Kitchen contractor dramas (before project start!)

smalloldhouseSeptember 3, 2013

Long-time lurker here with a question (note this is my first time signing on under this user name because I'm so anxious about the implications - just explaining that I'm not a troll):

We have a small old house in a very pricey metro area, the kitchen is tiny but needs major-league work on electrical, plumbing, load-bearing walls, etc. to improve it even slightly. We signed a contract with a reno firm about 2 weeks ago; gave them a 1/3 deposit as part of the deal, another 1/3 when the work begins, another 1/3 at the end. The firm had a hundred-plus great reviews (with a few exceptions), no complaints or other issues on record with state or local agencies, etc. It was a hard sell but having interviewed a bunch of contractors I wasn't totally shocked.

All seemed well - they began mobilizing to get the cabinets ordered, do electrical upgrades, etc. Then last week the sales person I dealt with told me that he had left the firm and warned me that the owner is a bad guy who does bad work. And that he only was trying to start a piece of project to force us to pay the next 1/3 installment.

Great. One of their only negative reviews involved a similar story (sales guy goes missing; owner is wacky; etc.) The sales guy himself is obviously wacky too, but that's not reassuring really. I've been hyperventilating all weekend.

The owner came out today to reassure me and discuss the project. He reviews the work that's supposed to be done, and then tells me that the sales guy should never have offered to do the project at the cost in the contract. He announces that he wants to make me happy, etc etc, and that he'll start from scratch, send me an email that converts the contract to a planning agreement, with the money we've already paid refundable if we don't like the plan (which he strongly implies will cost at least $10-15k more than what we agreed to, which would be way beyond what we want to spend.) Then he actually offered to refund all but $1k of our deposit on the same basis.

There's a lot of sales BS - he wants everyone to be happy and he wants the job done right etc etc. I'm not sure if he's really trying to cut his ties b/c he can tell I'm going to be a PITA client, or if he thinks he can get us to sign for a bigger/more expensive project, or if it's all just a scam to string me along. Or all three. Both the firm owner and the sales guy seem to be in some dispute over commissions, etc., so that may also work to the owner's benefit if he ditches the original contract.

I really wanted to get the project done ASAP, but now I'm totally freaked out. I'd be just as happy to walk away, but I have signed a contract and I can't afford to throw away money.

What advice would the experts on both ends (homeowners and kitchen pros) have for someone in my shoes? Thanks.

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Well, right off the top I would take issue with spending 2/3 of the cost of the project just to BEGIN the work. I don't understand why you are paying him another 1/3 when he hasn't even started working yet. What incentive does the guy have to do the work, and do it well, when you have already paid him for the majority of the work?

    Bookmark   September 3, 2013 at 5:07PM
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I would take my money and run. Keep looking. Have you checked Angies List?

    Bookmark   September 3, 2013 at 5:14PM
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Get ALL your money back and RUN, RUN, RUN. You may have signed a contract but he's not living up to it.

    Bookmark   September 3, 2013 at 5:28PM
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I think you agreed to too much paid up front. But the contract is in writing, so if he's not willing to fulfill 100% of the contract at the signed upon price, and unless somewhere in the terms you agreed to pay for the estimate, I think the ball is in your court to insist on 100% refund. If he comes back and says he'll do the job per the contract, then I believe you're out of luck.

    Bookmark   September 3, 2013 at 5:35PM
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I agree with foodonastump.

It's not your problem if the sales guy gave you the "wrong" price. This guy can live up to the terms of the contract you and the firm signed or he can choose to walk away and give you ALL your money back. I assume there's nothing in the contract you signed that says that if he breaches the contract, he still gets to keep $1K even if he hasn't done any work.

If I were you, I'd hope for him to give you all your money back and walk away. But make sure it's coming from him. He's got to be the one to say he can't/won't live up to the contract. And don't let them do ANY work until this is settled. None. Not a tiny bit. If they do anything and then he walks away, he can probably make an argument that you owe them a fair price for the work that's been done and then you get to argue about the value of that work.

If he agrees to live up to the contract, get something in writing. Make him sign a letter that says he's agreeing that the contract is good and that he will comply with all the terms in a timely fashion.

