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 had a contract with a general contractor to build a log home WeatherTight. This is in California. Much research was spent on the log company although this did not really pay off.
Architects and log company had falling out during my design process which delayed the process and there were errors that were not picked up by company or the dealer/contractor.
The contract was dated 03/2003. The first permit was obtained in 05/2004.
The contractor built the daylight basement shell fairly quickly the summer of 2004 then stalled from August to end of Oct because the log delivery kept getting delayed.
He then was able to stack first floor logs but stalled again for approx 6 weeks because he lacked the knowledge to construct the upper floors. I have the complete log package huge beams etc.
I had to then wait while he found some one who could do this while rain poured all over my logs and serious mold started. He was even going to log home shows to hawk logs during this time.
Finally the second story and the roof framing were done with many errors.
Example the beams between the first floor and second are 8 inches lower then the plan. No exact explanation was given. Window was cut and the landing of the stairwell is smack in the middle. Has to be fixed.
Well to try to wind this horror story up.
He stalled again as he never has a crew and he didn't have the knowledge to install the log siding on the daylight basement. Also he never had the funds to carry himself.
I obtained a construction loan at the beginning of this nightmare which I had to extend once at the cost of $2700. I was faced with this again so decided to get a new appraisal and new loan as it appraised way higher and I could borrow more.
I was now 2 years out on this project. For the first loan I needed a contractor but now I didn't. So I decided to fire this contractor.
I did obtain some legal direction before I did this.
I presented him with a breech of contract and asked for a cure.
items in breech
1. failure to do work in timely manner as described by the contract
2. failure to provide workers compensation ins
3. work of inferior quality
the cure
provide proof of WCI
provide documents of money owed him and subcontractors
provide definitve timeline for completion of work
The only part of the cure he provided was the documents of money owed.
So I served him with a cancellation of contract.
He presented the bank with an update of the spread sheet which showed that he was due $5200.
Roofer will be owed $12,600 when done. He is %90 done but could not go further as contractor needed to install wood siding on dormers.
Well about 4 days before loan is ready to close he puts a mechanics lien in the amount of $85,000.
This basically reflects the money he would be owed if he had completed the work.
The list of work not complete is pretty extensive.
Well needless to say we now have a lawyer and he has one.
He has to perfect the lien by 08/15.
Our lawyer has asked his lawyer three times now for documentation to support his claim.
I have prepared a notebook with documents that shows (Contractor's own documents) that he has been paid and the unfinished items he had bid out the completion cost on.
He has provided nothing so far.
Now we wait again.
My question for you is this how it is usually handled by the lawyers.
He appears to be lying to his lawyer, who is buying it for now with no proof.
Our lawyer is waiting for documentation.
I would like to file a complaint with the state contractor's licensing board and also make a claim on his surety bond but have been told to wait and see.
This whole thing has been cruel injustice but such is his constitutional right to a mechanics lien with no affadavits to support it.
How would you advise this be handled or do you have any suggestions.
Noone, bank, new contractor fixing and completing, lawyer, seem to think he has any intention of perfecting it.
Anyway thanks for reading this long diatribe.
I am open to suggestions!
Paul Honn
Answer Hi Paul,
You have found the Contractor from hell. Why did you choose him in the first place? Did you not check that he had the experience to do this kind of work in the first place? I have been investigating building a log home and the internet is full of helpful sites regarding selection of contractors and risks of construction. You don't need this sort of wise after the event comments.
Your contractor seems to have been stretched beyond his capacity, both financially and technically. For future reference, generally, I recommend that the maximum monthly value of a contract should be between 5 and 10% of a company's monthly turnover. If it is less than 5%, then the Contract is not interesting to higher management if things go wrong. If it more than 10%, there is a danger that the Contractor does not have sufficient reserve resources, financial or technical, to cover any delays or mishaps.
Yes the mechanic's lien is there to protect small suppliers and it is abused frequently. Just read some of the questions and answers on this site. In this situation, I would investigate alternative dispute resolution before I talked to lawyers, even at this late stage. Do a web search; there are lots of sites out there on it. I am sure that you have done the same for mechanic's lien to investigate potential strategies and keep your lawyer honest. Incidently, at best he could claim loss of profit on unfinished work, not the whole cost of the project, unless it was completed. You will have to pay him for the actual work done and allow him chance to correct any errors. Remember you want a home built, however satisfying revenge might be. It might be that he would be willing to cut his losses and run, or at least finish minor outstanding works, so that following trades can finish.
After trying and failing to get an agreed sensible solution, my strategy in this situation would be
1. Get three bids to finish the work,
2. give him notice to complete in 30 days, listing all work to be completed or corrected, or you would appoint a new contractor and charge him the difference plus all reasonable expenses
3. Terminate his contract in accordance with the provisions of the Contract - non performance
4. chose the most economically advantageous bid and sign a new contract
5. Advised his bond holders and insurance company
6. If he has no insurers or bond company, advise the IRS and state authorities that he is in breach of state and federal laws
7. Let the lawyers sort out the dust and get on with my life.
Good luck and I hope that you get your new home finished quickly. Incidentally, make sure that you put a limit on your lawyer's fees or they will bankrupt you, because you will still have to pay them even if you win a court decision that your contractor has to pay, because he may disappear without paying. The aim is still to get a new home for yourself, not your lawyer.
