Considering Legal and other options

gwloloMay 29, 2013

It has come to such a pass with our contractor that we are considering legal options. I would appreciate some advice on how to go about this. We really want the GC out of our lives and just need to move in to the house. Again I turn to GW for creative,practical and sound advice. You guys are smart, compassionate and will hopefully shows the light at the end of the tunnel.

It has been more than 2 years since we started the remodel and we are not yet done. Our project was a whole house remodel. Right now we are very very close to being done and he is dragging his feet scheduling subs and thowing up random invoices. Example - backsplash is done but the grouting is not. Electrical fixtures are in but a couple of them don't work as intended. Some of the appliances are yet to be installed and the kitchen cabinetry work has some work left (appliance panels, some paint touchups, dividers etc.)

City/ permits etc. --> Is the GC required to finish the job and get the necessary inspections done? How do we approach this issue with the city? We are very little remaining that we are unlikely to hire a different GC. We can probably hire different subs ourselves and wrap it up. The city inspection process and getting the occupancy permit is what is really worrying us.

Utilities --> We finally have the electricity connection but the gas meter is not yet installed. The GC told us that the occupancy permit has to be issued by the city building dept before we can call PG&E (our utility in CA) and schedule for them to come and do the gas meter hookup. As the utilities are anyway in our name, can we contact them directly and do it?

Sub contractors --> Even though the subs were identified by the GC, the contract was signed by us and we have been giving checks directly to the sub based on the invoice that the GC provided us. If we were to call the subs directly and ask them to finish what was contracted, can they refuse? Can we force the issue legally? Or should we just consider this a loss and find someone new. How will this impact warranty for the work already done - by the electricians etc?

Legal process --> How does this usually work? At this point, I would be OK if he just gave us the keys back and acknowledged that his involvement in the project is over. I am not looking for any money compensation but I also do not want to pay him a penny more. What should we expect and be prepared for? We have access to a legal plan (Hyatt) through work and we are planning to call them to get some advice. We do not want to use big guns if a small one will make him go away. But maybe I am being naive here.

advice for sanity Given that we are so close, should we figure out some way to complete the remaining work with the GC? Are we opening a bigger pandora's box by considering legal options? When is legal option worth it?

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So sorry it is coming to this!

I don't know anything about the legal aspects, but for permits, in our city (SF East Bay) you need to formally transfer the permits from the contractor's name to your name if he was the one who pulled them. Different cities have different rules on how this works, and sometimes there is a fee. You'll also need to be sure they are current (in our city, for instance, you must have an inspection at least once every six months to keep a permit current and if the number of inspections exceeds the max, there are fees/extensions involved).

If your contracts are between you and the subs, then yes, you can ask them to complete the work per their contracts and they should have no objection. If they are really subs to the main contract that you have with the GC, it gets messy, so if that's the situation I'd ask for legal advice first. (Subs might be more than happy to finish and have you pay them directly, but could be that the GC can then cause trouble.) You can definitely contact PG&E directly for those hookups. (I handled both the permits and the PG&E stuff for our remodel even though we did have trade contractors doing the actual work--it was just easier to be in control of timing.)

Since you're so close, it's probably easiest to try to push the GC to finish--a PITA but likely to get the best outcome as far as money and time spent. But since you have the legal plan, I'd call and ask about the contract issues; might be that one of those would light some fire under the GC to sort it out, since legal action/formal complaints on the record are big problems for contractors. Good luck!!

    Bookmark   May 29, 2013 at 4:34PM
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If you take over to complete the work, will he then be free from any responsibility or liability if problems arise with the work later? I would guess it could get pretty sticky, open to a lot of finger pointing.

Have you made a punch list of what remains and had a meeting with him about scheduling, with a target date for move in?

Being so close to the end, if there isn't serious work ahead he could mess up, I would see if you could work out a schedule first.

If there are things he hasn't started yet, I'd probably have someone else do those.

Sounds like he might have taken another big job already.

    Bookmark   May 29, 2013 at 4:49PM
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Sophie Wheeler

The only people who you should listen to advice from on this are a representative from your town's code office and a lawyer who specializes in construction law. Local laws are quite varied.

    Bookmark   May 29, 2013 at 5:06PM
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You haven't said explicitly why you're considering legal action but if you're close to completion you ought to seriously consider working with the contractor to get the job done. Otherwise you might run into lien issues and well as permit issues. Depending where things stand, you should avoid paying him any additional money until the job is fully completed. You should also get lien releases from the subs that you paid directly.

If you go the legal route, you should go dark and not post details here until the issue is resolved.

If you absolutely can't or won't work with him, then you will definitely need to consult a lawyer.

    Bookmark   May 29, 2013 at 5:31PM
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Review your contract and make sure you understand what terms you have for failure to complete. We had to implement this clause in our remodel because our GC's business failed. While they tried to throw up some distractions so we wouldn't notice, we finally called them on the issue and they were very helpful in getting us through the rest of our job, even tho they were no longer GCs for us, primarily by helping us negotiate prices with the subs (we no longer had to pay the GC's overhead so the price negotiation changed).

Our contract provided us with quite a significant hold-back (about 20% of the total) so we had enough cash to finish the job without having to claw any $$ back from the GC. We never had to sue or threaten suit and we even got the remnants of the GC's team to come and deal with our punch list.

It was a difficult time for us.

