Terminating Builder

[Texas Ranger]

I’ve had a tough time with my builder lately and wanting to terminate contract. Besides not getting along, poor communication, and lack of attention to detail, I feel I have to constantly watch over his shoulders. I should have known better to hire a family-ran pool business, as the owner’s son is, I feel, crooked and sneaky. I’ve caught three things thus far that he’s tried to get by me and it’s really irritating. Makes me wonder what I haven’t caught and if any corners are being cut I don’t know about…

I’m about to get gunite and I paid some money already. What I’m not sure about is how others have done it and avoided court action. I’m having my contract reviewed, but I want to cut ties and terminate builder. Has anyone successfully done so, specifically in Texas, and how did it end up?
I’ve been in project management for many years and have contacts to finish it up. I’m sure I could complete the pool and save some money, although it may take a little longer. The final straw was stalling next phase until he gets paid. Loan company pays within three days of each major stage, so not sure how much quicker they want paid. It’s been slowly boiling for a while and now it’s gotten to the point where the trust is gone, as is the working relationship.

 

[Toxophilite]

See if there's a convenience clause in the contract. It's not too uncommon to have, though rarely executed. Basically, it's more to protect the contractor from runaway cost increases, but if had it, for good and valid cause, either party can move on.

 

[Texas Ranger]

Thanks. I didn’t see a convenience clause embedded anywhere within. I’ll dig through it because there’s verbiage about attorneys fees and all that. Not sure if either party can terminate without penalty, but I hope so.

 

[Toxophilite]

Your finance company has an interest in the outcome, so I would consult with them, and get an attorney to review your contract and rights under it. You may have to settle up to time and expense of contractor to date, and it might not be to your best satisfaction, but there's always an out. The best method is to avoid getting into a protracted legal battle that ends up costing more than the job.

 

[Texas Ranger]

Your finance company has an interest in the outcome, so I would consult with them, and get an attorney to review your contract and rights under it. You may have to settle up to time and expense of contractor to date, and it might not be to your best satisfaction, but there's always an out. The best method is to avoid getting into a protracted legal battle that ends up costing more than the job.

Valid points on all. What would happen to the funds already released up to this point? There’s no way the builders have 25% of total cost spent so far.

 

[Toxophilite]

Good chance the contract specified arbitration, so if that's where it ends up, your attorney will know steps, and disposition of everything to date would be decided by third parties. If not, lawsuits don't come with price tags. Pressing is that you have a hole in ground that needs gunite soon before it gets washed out and needs remediation to get back later. I don't think anyone can know enough of the moving parts to all of it to give you steps to take, but just know your situation and your costs when making final decision.

 

[JamesW]

You can terminate a contract anytime you like and the builder might accept it or they might ask for uncompensated expenses.

They might ask for any expenses related to the contract including any lost opportunity.

For example, if they declined work due to their commitment to doing your job.

You can ask them to just walk away or you can offer them an amount to walk away or you can ask for some or all of your money back.

You can ask for more than your money back if you feel like that is fair.

What do you feel is a fair resolution to cancel the contract and what is your basis for that opinion?

They can file suit against you and you can file suit against them.

They might file a lien against your property and you might be able to dispute this directly or through a civil case.

The question is, if you presented your case before a judge and the builder presented their case before a judge, would you be able to prove by a preponderance of the evidence that your position is correct and fair?

What evidence can you provide that substantiates your claims and your position?

Are there obvious deficiencies that justify you cancelling and walking away?

If there are no obvious deficiencies, you might need a qualified professional expert to do a professional evaluation and give a professional written report.

If they don’t comply with what you ask, you can still do a lot to persuade them to walk away like filing complaints with anyone and everyone you can think of.

Is the company properly licensed and insured?

Is the company a Inc., LLC, sole proprietorship or what?

Are they registered with the state corporation commission and are they current in their filings?

Are they bonded?

Does your state have a contractor's insurance fund for projects that go bad?

Who can you complain to?

1) The state attorney general.

2) The city attorney general,

3) Any trade association they belong to.

4) The BBB.

5) The chamber of commerce.

6) Their insurance company.

7) The state contractors licensing board.

8) Google reviews.

9) Yelp reviews.

10 Angie’s list, Home Advisor, Porch, Nextdoor, Thumbtack etc.

11) Their bond company.

12) Any manufacturer they use.

13) The FTC’s Bureau of Consumer Protection.

14) The business license division.

15) The building permits and inspections department.

16) The state corporation commission.

17) Local news channel "On your side" team.

And, anyone else you can think of.

 

[Texas Ranger]

Just a quick update and questions…met with pool builder/owner again per his request. Didn’t go as planned, and we both agreed it may be best if we part ways. Owner’s son was present and made things more difficult than they should have been, but long story short no penalty for getting out of contract, but I’m being told there would be no monies returned to me, and there would be a stipulation about online reviews, possibly “other stipulations”. As the contract called for a % due after gunite, that’ll put me almost 1/2 of the total cost of the pool. I’m not going to agree to that, because potential customers should know the good, bad, and ugly. It also wasn’t part of my original contract. They will also not agree to warrant any work done so far. Owner was willing, but son stepped in and said no way. So, that’s how that went.

Here’s where I’m at: up to watering gunite for next several days. Still have tiles, electrical, plumbing tie in, grading, plaster, stonework, and a few other items. Without going through this again, how challenging has it been to finish it up myself (sub it out) based on experience from those who have done it from this stage? Also, not sure how the funds would work, being they would have 1/2 of the draw cost already if I release the % for gunite.

 

[Flying Tivo]

Fortunately Gunite is done or is it Not?, the rest can take time. Subing it out is ok if you have time.

 

[Texas Ranger]

Yes, gunite is finished.

