Need Advice: Contractor Dispute Delaying Project Completion in River forest

Need Advice: Contractor Dispute Delaying Project Completion in River forest

Member since 2023 · 1 post · 0 votes

Hi everyone,

I’m looking for advice from anyone who’s faced a similar situation or has experience in this field. Nearly two years ago, I purchased a single-family home in River Forest, USA, which required extensive renovations. I hired a contractor with a solid reputation for working with international investors, and we agreed on a total cost of $495K, to be paid in stages. The contractor also committed to informing me and getting my approval for any cost changes during the project.

Unfortunately, several issues arose during the renovation:

1. Cost Overruns: After the final payment, the contractor claimed there were additional costs of $60K. I asked for proof (receipts, itemized costs, etc.), but he hasn’t provided any satisfactory documentation.

2. Delays: The project has been delayed by more than 8 months beyond the original timeline.

3. Work Quality:I hired professionals to inspect the work, and they found multiple issues and evidence of negligence in the construction.

As the situation became more complicated, I involved a lawyer and began mediation. Currently, the contractor is demanding $44K upfront to resume work and complete the occupancy permit, promising to discuss the additional costs afterward. I’m hesitant to pay such a large amount without seeing significant progress, especially given the prior problems.

Now, the contractor is threatening to file a **lien** on the property, which could cause major delays and additional expenses. At the same time, I want to complete the project quickly to sell the property and move forward.

My questions:

1. Should I continue mediation or pursue legal action (considering the time and costs involved)?

2. How complicated is the process of removing a lien, and should I focus on preventing it instead?

3. What steps would you recommend to minimize damages and resolve this issue efficiently?

I’d greatly appreciate any insights or advice based on your experiences. Thanks in advance for your help!

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  • Investor · Midwest · Member since 2019 · 353 posts · 230 votes
    1y

    Good morning Yosef, 

    Here is a solution:

    1. Take your inspection checklist and have the contractor complete the work he's already been paid for, make that part of the mediation.

    2. I wouldn't use them to complete the job, they've already shown they aren't doing quality work. I would also look at suing them for the cost / expense to finish the job. 

    3. I wouldn't pay them anything upfront...I recommend you always pay for labor AFTER the work is done. Pay for supplies upfront.

    4. Hire an inspector /independent person to manage the job site for you, someone with your best interest at heart. Make it clear that you'll only pay when that person signs off on work done. Ensure your agreement with that person has teeth so if they sign off on something that isn't right they can be held liable for it. 

    Answers to your questions:

    1. Try mediation first, lawsuits can get expensive and only the lawyers win.

    2. Removing a lien is challenging because you need the person who placed the lien to sign off to remove it. I'd make this part of the mediation process. Part of whatever agreement is they can't place a lien. I'm willing to bet you may have to pay some of their demand to ensure this doesn't happen.

    3. Have 2-3 contractors look at the job and get written estimates on what it's going to take to finish the job, correct the mistakes, pass occupancy certification etc. use those estimates in your countersuit / mediation process. 

    4. This sounds like it's going to be an expensive lesson. 

    a. You started off good with cost being paid in stages, but it sounds like you paid before you verified they actually hit their benchmarks.

    b. Hopefully you can show where he didn't honor the agreement that cost changes had to be approved...hopefully that approval was supposed to be in writing. He may have to eat those additional expenses if he can't prove he had approval prior to doing it.

    c. Consult a good real estate attorney.

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