Our house (in Wisconsin) is finished. According to the bid we
accepted, we owe one final payment of $60,000 ($53,000 plus $7,000 to
account for change requests during the construction process) to our
general contractor. Now, right at the end, he suddenly says we owe
him $73,000. He says if we don't pay it, he's going to sue us. Can
he doe this to us? Here are his reasons:
1. His estimates were inaccurate, and some of his sources for
material and labor ended up charging him more than he expected.
2. We bothered him with a lot of changes and supervision.
3. Our house is worth a lot more than we're paying him.
4. The house too him longer to build than he expected, and so he had
to pay a lot more for labor than he expected.
Here are my answers to him on each of the four issues:
1. Regarding his costs exceeding his estimates... We had an oral
agreement in the beginning that once we agreed on a project and
accepted his bid that the bid would not change--up or down. If we
made changes (we did make minor changes), we would be responsible for
our changes. If market prices on materials were to fall, we agreed
that he would enjoy the savings, but if prices went up, he would
suffer the extra charges. He called this "locking in," and that is
one of the main reasons we went with this contractor. On the detailed
written bid he provided us, and which we subsequently accepted, he
even wrote his "lock in" promise at the bottom--a few sentences.
Other than these written documents and or oral contract, we have no
official contract with him.
2. Regarding his claim that we bothered him with changes and
supervision... He never once discouraged this or said that there
would be extra charges, other than the cost of the actual changes,
which we are agreeing to pay--$7,000 for specific changes bringing the
total due up to $60,000. But he wants $73,000! As for his claim that
we bothered him with a lot of supervision and faxed notes... He never
discouraged this, and the only reason for the close supervision and
notes was because his crew made a *LOT*
of mistakes that had to be
corrected. The work was very substandard. All of this is
documented. I think our supervision and notes actually helped them
get through the job and finish it the way we intended it to be
finished. They were very unprofessional.
3. Regarding his claim that our house is worth a lot so we should pay
a lot... Why should we be penalized because we came up with a great
design and made wise choices for materials and features? He offered
us a bid in the beginning, and we accepted. Now, because the house is
very attractive (mostly because of the land and neighborhood), why
should he be entitled to more money? His complaint is that he didn't
charge enough initially, and now he's going to lose at least $30,0000,
and that we should have to pay for his losses because our house only
cost us $290,000 and it's worth about $450,000. First of all, I think
it's worth $350,000 at the most, and even if it was worth $450,000,
that would be like a mechanic complaining because he sold us an engine
for $5,000 and we put it in a car we bought for $7,000, and now that
car is now worth $20,000--too bad, right?
4. Regarding his claim that the house took longer to build than
expected... Isn't that his fault? The reason it took longer is
because his crew are slow, lazy, and inept. They made a lot of
mistakes that they had to fix. Likewise, everything based on time
cost about double--the dumpster, the crane, etc. In fact, this
actually cost us money, because we paid four months longer than
expected on our construction loan without being able to live in the
house--shouldn't we be entitled for some compensation for that?
This is all causing us a lot of stress, and it sounds like it's going
to cost us a lot of legal fees now, too. I feel violated. What can
we do? Please advise. Any helpful information would be greatly