AboutPeter M. Elliott Expertise First response to queries regarding extensions of time, variations orders, site instructions and payment using FIDIC and other forms of Conditions of Contract, based on English Law, and derivatives only.
Experience Value . . .
It's unwise to pay too much, but it's unwise to pay too little. When you pay too much you lose a little money, that is all. When you pay too little, you sometimes lose everything, because the thing you bought was incapable of doing the thing you bought it to do.
The common law of business balance prohibits paying a little and getting a lot. It can't be done. If you deal with the lowest bidder, it's well to add something for the risk you run.
And if you do that, you will have enough to pay for something better.
. . . John Ruskin (1819 - 1900)
"We are too poor to buy something cheap"
.Romanian Proverb 2002
A lean compromise is better than a fat lawsuit.
George Herbert (English poet 1593-1633)
I said it in Hebrew, I said it in Dutch,
I said it in German and Greek:
But I wholly forgot (and it vexes me much)
That English is what you speak!" Hunting of the Snark - Lewis Caroll
Match your presentation to the reader!
The joy of food lasts but an hour, of sleep but a day, of a woman, but a month, but the joy of a building lasts a lifetime. Syrian proverb.
Comments and observations leading to improvements in the translation of FIDIC Red & Yellow books into Romanian prior to approval by FIDIC (reference 'Preface to the Romanian edition')
Question I have contracted for a house to be built, in Lehigh acres florida in March 2005. I have just recieved a letter Sep 12, 2005 stating that the lot I have purchased has been determined by the Dep. of environmetal protection to be partially wetlands area. The builder says the permitting process is to long and costly so he is no longer permitting for wetlands areas. The builder says they are canceling the contract, refunding the unused portions of the pre construction draw to the lender and that I am resposible to the lender for the used portions of this draw.
Can this be?
Answer Hi,
This is going to be a complicated case and will depend entirely on the details of your contract with the builder and the local laws of Florida. You will need a lawyer with detailed knowledge of the local laws.
That said, here are some general thoughts to be considered in preparing for your discussion with your legal advisor.
Were you advised by a professional prior to your purchase? Did that professional or the seller or his agent advise you that there was a procedure in place, or the possibility of a procedure, to define all or part of the property as wetlands? I presume that the determination does not happen overnight without warning. Was there any evidence of collusion or fraud or negligence by one or any of the parties involved? In UK, we employ a lawyer and a surveyor to inspect the deeds and local zoning as well as the physical properties of the property before purchase. Compensation can be sought from either of them, or the seller, for misrepresentation or failure to act professionally. Have your neighbours been affected in a similar manner? Is there the possibility of a joint action against the previous owners or sellers or ….?
If the land has been determined as wetlands, is there a procedure for objection to this determination? What percentage of the land has been determined? How does this determination affect the approval process for a building permit, especially if it is only part of the land?
Does your contract with the builder allow him to terminate the Contract if the land is determined? If the process is long and costly, how much longer and how much more costly is it? The difference could be your risk, not the total cost. It may be cost effective for you to pay for the permit to be processed. Of course, you want a willing builder not a forced one, who will begrudge every input into your home.
With regard to the builder's retention of part of the pre-construction draw, you must consult your contract and the rules for termination. Generally, a builder is reimbursed for legitimate costs prior to the termination of a contract. However, he must justify those costs, so I suggest that you ask him for a detailed breakdown and justification for the sum retained. However, it may be that he does not have the right to terminate the Contract is this situation. Then you have the right to engage another builder and charge the original builder for the difference between the original price and the final price for the same product, including your reasonable costs in employing a new builder. However, you are always responsible to the lender for any money drawn on the loan or costs involved in the loan. You may be able to recover the money or the costs from a third party, but you are responsilbe to the lender.
You must do as much research as possible before talking to a lawyer, but do not delay too long. Submit a written paper of the case to him and ask for a fixed fee consultation to determine your alternative courses of action. Ensure that he is on a fixed fee at all times and does not exceed that fee without your written permission. Lawyer's fee have a way of escalating.