Hopefully, you end up with a new company. A fair payment schedule would be something like 1/3 up front, 1/3 half way through and 1/3 on completion.

I don't know where you live, how long you've been there or who you know, but if you get to find a new contractor, I would rely on actual personal recommendations from people you know, whose standards are similar to yours much more than on reviews on a website. One good friend you trust who says "I used this guy and he's great" is worth 100 reviews from strangers, IME.

Good luck.

    Bookmark   September 3, 2013 at 5:49PM
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I don't know where you are located, but there may be a period during which you can legally back out of a contract. Here in California, there's a 3 day period to back out, and a contractor can only ask for a deposit of 10% or $1,000, whichever is LESS.

I don't understand what your contractor wants to keep $1,000 for. He can't do the job for the amount stated in the contract and he wants to change the contract terms, but if you don't agree to an increased amount he will just keep $1,000 for his trouble?

I wholeheartedly agree with the above post ... personal recommendations and projects actually viewed are much more valuable than online reviews. Other people's standards of excellence might not be on par with your own.

    Bookmark   September 3, 2013 at 6:32PM
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A "planning contract" leaves you open to too many overages and not what you agreed to.
I agree get out and you should not be obligated at all.

IF they are willing to honor the original contract you are passed the 3 day grace period and then stuck BUT...

However did they have you sign a "Right of Recision". It is a document that says you have three days to change your mind. IF they did not AND your state is like NY, you have recourse to void the contract before work starts since they are (at least in NY) required to give you one of those and keep a copy themselves.

Here in NY state-
1/3 to sign you are reserving time out of a limited schedule,1/3 at start they are not going to finance all the material that will be fixed in place in your home without,1/3 at "substantial completion" which is where ALL of the profit is and often some of the materials...
is common and the legal maximum for construction. It is also in the NKBA boilerplate contracts. Most of the contractors I work with use that schedule of payments though not all. Those that do would not negotiate it under any circumstances.

    Bookmark   September 3, 2013 at 7:24PM
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It's pretty clear that your only reasonable course of action is to run away as quickly as possible, minimize your losses, and start over.

If he hasn't actually done any work then you should get all your money back. The owner doesn't want to abide by the contract you signed so there's mutual incentive to just back out of whatever happened in the past.

    Bookmark   September 3, 2013 at 9:11PM
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If I were in that situation, that would be too many red flags. If the owner has offered a complete refund because he wants to re-work the contract, then take the refund and go elsewhere.

Don't forget to leave your experience feedback on Angie's list and on Yelp.

    Bookmark   September 3, 2013 at 9:45PM
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Duplicate post - sorry!

This post was edited by smaloney on Tue, Sep 3, 13 at 22:04

    Bookmark   September 3, 2013 at 9:56PM
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I hope the OP tells us what happened. This is a very bad situation.

    Bookmark   September 4, 2013 at 1:29PM
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Thanks everyone - your advice is really helpful. Unfortunately we are past the three days recission mark and the contractor's verbal offer to give us back our 1/3 deposit is not in fact bearing out. He sent out his foreman and HVAC guy to see if there were options to use other space, and now wants us to agree to a planning addendum - we'd get all but 1k back for the time being, but we'd be stuck with the terms of the original contract OR a new plan/price that "may exceed the original scope." And he'd keep the 1k as a "development fee." There seems zero upside for us in this so we've left him a message that we prefer to move forward on the original terms.

Fwiw, he may not be wrong that it's an imperfect plan. We have a really problematic house, and every time I posted here with an idea I got a lot of suggestions to either move or just move the whole kitchen elsewhere in the house. Neither of those are real options, and the plan I finally came up with (prompted by another contractor in fact) is better than what I have, but not a perfect layout by any stretch of the imagination. For the contractor it includes a lot of expensive work for a small kitchen and a lot of permits, structural engineer, etc (all in the original contract.) He grumbled when he was here last week that the original price wasn't a good one for all that work.

