Quote from @Bruce Woodruff:
@Duane Gunkler 1) Did your builder issue you a Change Order every time they went 'over budget' ? Did you sign these COs? 2) What does your Contract say about him running long on the schedule?
With a 'Fixed Price' Contract, you are only obligated to pay the amount on the bottom line where you both signed.......unless there are Change Orders that list what is being done as an extra, how much it is and the new total. Just because he needs more money does not mean he can legally receive it from you. Like I said, unless he has a signed CO. That's pretty black and white.
How do you feel about the additional money? Was it your fault or his fault that it was needed and spent? If you feel you have some culpability in the matter, then maybe you need to sit down and have a chat about this. Otherwise he needs to finish up and move along. Using money from one project to finish another is common, but it may be illegal depending on the state.
Another issue is this: Do you have signed releases from every sub-contractor that has completed work on the job? Like concrete, fire sprinklers or roof? Those are usually finished early on....? If you do not have releases in hand from these subs, your GC may not be paying them and using those draws from your job to pay them for other jobs.
For example, if concrete is done and the GC cannot provide you with a release, you need to stop all work right there.
You have a lot on your plate here and I would get a handle on this before you go any further. It is not too early at all to contact a Construction or Real Estate Attorney, it might even be too late. So that would be my first advice. Whatever you do, do NOT give him any more money to try and move him along.
Long time builder so PM me if you need any more help....
No change orders for any of the items that they went over budget on. There have been a couple things that we did know we were going over on, like the carpet padding and carpet for example, so we paid the extra $5K or whatever it was. We have also spent several thousand putting in a central vacuum, wiring the house for internet, etc. They only gave an absurd $3,000 for appliances, so we obviously went well over that. We have already put in about $50K of our own, above what the contracted price was. I am willing to come out of pocket some to help alleviate the rising prices of materials, but I'm not going to put in 32% above the fixed-price contract we signed. A large portion of that is them underpricing it to begin with, and mismanaging some of the steps along the way. 32% over is gross negligence on their part.
As for the contractors and liens, I am worried. I know that he has not been doing a good job paying many of them and I am very concerned about them coming back and putting a lien on the property. The contractor that framed the house is owed $67K still (that's between our house and another one they did for the builder).
A major reason for me posting this in this forum was in hopes that someone on here would have a good recommendation for an attorney or for someone with the legal background would connect with me through here.
Thanks so much for the input!
