Builder asking for money a year after move-in

kristinvaJuly 14, 2011

We built our house last year and are very pleased with it. We moved in on Labor Day in 2010. Yesterday I received a bill for $7500 purportedly for moldings, passed on to my by my builder after he added in profit and overhead. They claim that they "missed it." I have no way of knowing whether these moldings went in my house or are at all legitimate. What would you do? We obviously closed our loan last summer and cannot add $7500 to it now. Should we pay it? Should they have to prove somehow that we even owe it? It seems very odd to me to receive a bill from the millwork sub 18 months after the last wood was ordered for this house.

Any advice would be appreciated.

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Have they filed a preliminary lien notice referencing a contract for that amount?

Without a contract for that amount, or a lien for a supposed contract, they have no recourse. Bad contracting and record keeping on your builder's part, it may have cost him money, but I do not think you are obligated to pay.

Had the change order been discussed and verbally agreed to, but say the builder forgot to get the proper signatures on the addendum, you may have an ethical or moral obligation to pay. But it is still the builder's maistke. He should take it as a costly lesson. I do not think he has any legal recourse at this point.

You need to do what you believe is right, regardless of who has the legal upper hand.

    Bookmark   July 14, 2011 at 1:01PM
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A year is a long time - if you have not had any issues w/him and he's been upfront and honest you could pay it or you ask to see all the paperwork supporting the millwork or offer to pay 1/4 or 1/2 of it.

    Bookmark   July 14, 2011 at 2:41PM
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Check your state's M&M lien laws but I'm pretty certain that no state allows a contractor or subcontractor to file an M&M lien more than a year after doing the work or supplying the materials. And you say it has been 18 months since the millwork was ordered. Your bank also probably required your builder to sign an "all bills paid" affidavit before it would allow you to close on your mortgage. Thus, there is no way your builder or the millwork sub can collect this bill from you.

Even if the bill is totally legitimate - which I would question - it is either the millwork sub's error (for not timely submitting his bill) or BOTH your builder and the millwork sub's error (your builder for not paying the bill when submitted and the millwork sub for not noticing he hadn't been timely paid and reminding the builder of the deficiency much sooner. How on earth could the millwork sub possibly not notice that he still had an unpaid invoice for 18 months???? The builder and millwork sub need to work it out between the two of them.

If you agree to pay this bill, or even some portion of it, what is to stop your builder from showing up 6 months from now with a bill from the electrician and saying, "oops, I forgot to pay this one too." When would it stop?

I disagree with jeannie01 only because, even if you are shown all the paperwork supporting that $7500 of millwork and millwork labor went into your home, without reviewing ALL the books of either the builder or the millwork sub, you have no way of KNOWING that there is not a corresponding entry somewhere showing that the millwork sub was paid $7500 for that millwork and labor. They SAY there isn't but you don't know and can't know that they're telling the truth.

The whole reason for the "all bills paid affidavit" and time limits on filing M7M liens is that homeowners don't get to see all the bills and payment receipts for materials and labor that go into their homes. You would never be able to rest easy if a builder or sub could show up at any time with a bill and say "this never got paid, you owe it."

    Bookmark   July 14, 2011 at 4:09PM
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I wouldn't pay it. Not a chance. Like you say, how do you know it is even legitimate? He is a businessman and it is not your fault that he runs a sloppy business - and that is assuming it is legit. That is his JOB - to keep up with the bills and pass them off to you - and that is what you PAID him to do. As far as I am concerned, if he missed the bill he should pay the bill at this late date. Did your builder provide you with lien releases after the subs were paid? Mine has (we are building now) and if yours did I would point to that saying that he has been paid in full. I too would expect you are protected by the loan docs.

    Bookmark   July 14, 2011 at 5:05PM
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Thanks everyone!! We are going to check our closing documents and see if there is a sign off on any future payments from the builder to the bank. I hadn't thought of that and that is why this forum is so great. I knew there was something wrong but couldn't come up with why. Bevangel - thank you for an excellent legal argument for why we shouldn't have to pay this bill if it does end in court.

No, they have not filed any liens or anything, just sent us an invoice as they did when the house was under construction (cost plus). I guess we'll see what we can find in the closing documents.

    Bookmark   July 15, 2011 at 9:53AM
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I wouldn't pay either. As others have said, even if it's legit, it's their error for being so disorganized and if they are indeed this disorganized it's possible that you paid already and they have no idea. You've already closed on your house- do they just expect you to have $7500 sitting around?

    Bookmark   July 15, 2011 at 1:01PM
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pps7 - LOL. Apparently we look richer than we are.

I did check the closing documents and there is indeed a form signed by the builder that says that all debts are paid. Hooray! Never would have thought of it without you. Thanks to everyone.

    Bookmark   July 15, 2011 at 1:37PM
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