We signed a contract with a builder to build my house for $300,000. Construction started in September. We have paid $250,000 and still have about $50,000 left before our construction is complete. The contract we signed had allowances for things like tile, fixtures, and septic. Today he told me prices have changed and labor has gone up on the tile and cost of the septic. Am I responsible for the difference? Example: Allowance for Floor Tile $5 sq ft for tile and $6 sq ft for labor to install it. I have already purchased my tile for $5 sq ft but if the labor to install is now $12 sq ft... Am I now responsible for the extra cost to install or am I covered by the original contract allowance cost? This site has been very helpful in the past. Thank you everyone for sharing your knowledge and experiences with me. ~ Thanks
The legal analysis would start with a review of the contract you signed, and then extend to any communications which have occurred and to the builder's advertising and promotional materials.
An allowance is just that -- an amount of money allocated in a bid estimate or contract to pay for certain work scopes. If the cost exceeds the allowance, typically, the owner is responsible if the owner has approved the increase in the price for the work. If you believe that the labor is overstated, then secure a bid from another tile subcontractor for the labor to install the tile that you purchased and compare your bid to what the builder is stating.
Retain a construction attorney to review your contract and communications and to provide advice.
Good luck.
Hello,
That's strange. Mostly because the cost of materials have gone up but labor has stayed mostly flat or gone up only slightly. It has not doubled in 7 months. I feel like your contractor is not being entirely straightforward with you but I am not in the relationship.
Unfortunately, you may be responsible for the difference if you still want to use that contractor. If you want or intend to use a different contractor or you need the cost lowered, communicate that in writing to the GC.
E. Aaron Cartwright III
214.789.1354
Aaron@EACLawyer.com
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