hire should be carrying their own insurance, and acting as independent subcontractors, not employees. It's important that you understand the distinction.
At any rate, you can't carry on until you get the house closed and have settled all the paperwork. In fact, if the home is 90% complete, and "safe to the weather," there is no great hurry to get those last few finished items done. You may be able to get a certificate of occupancy and move in, as long as you have one working bathroom, and finish the thing off yourself. But until you get these legal matters straightened out, trying to get the home finished could muddy the waters, legally.
The key to getting this matter settled is the contract. The builder is presumably in default, and there should be some language in the contract that covers this, such as the arbitration clause. That's why you need a lawyer-- they are the only people qualified to do this for you. For example, you may end up in negotiations, not with the builder, but with the entity holding the builder's loan. The builder may skip town. If he does, the builder's lawyer will probably drop the ball.
This forum cannot provide legal advice, and it would not be wise to rely on internet postings in such a complex matter. Again, you need an excellent RE lawyer now. Best of luck to you.
MTL99, Mind telling me where in Fl you are? If it is my area I may be able to find out if the subs were paid for you.
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