Anybody in Construction??

[sski]

There must be someone out there who's a contractor.

I'm in the process of building a new house and its at a standstill due to a dispute between my builder and myself.

I'm told general rule of thumb is that the house is deemed 75% complete once all the dryway is taped and sanded. All the stuff that logically preceeds that is done (foundation, rough in plumbing & electrical, windows, doors, siding, roof etc). Work to complete is basically inside now. (Kitchen, bathroom, flooring, paint, trim etc)

He thinks the work is ahead of the payments but I think the payments are ahead of the work. A perfect contract that mapped every dime to every nail driven would be wonderful but its not that detailed.

So back to the original question: "Is the place 75% at drywall??" The approach I'm taking is that he only has 75% of the money at that point.

[N_Jay]

Originally posted by sski
There must be someone out there who's a contractor.

I'm in the process of building a new house and its at a standstill due to a dispute between my builder and myself.

I'm told general rule of thumb is that the house is deemed 75% complete once all the dryway is taped and sanded. All the stuff that logically preceeds that is done (foundation, rough in plumbing & electrical, windows, doors, siding, roof etc). Work to complete is basically inside now. (Kitchen, bathroom, flooring, paint, trim etc)

He thinks the work is ahead of the payments but I think the payments are ahead of the work. A perfect contract that mapped every dime to every nail driven would be wonderful but its not that detailed.

So back to the original question: "Is the place 75% at drywall??" The approach I'm taking is that he only has 75% of the money at that point.

Do you have a hold-back?

You are going to have to rely on whatever the contract says. If it does not define 75% but requires a 75% payment, you are up to coming to some agreement now.

Keep your eye on the goal, 100% house and 100% payment. Don't get hung up between, that in the end will not mean much.

There is also some value to being on good standing with the builder.
You may win this argument to only have larger issues later.

No, I am not a builder, but I did design and help build my own house.
I held the construction loan myself, so these types of issues never came up.

[sski]

Do I have a hold back - yes. The remaining 25%. I'm in control of all the money. The bank has already advanced me all the funds on an unsecured credit line.

[N_Jay]

Originally posted by sski
Do I have a hold back - yes. The remaining 25%. I'm in control of all the money. The bank has already advanced me all the funds on an unsecured credit line.

So if he does not get the remaining 25% until acceptable delivery, what has caused the issue?

[sblvro]

I did build and design my house too and was in control of the disbursement of funds to the builder. 75% or not it is better to build a better relationship with your builder. You signed the contract anyway and if 100% funds=100% house, what is the issue? It depends on what kind of kitchen, bathroom, landscaping you plan to spend.

[sski]

Sorry, I misunderstood. There is no holdback defined in the contract. What I meant is I still have 25% of the funds. There are items from previous phases still incomplete and if I advance more funds the list of incomplete items grows. The builder will not lift a hammer unless he gets more money.

Having said that there a provincially defined hold back amount (10% ??) for about 45day after completion.

I do not at this point plan to take the project to completion with this builder. I need to get squared up so I have enough budget to complete.

If you want to know where I got the 75% figure that comes from the bank. If this project was being financed via a construction loan, this would be a non-issue. Mind you some builders will not work with a client if the project is being done via a construction loan because now the bank has control.

[N_Jay]

Originally posted by sski
Sorry, I misunderstood. There is no holdback defined in the contract. What I meant is I still have 25% of the funds. There are items from previous phases still incomplete and if I advance more funds the list of incomplete items grows.

Having said that there a provincially defined hold back amount (10% ??) for about 45day after completion.

I do not at this point plan to take the project to completion with this builder. I need to get squared up so I have enough budget to complete.

I would guess that if you change builders you are going to go over budget.

If you are looking at breaking the contract, I would contact a good contract lawyer and not rely on advice from here.

[sblvro]

Originally posted by sski
If this project was being financed via a construction loan, this would be a non-issue. Mind you some builders will not work with a client if the project is being done via a construction loan because now the bank has control.

That's what I had, a construction loan. I would consult a lawyer, too.

[N_Jay]

Originally posted by sski
If this project was being financed via a construction loan, this would be a non-issue. Mind you some builders will not work with a client if the project is being done via a construction loan because now the bank has control.

If a builder will not work with a construction loan, I would not work with that builder!

[gryphon75]

I am a contractor. If your house is to the stage where the exterior is finished, and all that is left inside is trim, paint, floor and final plumbing, electrical, hvac. Then I would be looking at a 75% done house. There really is not alot left to do. As far as the kitchen cabinets it all depends on how your contract was written. Were you given an allowance for these items, were you going to pay for them yourself? On contracts I write electrical, plumbing, hvac, cabinets, trim are all written as allowances. Also one cannot always assume that when the drywall is sanded the job is 75% done. We have built many houses wher the completion timeframe was going to fall during the cold months. It gets awful hard to complete brickwork when temperatures are below freezing. Final thought is that if this person was worked well with you throught the process then are they really trying to get some extra money from you? Or are they just looking for the funds they need to pay their subs, and still put food on the table. Just my opinion.

