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marciab10

Local Cabinet Business bankrupt, Lost 45K

15 years ago

I wanted to share my story, so hopefully this won't happen to others.

We started planning our build(complete custom home) almost 5 years ago.. first working with a builder,(he didn't listen to what we wanted) then decided to buy a lot and be owner/builder. We were building locally and had many friends in the trades. The whole process really went smoothly except for our cabinets.

In the early stages we had a kitchen designer plan all our kitchen and bath layouts, so we had full drawings to give out for bids. Our ogirnal budget was 75K. Our first two quotes(one Woodmode) came in between 140-150! About this time I found these boards and all the talk about using local craftsman. I also am very invoved with my local Chamber of Commerce, so we talked to a cabinet maker in our town, who's work we had seen in custom home models.

He tweeked our drawings a little and came up with a plan. For our cream painted cabinetry he was going to use Hampshire cabinets in Ohio,(very high quality), for our less used spaces, (upstairs laundry, secondary bath rooms etc, all knotty alder) we were using a less expensive brand.(Koch) They were going to build our master bath, butlers pantry, 2 islands, beverage center and mud room in house.(86k)

Last December we gave him 50% down, with a 12 week lead time. We weren't quite ready for the cabinets in March, but in April when we were ready, he told us he was going out of business. He told us 20K had been given to Hampshire(not true) We did receive the secondary cabinets(about 9K worth)- only to have that company put a lein on us at closing!(He didn't pay them, we had waivers.) And not surprising, even though we were supposed to have all our cabinets in March, none of the cabinets to be built in house were even started by April. So we received nothing for all our money down.

This guy had been in business 12 years. He was a quality craftsman, but bad businessman. With the severe slowdown in building I can see this happening to other small businesses.

I am not sure how this could have been avoided. Possibly by demanding to see where our deposit went, but to a respected business owner, that would be insulting.

I did file a complaint with the States Attorney, and we are trying to recover some $$$ with the help of our attorney, but I told him I don't want to pay him 5k to get nothing!

We ended up working directly with Hamphsire Cabinets, who were very helpful, and their cabintry and finish work is supurb. The 9k of cabinets we did receive, we ended up paying another 3500 for, to get the lein removed. And the rest of our cabinets we had built by a young guy who was working for the bankrupt cabinet maker. He has done a fine and fair priced job.. but it has taken time....

5 months and many extra $$$ later.. I did end up with a beautiful kitchen.....

Comments (20)

  • 15 years ago

    Wow Marcia...an expensive, yet happy, ending. That is one fabulous kitchen. Congratulations on getting it done. Speaking as one whose 401(k) is now a 201(k), I can relate to the $$ part. ;-) Thanks for sharing your story and pictures.

  • 15 years ago

    beautiful kitchen. so sorry to hear about all the headaches and lost $$. you got great results - love it!

  • 15 years ago

    Thank you for sharing your story. That cabinetmaker must have broken your heart at that stage in your build. How fortunate, even though so expensive, that you were able to work things out and still have gorgeous cabinets throughout your home.

    And what a home! Marcia, your home is AWESOME! I looked at your albums and followed your build progress. You folks built yourselves one amazing home. Room after room, space after space, inside and out, you have fabulous details and design everywhere. (OMG, but I kept thinking about how many kazillion decisions you hadda make throughout your construction!) Please share more details about everything in your house -- SF? flooring materials? lighting? If you've moved in, do you have new pix to share?

    Enjoy your new home. It really is fabulous.

  • PRO
    15 years ago

    It sounds like you went through a lot of money and heartache to get to where you are today, but your kitchen certainly is beautiful! I would love cooking and entertaining in a kitchen like that!

  • 15 years ago

    marcia, thank you for sharing your story. I'm sure that it was a painful journey to get into your new kitchen! But, it is beautiful now and you have learned a lot, no doubt.

    Could you share with us what you feel are the most important lessons that you learned through your struggle, and really your entire homebuilding process? We are beginning a whole house remodel and it is very helpful to hear from those that have gone before me.

    Wishing you the best and hoping that your attempts to recover some of your money have a positive outcome.

    Sandy

  • 15 years ago

    Gorgeous kitchen, marcia. Sorry about the headaches; we almost had the same.

    Use the new kitchen well.

    Judy

  • 15 years ago

    Fabulous kitchen, but the major lesson here is to not pay 50 percent down to any contractor. There is no reason for them to need that much of a deposit-- they should have credit to buy supplies. Sorry you had to go through this, but thanks for sharing so others can learn. Is there anyway to sue him now?

  • 15 years ago

    Insist on writing your check for the cabinets out to the contractor AND the cabinet company. That way, your materials are paid for.

    Anytime you're thinking about hiring a contractor, check with your state authorities online to see the status of his license. Here's the link for my state:

    https://fortress.wa.gov/lni/bbip/Search.aspx

    This link will show you if his license is valid, if his insurance and bond are in good standing, and if any claims have been made against him.

    You can no longer trust word of mouth alone in these challenging times. My husband is a subcontractor, and he just got stiffed by a general contractor last July. The poor homeowner used him for her kitchen remodel. He insisted on 50K upfront. Several of his subs did their work, but didn't get paid. The general stopped going to the homeowner's house. I'm sure this homeowner ended up with several liens against them.

    My husband worked for this guy because one of his regular contractors told him that "this guy's money is good". Had we checked the above website, we would have seen that he had two claims against his business due to non payment. Luckily for us, we filed suit quickly against his bond company, and we'll finally get our money next week. The other subs on that job probably won't be so lucky.