We discussed just breaking the contract unilaterally, but we'd be on the hook for 20 percent of the original contract, and I'm guessing we'd wind up losing the whole 1/3 deposit we've given him. That doesn't seem worth it to do - I think he's probably a dodgy guy, but so far he has basically done everything he has said he would do. And the only real issue is the allegations of a former employee, who I can hardly trust since he was full of praise for his employer until he left. So I think I'm stuck with the firm, and hoping we can move forward without (too much) drama or acrimony. On the plus side it's a tiny kitchen and they estimated it would be a quick job (a few weeks). And they do seem ready to get underway ASAP. So fingers crossed, and a lot of hope and prayers that this gets better rather than worse.

    Bookmark   September 8, 2013 at 7:18PM
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I don't understand. If he signed the contract, that is the contract that he is obligated to uphold. Not your problem the salesman did the numbers wrong. it was the contractor's responsibility to review that before he signed. If the contractor cannot perform under the terms of the contract, HE, not you, has breached the contract.

If he has given you reasonable indication that he is not going to perform pursuant to the terms of the contract, you have recourse. He has made a unilateral mistake and that does not give him the right to change or void the contract. Unless it was a blatant typo, which can be corrected, the contract must perform pursuant to the agreed upon terms in the signed contract.

You should tell him that you are willing to LET him walk away from this contract for a full, 100% refund of all monies paid and you will not seek any legal action against him for breach of contract.

If you WANT him to do the work as stated in the contract (let's say because it's a better price than you can get from anywhere else), you can take legal action to compel performance.

I'd personally opt for the former, make it clear that you are letting HIM off the hook, and go back to square one with a new contractor.

Under NO circumstances would I pay this joker $1,000 or allow him to suddenly change a signed contract to provide terms more favorable to him.

    Bookmark   September 8, 2013 at 9:19PM
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"The only real issue is the allegations of a former employee" -- Really? After the contractor has tried to wiggle out of the contract while keeping $1000 of your money?!!! That alone would make me not want to work with him!! Are there no other reliable contractors in town? Why do you feel that you are stuck with this firm? Was the signed bid so much cheaper than everyone else that you are feeling guilty about holding him to it?

Absolutely do not let him finagle you into giving him $1000 for nothing! Just because he wants it!

You have a signed contract. He doesn't want to perform the contract. He is trying to make YOU feel responsible for HIS desire to void the contract. YOU are not!

Tell him in no uncertain terms that his offers are ridiculous; if he wants to break the contract, you get a full refund.

Do NOT let him do ANY work until this is resolved.

You sound like you are ready and willing to let him take advantage of you, just in order to get the project started. Are you sure you want to start out like this? Think what will be next once he knows that he can roll you-- upcharges for "more complicated than we expected". Overages for "the price of material went up". And so on and so forth.

Good luck.

    Bookmark   September 8, 2013 at 10:06PM
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I take your points, Raee. But the only reason we "feel stuck with this firm" is that we signed a contract and we can't afford to lose the large sum we have already paid him. We have said we won't sign any addendum or pay 1k for some BS "development" fee. But unless I'm mistaken, he has done nothing yet to void our contract. Indicating that the plan is not optimal is not a breach on his part. If he refuses to do what is outlined in the contract, then we will happily part company. I don't think we've suggested that we can be rolled. If anyone has any practical advice, I'm all ears.

    Bookmark   September 9, 2013 at 12:03AM
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But OP, unless I'm misunderstanding your original post, your contractor is saying he can't do the project at the price they originally told you. So isn't *he* the one who is reneging on the contract? You agreed to pay X dollars for X services and now are being told he can't/won't do that, thus breaching your contract...

Think I'm essentially agreeing w/ Kitten1313 and raee. Sorry if I've missed something --it's past my bedtime ;-)

    Bookmark   September 9, 2013 at 12:42AM
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Sorry, I think I'm responsible for the misunderstanding. The owner of the firm has said the salesman should not have agreed to the contracted plan and has said that the contracted plan isn't a good one - but he hasn't outright said that he won't do it, no way no how. If he does, wonderful - we will insist on our money back and walk away happily. But he's trying to play us - talk us into something that might indeed be better but clearly is to his financial advantage with the proposed "development fee" and explicit reference to higher costs than originally contracted. We declined this immediately, and are waiting to hear back from him.

