Real Estate Investor · Tujunga, CA · Member since 2013 · 18 posts · 4 votes
Question: How do you deal with a contractor who balks at doing repairs that an inspector says are "safety issues" and is weeks behind in the rehab? It would be real easy to be hard nosed, but he is also working on another project with a much higher profit margin. He is holding my permits (which buyers are asking for copies of), too. I'm trying to be diplomatic but at a point my patience runs out...right about when sells are threatened. I like the guy and I'm trying to work it out, but 6 weeks behind on a 4 week rehab is killing my profits.
I'm never working with the guy again, but the $2M property that he is currently working on makes me gun shy about pulling out the contract and going Mr. Lawyer on him.
Rental Property Investor · Holley, NY · Member since 2011 · 507 posts · 347 votes
13y
Originally posted by Mark Mynhier:
I have a contract in place with performance penalties, including timeliness. I could exercise it, but since he is working on a home with profits over $250K I don't want the smaller venture to negatively impact the larger venture. I guess I could have better phrased the question...it is more of an issue of learning the best way to make him a team player and want to deliver in a timely fashion instead of forcing him to deliver in a timely fashion.
You are trying to solve the wrong problem, in my opinion. You may like the guy, but he is dragging your business down. If he "wanted" to deliver in a timely fashion, he would. You will likely need to find a new contractor for future work, or you will have to enforce the current agreement to the letter and see how he reacts. If he shapes up and expresses interest in working with you again, he might be a keeper. Chances are, when you dig in your heels he will go out of his way to make it worse. That will confirm that he should never work for you again.
In the short-term, I would definitely seek counsel on what you can do. This is a significant amount of money and deserves proper professional handling as soon as possible.
Real Estate Investor · Tujunga, CA · Member since 2013 · 18 posts · 4 votes
13y
I have a contract in place with performance penalties, including timeliness. I could exercise it, but since he is working on a home with profits over $250K I don't want the smaller venture to negatively impact the larger venture. I guess I could have better phrased the question...it is more of an issue of learning the best way to make him a team player and want to deliver in a timely fashion instead of forcing him to deliver in a timely fashion.
Rental Property Investor · Holley, NY · Member since 2011 · 507 posts · 347 votes
13y
Originally posted by Mark Mynhier:
I have a contract in place with performance penalties, including timeliness. I could exercise it, but since he is working on a home with profits over $250K I don't want the smaller venture to negatively impact the larger venture. I guess I could have better phrased the question...it is more of an issue of learning the best way to make him a team player and want to deliver in a timely fashion instead of forcing him to deliver in a timely fashion.
You are trying to solve the wrong problem, in my opinion. You may like the guy, but he is dragging your business down. If he "wanted" to deliver in a timely fashion, he would. You will likely need to find a new contractor for future work, or you will have to enforce the current agreement to the letter and see how he reacts. If he shapes up and expresses interest in working with you again, he might be a keeper. Chances are, when you dig in your heels he will go out of his way to make it worse. That will confirm that he should never work for you again.
In the short-term, I would definitely seek counsel on what you can do. This is a significant amount of money and deserves proper professional handling as soon as possible.
Laurel, MD · Member since 2013 · 82 posts · 21 votes
12y
I'm late to the game here, but let me tell you how I, a general contractor, enforce my subcontracts. @Mark Mynhier , I can tell you want this to be cooperative, so this is what I'd do.
Meet with him and develop a recovery schedule. Identify all remaining features of work, and agree to a schedule to get done on an activity by activity basis(date when tile completes, date when paint completes, etc.). Let him know that this is worse than the contracted schedule but that you want to work with him so that both companies can succeed. Tell him that you do not want to enforce liquidated damages as allowed by your contract, but that failure to comply with the recovery schedule will force you to do that.
I would recommend doing something similar for the larger job right off the bat.
And finally, you'll need to follow up in a weekly or biweekly basis to compare actual progress to the agreed upon schedule. Hope this helps.
Investor · Shorewood, IL · Member since 2011 · 79 posts · 18 votes
12y
My 2cents, do you pay him for work performed or do you pay him 1/2 down ahead of time?. I find that paying for work performed gives you options to get new contractor to continue job and minimize long off track timelines.
Specialist · Spokane, WA · Member since 2014 · 97 posts · 38 votes
12y
@Mark Mynhier If he is licensed and you communicate in a very professional manner that you want to resolve the issues without involving your rights to redress his failures to perform, he may get the message. Licensed, bonded GC's do not want legal issues. Perhaps a friendly but firm letter stating that you didn't have your attorney write this one, would get his attention. GC's can be like Genmini twins: there is the field and then there is legal reality. Be professional and be very firm, this is your career.
My grandmother lived in Tujunga. We went there twice a year for the holidays (40 years ago). I'll bet it has really grown up.
Real Estate Investor · Tujunga, CA · Member since 2013 · 18 posts · 4 votes
12y
The project is since finished and I learned a lot from it. I'm glad that @Matt Vaughn , @Jaime Frausto and @Patrick T. responded, since it helped me gain more insight. I'm still a novice at this venture...I'm only on my 6th flip and have only been doing it for 10 months...so I'm trolling the forums and trying to learn more and more.
This is a great place for feedback and helping each other and I just wanted to say "Thanks"