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What are my options?

New York

My contract is split into building costs and allowances. 249,000 for building cost and 60k for allowances. Now after being more educated it seems my contracted is heavy on the allowance side. The contractor has alot of tasks on the building side which are either labor ("contractor will install") and a few that say ("contractor will supply and install"). That leaves majority of materials like hvac, fixtures, tiles etc in on my allowance side. Then those costs have inflated. Example allowance for hvac was set at 18k by contractor now he tells me it will be 25k.cabinets was 16k in allowance now it's ballooned to 25k. So most of the cost seemed to have ended up on my allowance side and i'm out of money.

2 replies

Mar 23, 2021
you seem to be the project owner. you need to review the budget assumptions and tighten up the project, omit what can be omitted.
Mar 23, 2021
Even though it says "Anonymous Contractor" it sounds like you're a homeowner. As you're well aware, you've got a problem, if its an allowance item and there is a a legitimate overage, then the contractor is likely entitled to an upward adjustment to the lump sum contract (or GMP as the case may be). You may need to retain a construction lawyer to negotiate with the contractor, but that in-and-of-itself is expensive. I would stop work and negotiate with the contractor, and try to get an accurate forecast on costs and work something out, otherwise you're going to get smacked with a mechanic's lien. Of course, there are some other options, but a review of the contract is required along with the facts and circumstances to assess the above and any other options. Good luck.

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