Anyway, do you think your GC's foot dragging could be because his business has collapsed? If the subs aren't showing up, pay attention. They are probably not being paid (although you've said you pay them directly this still sounds weird). I would suggest that after you understand completely what your contract allows you to do, you give the GC a hard deadline (I would absolutely call the city and schedule the inspections you need yourself, as long as you are sure the work is satisfactorily done and that you'll pass). Then schedule your move-in date, even if you don't have all the appliances you need.

We lived in our house for 3 weeks with no hot water. You can do that, too.

    Bookmark   May 29, 2013 at 5:53PM
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Tim Sutherland

I feel your pain. In the last 10 years I have had contractors:

-dispute penalty fees written in the contract when the project went over time (their fault). I had a lawyer send him a letter stating that any further correspondence was to go through him and I never from the contractor again.
- a lien put on my house from a sub contractor that the GC did not pay (NY State law allowed it). Our house was about to go into contract when the lien hit us. I bonded the lien and the lien was not renewed a year later.
- a lien put on my house by a landscaper after I told him he was sacked. He stated I owned him $30k for work he had done. He was in breach of at least two TX laws and we resolved in arbitration for much less. I could have won through the courts but it would up to the judge if landscaper would fully cover my legal fees.
- a GC abandoned a project 80% of the way through and it was not possible to contact him. I found out one sub contractor was part paid and another not paid. An investigation found that the GC was basically broke and while I could win through the courts, I would not be able to recover anything.
- current GC stated in the contract the current project would be completed in mid April 2013. At the beginning of May, after setting ultimatums, he wrote the project would be finished by 31 May 2013 - we will have an interesting one way discussion at the end of this week as I see at least 3 weeks work before getting to the punch list.

As you are so close to the end, get legal advise so you can explore your options and find out where you stand if you do sack the GC. While it will be painful and cause you much stress, try and complete the remodel with the current GC - you will be in the house much quicker.

The only ones who win in a legal fight are the lawyers on each side. You can win the fight but still lose money.

My reason for so many renovations are we moved into a 1920s brownstone in Brooklyn NY and were completing the last renovations when my wife got transferred to Dallas TX. It was confirmed the week of Thanksgiving she had the job in Dallas which started the first week of January. No matter how hard we looked, it is not possible to buy a house that requires no renovations.

    Bookmark   May 29, 2013 at 6:07PM
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Do you have a KD? My friend ran into the same issues and called her KD. He in turn called the contractor. The contractor finished everything quickly. Apparently the KD let be known that he would spread the word that the contractor was unreliable.

    Bookmark   May 29, 2013 at 6:07PM
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Sorry to hear this. I don't think anyone here can give you adequate advice without looking through your existing contracts, your plans, and the work completed to date. Probably would be best done by assembling all that and consulting a lawyer.

Unfortunately, you probably know more than anyone about how to sever the relationship with the GC in a way that leaves you as well-protected as possible. It gets really sticky when you leave work 95% completed because that last 5% is where nobody takes any ownership.

    Bookmark   May 29, 2013 at 6:34PM
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gwlolo, i feel your pain. i was in your shoes last xmas. i think we might be in the same area? if you need more advice, feel free to email me!

    Bookmark   May 29, 2013 at 7:15PM
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I think Hollysprings is right....but you might also want to go over your contract with a fine tooth comb and see if there is anything in there that might help you..i.e. dates for completion, etc. Our friends had a problem with their bath contractor---integrated sinks/counters were installed with scratches---manufacturer blamed contractor, contractor said they came that way. Manufacturer agreed to replace them...but contractor kept stalling, made stipulations about when he would/would not come..what work would be done, etc...Friends finally sent him a certified letter(written with help from friend of son who had just graduated from law school) saying he was in breach of contract and referred to specific parts of the contract. That got his attention! He scheduled the work immediately and all was resolved. Good luck!

    Bookmark   May 30, 2013 at 8:41AM
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modern life interiors

I also live in ny. Thank you for posting this.

    Bookmark   May 30, 2013 at 9:40AM
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Thanks all for your advice. I think we walked back from the cliff today. I played good cop and we decided to pay some disputed invoices but stop a sub who was robbing us blind from doing any other work. I had a fairly civil meeting with the GC. Let us see if he is going to help us cross the finish line. At the end of the day, I don't care as much about justice being done and fair decision as I do about getting the project done and moving in. This is so exhausting and demoralizing. We are trying to remove emotions from the picture and see if we can push for completion.

    Bookmark   May 30, 2013 at 4:22PM
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That's good news! Two years of a reno enough to drag anyone down, even if things go fairly well. Take some deep breaths, have some Breezy pasta (ha!), and maybe some chocolate. Oh, about a margarita! :-)

You can get through this!

    Bookmark   May 30, 2013 at 4:34PM
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That's good news! Two years of a reno enough to drag anyone down, even if things go fairly well. Take some deep breaths, have some Breezy pasta (ha!), and maybe some chocolate. Oh, about a margarita! :-). I posted one with rhubarb on the margarita thread.

You can get through this!

    Bookmark   May 30, 2013 at 4:35PM
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Glad you were able to get things mostly resolved without it escalating and getting nasty....but sometimes it's unavoidable, unfortunately. Hope you will enjoy a finished remodel soon!

    Bookmark   May 30, 2013 at 5:03PM
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seems like a wise decision considering where you are in the remodel. i'm also going on year 2! good luck in the final hurdle! looking forward to seeing your finished pics.

    Bookmark   May 31, 2013 at 2:26PM
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