I recently moved to Dallas, TX and decided to build a home in the
Sunset Pointe community of Little Elm. We chose Premier Home Builders
and signed a contract on 6/30/06. It is now November and they have only
done the plumbing rough. They haven't even put down a foundation. They
say they are waiting for the inspections and it's the city's fault for
taking so long. I finally called the city and talked to someone in the
inspections department and they said that the plan review has been
ready since August and Premier Home Builders needs to pay the fees.
Why would Premier Home Builders not pay the fees to start
construction? Are they pulling a scam on me and others? It seems to me
that they would want to build it quickly and get paid. I am getting a
little nervous that I am getting ripped off of my deposit. Should I
cancel? I would appreciate all opinions on the matter.
Thanks in advance,
I'm not sure what it's like in your country but in the UK...
Builders frequently take on more work than they can handle. It's most likely
that they are busy building another house(s) somewhere. What does your
contract say? Over here it's normal to have a penalty clause for late
completion. The one in my contract is about $1000 a month for over run. I
won't be holding my builder to that as I know he's had people on site every
day. Visit the site every day and keep a record of days when the site was
empty. Take photos.
If you are worried about them... Go visit the materials supplier they use.
Tell them you are thinking of using the company to build a house and would
be interested to know if they have heard anything good/bad about them. Find
out if they pay their bills etc. City Inspectors won't allways comment on
what they think of building companies but you might be able to get an off
the record comment if you have a quiet chat with them in person.
I meant to say visit the site every day and call the boss to find out why
they aren't on site that day. My builder calls me to let me know if his team
aren't going to be onsite for any reason - he even calls if they are onsite
but will be leaving early that afternoon!
A lot of builders are having cash flow problems now, and I have read of
builders going bankrupt with great regularity since the housing market
began to cool. IMO a lot of builders were not thinking straight during
the housing boom, and it caught them ill-prepared to weather the
inevitable slow-down. Any of them that weren't doing business
intelligently or got too greedy or arrogant/risky are now in a bind.
Because builders folding a company and/or going bankrupt has been a
problem for decades anyway, you should make sure they ARE paying
suppliers and subcontractors as the other person said. If they are not
it's a sign of impending trouble and possible liens, even if you do
manage to close on this house. A word of advice: don't assume that
there is any law or anything that will protect you or get your money
back if this is the case. Texas has some of the worst consumer
protection when it comes to a house that i have ever seen, and it's not
good in any state. Usually, people don't find this out until it's too
late. www.hadd.com and www.hobb.org might interest you.
Robert Woolley wrote:
What do they say after you tell them the city says the ball's in their
court? Does the contract say they will pay the fees or were you
responsible for them, perchance?
As for cancellation, what's the contract performance/schedule clause
say and what rights/reasons are listed for valid cancellation and what
are the consequences?
You do have representation in this, right???
As someone else says, sounds like you should have been a lot more
aggressive in following up on this before. Don't have a clue as to
this particular developer's status, but another pointed out there are a
lot who were over-extended and are suffering the effects of the
scaleback--yours may be one. You definitely need all the help you can
get to protect what rights you do have and to be aggressive in
asserting your rights. Not obnoxious, just proactive, not passive.
I just got a call back from the Chief Building Inspector and he said
that they are not alone in delaying payment to the inspector. Other
Builders do the same thing. Secondly, He said that Premier Home
Builders have a reputation for slow pay and, therefore, many
contractors won't work for them. Naturally, I was *stoopid* and went
without representation so I am screwed. I guess I'll hope for the best
and see what happens. Oh...and the contract I had to sign favors them
almost 100%. They can even drop me if I complain too much
Someone told me that wisdom and knowledge is never free. I think I just
learned an expensive lesson.
Robert Woolley wrote:
Well, sorry to hear that... :(
I'll only reinforce the "contract I had to sign" part is absolutely a
mindset to be broken. Many take advantage of the reluctance of folks
to make waves, but any contract that is terribly one-sided isn't a good
contract and if the builder isn't willing to amendments that make it
more nearly equitable/balanced, then you probably are better off
without them. Unfortunately, many know the thought of going through
the process again with someone else is more than most individual
home-builders are willing stomach so they get a one-sided deal...there
was a long thread on this subject just recently, the upshot of which
is, of course, that while one-sided, they undoubtedly are not so
egregious as to make them unenforceable. Getting some legal advice on
what recourse you might have is recommended.
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