[sski]

Originally posted by gryphon75
I am a contractor. If your house is to the stage where the exterior is finished, and all that is left inside is trim, paint, floor and final plumbing, electrical, hvac. Then I would be looking at a 75% done house. There really is not alot left to do. As far as the kitchen cabinets it all depends on how your contract was written. Were you given an allowance for these items, were you going to pay for them yourself? On contracts I write electrical, plumbing, hvac, cabinets, trim are all written as allowances. Also one cannot always assume that when the drywall is sanded the job is 75% done. We have built many houses wher the completion timeframe was going to fall during the cold months. It gets awful hard to complete brickwork when temperatures are below freezing. Final thought is that if this person was worked well with you throught the process then are they really trying to get some extra money from you? Or are they just looking for the funds they need to pay their subs, and still put food on the table. Just my opinion.

Thanks for your input.

The contractor has done quality work up until now. I plan to take on the finish work myself. We were originally going to take the project to finish but it has already been 7 months and we still are not at the tape and sand stage. I already have subs lined up to complete this house inside 4-6 weeks. I need to get square with the contractor and send him on his way. I just needed to see that I was not totally off base with my 75% assessment.

[larryziegler]

Originally posted by sski


Thanks for your input.

The contractor has done quality work up until now. I plan to take on the finish work myself. We were originally going to take the project to finish but it has already been 7 months and we still are not at the tape and sand stage. I already have subs lined up to complete this house inside 4-6 weeks. I need to get square with the contractor and send him on his way. I just needed to see that I was not totally off base with my 75% assessment.

I have no idea what kinds of laws are in place with regards to warranties on completed homes in Canada, but here in Calif, you would be playing with fire doing that. Here, a home builder (the GC) is responsible for the house for 10 years, like it or not, and doing as you state would really put you at a legal disadvantage with any problems with the completed home. Best of luck to you on this.

[waynerd]

Seven months! whoa! Either he's slow or you've got a very large house. Our first house was about 1700 sf and was done in about 4 months. A buddy of mine built his house himself (well, he was his own GC, using subs from his "real" job on evenings and weekends) and finished his 3600 sf house in about 10 months, doing all the paint and finish carpentry himself (he and his wife).

If he's any kind of decent contractor, he should have time cards and material receipts to know how much he has spent on the house thus far, and estimates of labor and materials required to finish. I'm guessing adding those together is probably more than your contract price, and why he wants paid more. You could also look at how much it'll cost you to finish with your subs and subtract that from the contract price as an estimate of how much he should be owed. Again, allowances for finishes should be considered.

You didn't mention anything about change orders to this point, either. Did he come back asking for more for "unforeseen items" that you felt he should have seen? Were his allowances unrealistically low? Or did you make any changes that would have cost more, such as having to reframe, or additional electrical, etc.? Again, he should have timecards and material receipts for any changes you've made.

I used to be a commercial construction estimator, but I got tired of dealing with all the idiots and a$$holes everyday....

[sski]

Change orders...

Yes, we made some changes which we knew would would cost more. I'll give you an example of what I'm dealing with. We made changes to floor plans a few times before we put a shovel in the ground, so we are just talking about drawings here. The bill from the GC for that was $3600 extra.

The original drawings (which are included) were $2100. The charge for changes was $1200. The GC wants an extra $3600 just for the changes...wtf...The total bill for the original plus the changes was only $3300.00.

So he's basically charging me for all the drawings plus he pockets $300.

[dpierson]

Originally posted by sski
Change orders...

Yes, we made some changes which we knew would would cost more. I'll give you an example of what I'm dealing with. We made changes to floor plans a few times before we put a shovel in the ground, so we are just talking about drawings here. The bill from the GC for that was $3600 extra.

The original drawings (which are included) were $2100. The charge for changes was $1200. The GC wants an extra $3600 just for the changes...wtf...The total bill for the original plus the changes was only $3300.00.

So he's basically charging me for all the drawings plus he pockets $300.

Just because you made changes before a shovel hit the ground does not mean your only cost will be for the drawings. Those changes in the drawing can add costs. Examples could be moving a bathroom which adss more piping. A door opening gets larger which means the header gets beefier. What appears to be a small change on paper can result in "real" costs in the field.

No with your question: Did you contract with the builder include any schedule of values whcih defines the value of the finishes you wish to complete? Is there a reason you did not have the builder pricie the construction with the idea you would finish the project? If the answer to both is no you have lost leverage becaus eyou will never get back the full value on a deductive change order.