As @foodonastump and a couple of earlier posters pointed out, unless he formally reneges on the contract, we are stuck with either moving forward or losing our 1/3 payment (it's more than the penalty fee, but something tells me we wouldn't get any of it back from this guy.) Maybe he will back out himself. Otherwise, we will have to go forward with the original plan and watch him like a hawk. Unless someone has another way out?

Past my bedtime too, which is probably why I've been unclear. But since all this imploded, I can hardly sleep anyway.

    Bookmark   September 9, 2013 at 1:22AM
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You may be underestimating the stress of remodeling. Having your house in disarray, no kitchen, and strangers being inside all day, every day, is incredibly wearing. Even with a contractor I like, and trust, this has been much more difficult than I imagined. Knowing that, I'm sure I would walk away from your guy even if it cost me $1k (but it shouldn't!).
Now is the time to reconsider selling your house, and buying one with a kitchen you like or which can be more easily remodeled into something great. To start a project knowing the plan is problematic, and the contractor dodgy, and the budget stretched, is like walking into traffic blindfolded.

    Bookmark   September 9, 2013 at 6:03AM
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This small clarification changes the story entirely. You yourself stated that the current plans include a ton of work to improve the space "even slightly." So I don't think it's outside the realm of possibility that the owner genuinely thinks this plan is not in your best interest. If I'm understanding this right then this was a plan you presented to them, not vice versa, so all they did wrong was try to give you what you asked for. Here's what I'd do:

If you're still comfortable that the plan is "good enough" based on the house's quirks and your financials then go for it. Forget the "shoddy work" comment from the disgruntled ex-salesman. Take comfort in the positive reviews, no complaints with agencies, etc. and take comfort that there will be engineers and inspectors involved.

If the real issue is that you're second-guessing your plan, then the best you can hope for is that he backs out due to you refusing to change plans. At that point I'd say you're owed 100% refund. But if he continues to say he'll go forward per the contract then you have to make a tough decision. Do the work even though it's not what you really want now, or take the hit for 20% (definitely no more, beg for less) and put this all behind you.

You need to put your emotuons behind and make a practical decision. Good luck!

    Bookmark   September 9, 2013 at 7:23AM
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There are so many troubling red flags here. You obviously don't trust him. That's a big issue on its own. You have a house that needs major league plumbing and electrical work that involves load bearing walls. The contractor has told you that he doesn't think the plan is good & it will cost another $10-15,000. You've contracted to give him another 1/3 of the cost of the project BEFORE they start the work. Don't you think it is highly likely that he will find something "unexpected" and he will want more money? It could/will be something that has to be done in order to continue the project.. Then you will be faced with either paying him more money or halting the project and letting him walk away with 2/3 of your money, instead of $1000 or the 1/3 payment you already made. He could be reputable, but if he is and this was an error by his salesman, why isn't he offering to void the contact & give you all your money back? A renovation is just too stressful on it's own, let alone working with all these unknowns and someone you don't trust.

    Bookmark   September 9, 2013 at 3:14PM
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Yes, sorry, it still isn't quite clear to me based on the original post, and I am sorry that I sounded harsh. I got the impression that he was saying that he couldn't/wouldn't do the original plan for the agreed price and wanted you to agree to a higher price for a revamped plan; plus getting $1k out of you no matter if you proceeded with him or not. Sort of like a bait and switch.

Why doesn't he offer you his ideas/revised plan to evaluate whether you want to go to the additional expense free of charge? Wouldn't a designer do that?

You say that there is a negative review with a similar story. That would be a red flag, cause now it isn't just one "disgruntled employee". Did you speak with any former customers? Did any have a remotely similar experience (ie sold a plan at one price but talked into a "better" one at more expense?)

I truly hope that you can resolve this either feeling confident in your choice, or starting fresh with someone else.

Be sure to let us know -- we are all learning from this!

