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Old 08-16-2008, 04:11 AM   #1
minn_stat
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Default Dispute with home builder

So I'm set to buy a newly built home early next week, and I'm pretty unhappy with the builder. I'm looking for some advice - maybe even from a few of the lawyers who frequent CG, although non-legal advice is welcome as well.

When we signed the purchase agreement back in June, the home was already complete. We asked the builder to put a deck on the home and complete the basement, which he was advertising to do for pretty low fixed prices as an incentive to help the house sell. As we got into the process of providing specifics of what we wanted done, things were sometimes pretty hectic, but we always tried to always ask, "will this cost extra, and if so, how much?"

In early July, we sent an email to them (thru our agent) expressly indicating the things we wanted done, and our understanding of the price for these items. About two weeks ago, we were trying to get a final price into our loan documents, so we sent out another email, again stating what we understood had been/would be done, the costs involved, and asking the builder to please verify the costs. In both cases, they added no corrections; in the 2nd case, they stated that they reserved the right to adjust the prices based on the final bills from the subs.

So we just received the final bill, and for the electrician's work, which we had understood would cost $325, they claimed we owed them $1950. We tried to approach them about this discrepancy in a non-confrontational way, but they basically said "shove it, you have to pay it".

So now, I'm fairly pissed, largely due to the principle of not letting pricks get their way, but also because $900 is a fair sum of money to me. One item in particular is galling to me. They put in a security system and charged us $900 for it. We had mentioned the possibility of having one at one point early on, and asked them to provide us a quote. They never did, but apparently assumed we wanted it. The only problem is, there is no mention of it anywhere in the purchase contract, any of the addendums, or even in any of the email communications.

So my question is, what are the options available to me? It seems to me that I have every right to show up at closing with a check for the bill, less $900, and expect them to complete the close, as per the contract/addendum. They seem to think if I do this, I'll have refused to close, and therefore, I'll be in breach of contract if I do so, and they will file suit against me. It seems to me that they will be in breach, since I'm willing to close according to the conditions of the legal documents.
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Old 08-16-2008, 04:07 PM   #2
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I'm not an attorney, and don't have the experience to offer any meaningful advice (sorry), but don't you have an attorney working for you on this? We've had an attorney for both of our home purchases, cost us a couple hundred bucks, and figured they were for situations like this.
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Old 08-16-2008, 05:52 PM   #3
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If those change orders are not included in the addendum then I wouldn't think you'd be held to it. I was a home builder a few years ago before the collapse. I would routinely meet with the home owner and our sales agent to go over changes such as these. All changes went into an addendum and was signed before any work could be started. It was a CYA measure for us as builders because we didn't want to run into issues like your security system issue. And in the few instances where I did end up running into these types of situations the home owner either kept what we installed without charge or we would go through great lengths including remodels and moving walls to make things right.
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Old 08-17-2008, 03:47 AM   #4
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I have a real estate agent who overall has been very good, but I've not been impressed with his help on this (not that I've been expecting him to be a legal expert). We did not separately get an attorney, although in hindsight, we obviously should have.
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Old 08-17-2008, 04:47 AM   #5
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Quote:
Originally Posted by minn_stat View Post
I have a real estate agent who overall has been very good, but I've not been impressed with his help on this (not that I've been expecting him to be a legal expert). We did not separately get an attorney, although in hindsight, we obviously should have.
your real estate has no incentive to do anything that would delay or prevent a deal. Remember that.
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Old 08-17-2008, 11:25 AM   #6
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Quote:
Originally Posted by Surfah View Post
If those change orders are not included in the addendum then I wouldn't think you'd be held to it. I was a home builder a few years ago before the collapse. I would routinely meet with the home owner and our sales agent to go over changes such as these. All changes went into an addendum and was signed before any work could be started. It was a CYA measure for us as builders because we didn't want to run into issues like your security system issue. And in the few instances where I did end up running into these types of situations the home owner either kept what we installed without charge or we would go through great lengths including remodels and moving walls to make things right.
The dumb thing is, without going into all the details - I can see their point of view. They weren't trying to rip us off, they were just trying to do what they thought we wanted. And they did do the work, and we would benefit from it. So I didn't just want it for free. I just wanted them to see where they had not dealt properly with me, acknowledge it, give me $300 or $400 off of the total $1600 in overcharges, and all would be fine.

The builder did do very good work. He was in a position to get some good word of mouth. He will not get it now, and if anyone talks to me about building, I'll be quick to recommend that they not go with this builder if they want to avoid headaches. Instead of getting a pretty positive recommendation. Not much business sense, I'd say.
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Old 08-17-2008, 01:38 PM   #7
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Quote:
Originally Posted by minn_stat View Post
The dumb thing is, without going into all the details - I can see their point of view. They weren't trying to rip us off, they were just trying to do what they thought we wanted. And they did do the work, and we would benefit from it. So I didn't just want it for free. I just wanted them to see where they had not dealt properly with me, acknowledge it, give me $300 or $400 off of the total $1600 in overcharges, and all would be fine.