 

[kimkats]

Get EVERYTHING in writing!!! Email is best, text is next. If you do have a face to face conversation then do a follow up email along the lines of "On xxday we (stating names) talked about xyz"

 

[JamesW]

I’ve been in project management for many years and have contacts to finish it up. I’m sure I could complete the pool and save some money, although it may take a little longer.

Without going through this again, how challenging has it been to finish it up myself (sub it out) based on experience from those who have done it from this stage?

It depends on your experience and ability.

You indicate that you have experience and contacts.

How much has been paid so far?

What do you feel is a fair settlement for them to walk away?

Do you feel like they should return money to you?

If yes, how much?

Do you feel like you should pay more?

If yes, how much?

Or do you feel like the amount paid so far is fair and they don’t owe you and you don’t owe them?

Is the quality so far acceptable?

Have they delivered any equipment?

 

[JamesW]

Remember, you are firing them.

They are not in charge and they cannot dictate terms to you.

You have to decide what you feel is fair and then let them know.

They can either accept your proposal or they can counteroffer.

If you cannot reach a mutually agreeable settlement, you both have to decide if you want to take an enforcement action such as filing a lawsuit.

A lawsuit cost a lot of time and money and both sides need to consider the cost in time and money vs. the potential payoff and the likelihood of actually achieving the potential payoff.

You can try mediation or arbitration if you prefer that over a lawsuit.

They can probably file a mechanic’s lien and you can possibly contest that directly or through a lawsuit.

If a subcontractor has not been paid, they can file a lien.

Make sure that you have proof that all subcontractors and material suppliers have been paid in full and that the subcontractors and material suppliers sign a release of lien rights.

If you pay the contractor and they have not paid the subs or material suppliers, the subs and material suppliers can come to you directly and ask to be paid.

You can file complaints with various entities as I indicated previously.

Have you verified their qualifications like all required licenses, insurances, bond etc?

Does your state have a contractor's recovery fund?

Have you consulted with an attorney?

 

[JamesW]

Have you looked up the civil and criminal court records for the company and for the owners?

Based on the fact that you are experiencing substantial delays and extra costs related to needing to finish this yourself, in my opinion, you are entitled to ask for substantial penalties if you can prove that the builder deserved to be fired.

Is there evidence that you can show that the builder deserved to be fired?

What specifically can you show that indicates that they deserved to be fired?

 

[Nikilyn]

You are going into the owner/builder route now. The ones here in AZ that I know who have done it, myself included, have gotten their pools completed way before those I know using a builder.

 

[TX2OBX]

Not to add to the stress but want to point something out. IF you go the owner builder route be carful with the lender. Your payment terms sound like Lyon financial (4 25% draws) who make it very clear they dont allow owner builds. Not sure how they will work it out in this regard. I almost went with them but ended up doing a fixed rate home equity loan. Still it was tempting at unsecured loan of 4.99% though. But the equity loan is tax deductible.

 

[Texas Ranger]

Not to add to the stress but want to point something out. IF you go the owner builder route be carful with the lender. Your payment terms sound like Lyon financial (4 25% draws) who make it very clear they dont allow owner builds. Not sure how they will work it out in this regard. I almost went with them but ended up doing a fixed rate home equity loan. Still it was tempting at unsecured loan of 4.99% though. But the equity loan is tax deductible.

Yup, I have Lyon and they told me they do not allow owner-builds. I have the funds to finish it out from here, but just not sure how I would get any monies owed back to me from builder. 45000 is a lot to walk away from for what little has been done.

 

[Texas Ranger]

You are going into the owner/builder route now. The ones here in AZ that I know who have done it, myself included, have gotten their pools completed way before those I know using a builder.

I’ve heard and been told the same thing. Did you end up firing your builder? Did they impose any terms about “not leaving reviews” on their company? Did you get refunded any difference?

 

[Texas Ranger]

Have you looked up the civil and criminal court records for the company and for the owners?

Based on the fact that you are experiencing substantial delays and extra costs related to needing to finish this yourself, in my opinion, you are entitled to ask for substantial penalties if you can prove that the builder deserved to be fired.

Is there evidence that you can show that the builder deserved to be fired?

What specifically can you show that indicates that they deserved to be fired?

It’s mainly poor communication, lack of paying attention to details, and personality conflicts. I’ve had to go back and correct things due to poor oversight. Again, it’s family ran, so the owner is going to protect his company and family. You can only go up the chain so far.

 

[Texas Ranger]

Remember, you are firing them.

They are not in charge and they cannot dictate terms to you.

You have to decide what you feel is fair and then let them know.

They can either accept your proposal or they can counteroffer.

If you cannot reach a mutually agreeable settlement, you both have to decide if you want to take an enforcement action such as filing a lawsuit.

A lawsuit cost a lot of time and money and both sides need to consider the cost in time and money vs. the potential payoff and the likelihood of actually achieving the potential payoff.

You can try mediation or arbitration if you prefer that over a lawsuit.

They can probably file a mechanic’s lien and you can possibly contest that directly or through a lawsuit.

If a subcontractor has not been paid, they can file a lien.

Make sure that you have proof that all subcontractors and material suppliers have been paid in full and that the subcontractors and material suppliers sign a release of lien rights.

If you pay the contractor and they have not paid the subs or material suppliers, the subs and material suppliers can come to you directly and ask to be paid.

You can file complaints with various entities as I indicated previously.

Have you verified their qualifications like all required licenses, insurances, bond etc?

Does your state have a contractor's recovery fund?

Have you consulted with an attorney?

I have consulted with an attorney. No concerns other than asking for invoices for work performed thus far and trying to recoup any remaining funds. He wasn’t keen on the owner making a stipulation that I could leave online reviews. The owner stated if I didn’t agree to that, then he wouldn’t let me out if the contract. That alone is telling and concerning.