    Bookmark   September 9, 2013 at 4:00PM
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You need to put yourself in a more comfortable position.
So you can at least start sleeping. I would begin getting alternative bids and work toward carefully finding another person to handle the job. Offer your existing plan so you can compare another bid, but ask for any ideas.
These are steps down the path toward your goal.

    Bookmark   September 10, 2013 at 4:53PM
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You should post your plan on here to get feedback as to whether it's a good plan for the tradeoffs. We're nothing if not honest around here about bad plans! If all he is doing is warning you about this being a bad plan, but that a good plan would be more expensive, then he's doing the job that a professional is required to do. If we see something that can be done better, you bet we're going to tell you! And sometimes that DOES require some time and fees for developing that plan. Like the services of a structural engineer, and a professional plumber or interior designer. Making structural changes needs more money spent on the front end in the design phase. And you have to be willing to have the report come back that the project isn't cost effective, or that the project is more complex than the GC thought it might be.

    Bookmark   September 10, 2013 at 5:00PM
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Hi everyone, another update, hopefully a near-to-final one: we declined the contractor's offer to draft a different plan. In truth, I'm reasonably okay with our current plan; he was suggesting that he could redo our entire HVAC system in order to utilize our utility room for more kitchen space. While I understand the rationale (our kitchen is a narrow galley that is also a walkway from the front half of the house to the back half of the house) it honestly wouldn't give me a lot "better" space than the plan that I'd devised with a lot of feedback on GW earlier (under my original user name, I'm holding off on referencing that simply because the saga with this contractor is not quite over yet.)

In any case, the contractor seemed totally OK with our decision. In fact, he spent a couple of hours here on Monday, along with his electrician and the KD from the cabinet shop. Last week his foreman and HVAC guy had been here. And then he sent his draftsman today to do measurements and preliminary sketches for opening up a load-bearing wall, which will require permits. The KD tweaked the design some and I'm actually very happy with the outcome. I left for work thinking I had overreacted before, probably because this has been an obsession for quite a while, and that I was only a couple months away from having a really decent kitchen.

And then: the contractor emailed today saying he had some "medical issues" arise and he did not feel he could complete the project. He sent a release for us to sign that dissolves the original contract and indicated that he will return our deposit within 24 hours of receipt of the signed release. On many levels, this is not my preferred outcome - I was already imagining having a post-renovation party, since I've been too embarrassed by the state of our kitchen to entertain lately - but as most of you indicated, this was a really bizarre and worrisome situation.

Anyway, fingers crossed, this appears to be on its way to resolving itself in the most secure possible fashion. I think we will probably wait until the spring to actually do the main work on the kitchen - obviously we want to take our time and feel fully confident in any future contractors. We'll probably do some pieces of the needed work in the interim, such as the electrical panel upgrade, but my husband is adamantly opposed to ripping out the kitchen in cold weather. I do like the KD at the cabinet shop, and the line of cabinets they were recommending, so I'll try to maintain that relationship. They have been very considerate of me as I've shared the drama on this and indicated they work regularly with other contractors.

LWO, I appreciate your comments, and I may even post the general idea for feedback here; there are some really helpful folks who weighed in on previous iterations posted here under my regular user name. I have to admit, I'm a little hesitant because while I admire so many kitchens I see here, the context varies so dramatically from my very high cost, small space area. But I'm hugely grateful for all the moral support and sensible advice you all offered here on this drama, and hopefully I can post in another couple days saying that it's totally, firmly, finally over with this contractor. It feels like it has been a roller coaster, and I'm ready to get off. As my husband consoled me, this only means I can spend another few months oogling kitchen magazines and playing with my own ideas. And reading GW of course. Thanks again everyone!

    Bookmark   September 10, 2013 at 8:29PM
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I look forward to hearing you have your money back! Thanks for the follow-up, we sure hope it all works out for you. Hopefully you're left a little better off than you were before, with some decent plans and ideas about who can recommend a good contractor.
(edited to add:)
Are you sure you don't want to just move to a house with a kitchen you love, or one with better remodel potential?

This post was edited by kksmama on Tue, Sep 10, 13 at 22:58

    Bookmark   September 10, 2013 at 10:56PM
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