    People out there are getting desperate, so protect yourself.

  • 15 years ago

    alls well that ends well...and your kitchen certainly did! i'm sorry for all of your troubles. i hope it doesn't taint any enjoyment you should be getting out of your kitchen.

  • 15 years ago

    good advice doris. We are still planning our kitchen remodel and will do our research before we hire a soul.

    Can I ask about the cost of that beautiful backsplash behind your cooktop?

  • 15 years ago

    What a terrible experience!!! It must have been traumatic for you. But, you have an exceptionally beautiful kitchen; at least it didn't stop you from getting it in the end.

    Enjoy it!

  • 15 years ago

    How traumatic! And yet how dramatically beautiful your kitchen is!

    We are trying to finish our kitchen after our kitchen company went bankrupt. We ordered cabinets, Tigerwood flooring and granite through them. Still wondering if we will receive a lien from the fellow who installed the hardwood floors... as I'm guessing he never got paid. Not sure how that works, as I wasn't dealing with him directly...

    But, we are also waiting for the carpenter we hired to finish things up- started end of August and was supposed to take two weeks, we also have given him 50% down, I sure hope he ends up delivering!!!

    We are also in the process of getting estimates for a new furnace and heat pump. I'm now leaning towards an established company rather than an independent contractor- it's so scary these days!!!

  • 15 years ago

    Thank you all for your kind comments about our kitchen, which we do love the way it finally turned out. I just really want others to beware... and hopefully don't get in the same situation we were..

    oofasis & busyme

    I just posted a lessons learned on the home building forum
    (link)thought it more appropriate over there.
    We have not moved in yet.. hope to be in within the next few weeks.. sf is just under 5000. Our house is a 1 1/2 store-1st floor master. Floors mostly handscaped walnut. Will add finished pic to my ablum when we are finally done.

    doris- thank you so much for your valuable suggestions. I hope you get your reimbursement.
    In our area all our quotes for cabinets wanted a 50% upfront charge. So it didn't seem odd. This guy just used our money to pay for the last guy and his pyramid crumbled in the spring.. with us losing out. but your idea of co-paying is a great idea. He wanted our downpayment for his subs...

    raehelen- best of luck in finishing your kitchen- without added expense

    Here is a link that might be useful: lessons learned-owner builder

  • 15 years ago

    missed a few questions-
    rebccah- the backsplash we DIY'd.. came up with some ideas after I posted on this forum! Originally was going to go with a mosiac picture, but DH talked me out of it. Cost for the materials for Kitchen and Butlers pantry backsplash not shown) was about 1800.

    {{!gwi}}

    I have always loved the glass tiles and was thrilled when we found a way to work them into my old world kitchen.

    allison- we are trying to recoup.. but our attorney is not optomistic.

  • 15 years ago

    For those of you still seeking bids on future work, please shop around. I honestly don't believe any contractor should ask for money upfront unless he wants to pay for a big ticket item like the cabinets, and then you can add them as the payee, too. If he wants money upfront to pay his employees, a red light should go off in your head.

    My husband NEVER asks a homeowner for money upfront. Even for materials. As someone mentioned earlier, contractors have charge accounts for materials, and payment isn't due for a month. If your contractor's business is solid, he'll have enough money in his payroll account to make sure his employees can get paid until your job is done.

    I know there are some situations where you're not going to be able to get around paying upfront (we had to have our driveway paved recently-they insisted on money upfront-I guess it would have been hard to take the asphalt back if my check was no good, huh?) :) I'm just saying, be careful with your money, and get as educated as you can.

    Raehelen, don't wait on your carpenter. Start nagging him. Make him put you first. He's floating on your money.

  • 15 years ago

    As a cabinet guy it's a double edged sword. lots of us have been stiffed by home owners that ran out of money and especially by GC's. When I build a kitchen that is special for a given home, I can't really sell it to the next customer if I get stuck with it. Some will say that 50% down is to much. I say it shares the risk on both sides of the contract. If I have to finance someones project, I would have to charge extra for being a bank. It's not that I can't afford to finance it, but more that the customer is sure of what they want and ready to pay for it.

    I ask a 10% good faith deposit if I am not ready to begin the project at the time. Then the remaining 40% when I order in their materials.

    The sad part is I bet he knew he was in trouble when he took your money. If I were you I would go after him more for principle than anything else. It is quite possible that he got stiffed by someone else that led up to this problem though.

    Good luck.

    Kenneth

  • 15 years ago

    I don't understand why States haven't passed laws requiring payments to GCs that are to cover subs to be put into escrow (or something similar). That way, the homeowner pays the money, the GC doesn't have to do everything on credit, but the funds go to the right recipient. It's absurd that homeowners are subject to paying GCs and to liens if the GC doesn't pay his subs.

  • 15 years ago

    Despite your horrible experience and loss, your kitchen is absolutely gorgeous. I'd love to see more pics and here about the specific details of your kitchen when you get a chance. It is elegant and classy yet, so warm and welcoming. You did a great job despite the obstacles. Thank you for sharing.

  • 15 years ago

    Your kitchen is just beautiful! I am so sorry for your ugly experience.

  • 15 years ago

    Hello,

    I am a freelance writer working on a story for the Associated Press offering advice to homeowners on how to avoid situations like this. I think we will see more companies going out of business during this economic downturn. I'd love to chat with you about your situation.
    Are you interested in talking with me? If so please email me at mmeldut@aol.com
    Thanks,
    Melissa