Do I have to pay all the GC fee?

3 weeks ago

Hello, I hired a Custom home builder to build our dream home. Short Version: We were quoted 6 months and $291,000 to build. It has been over a year (4 different superintendents) and the build is $30k over budget. We (the home owner and loan carrier) have had to shop for other sub-contractors and suppliers, because if we went with the ones that were provided we would be even more over budget. We feel that the budget was purposely underbid to win the contract. The GC didn’t even send the floor plans out for bids but estimated. I have had to go into the house fix items myself because the sub-contractors would not. There have bee major issues with framing and plumbing. There has been some damage the insulated garage doors by one of the subs and the GC refuses to cover. He states he doesn’t know which sub it was and that it could of been one of the subs I hired. At the time frame the damage occurred there was only one sub we hired (flooring) had nothing to be around the garage doors.
My questions:
Is he obligated to cover the damaged garage door panels.
We believe for the amount of work we have had to put in that he does not deserve the complete GC fee, are we obligated to pay it? The issue is we have already paid him 90% of the fee and believe that some should be paid back.
Thanks,
Josh H

Chief Legal Officer Levelset

There are a lot of issues that are potentially raised by your situation. It definitely seems to have been a frustrating project. While time and cost overruns seem to be a part of nearly every construction project, that doesn’t mean they any less bothersome. And, when these are coupled with disputes over the work done, and the responsibilities of the parties on the job under the construction contract, it is even more problematic.

Your situation appears to be complex and messy enough that it may benefit you to obtain a local attorney to go over all the details, and assist you with any potential path toward recovery. Getting money back after it haas already been paid is always quite a bit harder to do than just retain some of the money if the work is not done.

From a very high level, contractors are generally responsible for damage or poor work done by them (or their subs). This responsibility usually stems from a breach of the contract for the work and a failure to provide the work in a “workmanlike” manner, or just from run-of-the-mill negligence. If the homeowner and contractor can’t agree on the amount and scope of the work or damage at issue, and the amount that should be either returned or unpaid, a lawsuit will likely be necessary.

Much of the determination of what damages may be applicable will have to be seen through the lens of the contract document itself. That being said, however, there may be an issue with the contract itself. Depending on how the contract was written, and the type of contract it is, the failure to provide a reasonable amount in the bid may be problematic.

While there may be some liability for the damage to the garage, it would likely be much more difficult to get the GC fees returned, despite doing some subcontractor management yourself. The recovery of anything, if you can’t come to an agreement with the GC, may require a long and expensive lawsuit, though.

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