The builder did do very good work. He was in a position to get some good word of mouth. He will not get it now, and if anyone talks to me about building, I'll be quick to recommend that they not go with this builder if they want to avoid headaches. Instead of getting a pretty positive recommendation. Not much business sense, I'd say.
I understand where you're coming from. But at the same time, you should only have to pay for what you agreed to on the contract. To be honest, the problems we always ran into were with our sales agents who would tell us they spoke with the homeowner and they decided they wanted this and that. Often times, to stay on schedule we'd take the agents word for it and begin the changes. But this bit me in the ass several times, so I refused to do work after awhile until I had an addendum and a ratified contract.

What was that electrician bill for? If that total the builder gave you was for finishing off the basement, it doesn't seem that unrealistic to be honest. Also $900 for the alarm system isn't bad either. Remember, most deals on security systems are like cell phone deals, where equipment and installation is offset by your service contract.
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Old 08-18-2008, 10:25 AM   #8
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Quote:
Originally Posted by Surfah View Post
I understand where you're coming from. But at the same time, you should only have to pay for what you agreed to on the contract. To be honest, the problems we always ran into were with our sales agents who would tell us they spoke with the homeowner and they decided they wanted this and that. Often times, to stay on schedule we'd take the agents word for it and begin the changes. But this bit me in the ass several times, so I refused to do work after awhile until I had an addendum and a ratified contract.

What was that electrician bill for? If that total the builder gave you was for finishing off the basement, it doesn't seem that unrealistic to be honest. Also $900 for the alarm system isn't bad either. Remember, most deals on security systems are like cell phone deals, where equipment and installation is offset by your service contract.
When we had first gone through the home as prospective buyers, the builder had left a sheet at the home offering to finish off the basement for one fixed price that was, truthfully, a good deal. There would have been no charges from the electrician except that we asked them for a surround sound speaker system that included speakers on the main floor - my wife is very musical, and loves the idea of piping music throughout the house (they quoted us $300 for the system), and an additional outlet in the mechanicals area ($25). They ended up billing us $200 for a controller for the speakers on the main floor, and $700 on the speakers. It appears they thought the $300 was for the basement speakers, and the speakers on the main floor were an additional $400. The other $100 was for changing standard lights at the bottom of the stairs into 3 canned lights (which we did ask for, but they didn't give us a quote for, so I thought it was a "same as standard" deal) and, of course, the security system.

The reason I'm focused on the security system is because there is no reference to the system anywhere, including e-mail communications. Just the one brief verbal mention of it that I referred to in my earlier post. For the other items, they are items we requested and are found in various documents.
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Old 08-18-2008, 01:39 PM   #9
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Quote:
Originally Posted by minn_stat View Post
When we had first gone through the home as prospective buyers, the builder had left a sheet at the home offering to finish off the basement for one fixed price that was, truthfully, a good deal. There would have been no charges from the electrician except that we asked them for a surround sound speaker system that included speakers on the main floor - my wife is very musical, and loves the idea of piping music throughout the house (they quoted us $300 for the system), and an additional outlet in the mechanicals area ($25). They ended up billing us $200 for a controller for the speakers on the main floor, and $700 on the speakers. It appears they thought the $300 was for the basement speakers, and the speakers on the main floor were an additional $400. The other $100 was for changing standard lights at the bottom of the stairs into 3 canned lights (which we did ask for, but they didn't give us a quote for, so I thought it was a "same as standard" deal) and, of course, the security system.

The reason I'm focused on the security system is because there is no reference to the system anywhere, including e-mail communications. Just the one brief verbal mention of it that I referred to in my earlier post. For the other items, they are items we requested and are found in various documents.
Based on this it seems that a reasonable compromise would be to pay the electrical but have them throw in the alarm system. They should eat that cost if it's nowhere in any addendum. Don't know if they'd accept that. The alternative it seems would be to have them remove everything not in an addendum.
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Old 08-18-2008, 05:32 PM   #10
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Quote:
Originally Posted by minn_stat View Post
I have a real estate agent who overall has been very good, but I've not been impressed with his help on this (not that I've been expecting him to be a legal expert). We did not separately get an attorney, although in hindsight, we obviously should have.
Have them rip it out if it's not located in an addendum. Don't pay for it especially if you did not agree to it in writing. A large amount of contractors and subs do dishonest work either through addition or subtraction don't add to this problem by giving your builder an inch especially in this market.

$900 over a 30 year loan represents a large sum of money, why financially pay for their mistake for the next 30 years?

2k for electrical work when they quoted $325? I wouldn't pay for that shit either.
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