Software
Houzz Logo Print
m_bagnas

Contractor asks for additional costs he forgot in contract?

10 years ago

Hi all, I hope some folks can give me an opinion on whether I'm being unreasonable.

We are building a family/sunroom addition 368 sq ft. We had an architect draw up plans and we got five bids (we wanted three, but two guys weren't sure they would bid, but did). We selected the second to lowest bid, not only based on numbers but based on a reference and architect having worked with builder before with positive results. we also liked the guy and thought he would be good to work with. We signed a contract with his bid stating build to plans and listing major inclusions on the plan.

Recently we asked for a quote on a major change in the windows (that are installed, groan) The builder gave us an estimate on a couple options we were considering, but mentioned a couple times that he had forgotten to budget for drywall and insulation in the bid. when we got together to make our decision on the window change he asked us outright to pay $2600 dollars for dry wall and insulation. I pointed out that the drywall and insulation was in the contract, he asked to split the difference, I said I didn't feel comfortable renegotiating the contract.

He then went on to complain about other items that we were in the process of selecting that were over his budget. he had budgeted $1000 dollars for cabinets. I had selected two upgrades (plywood box and dovetail drawers) on cabinets at the shop he sent me too. I said we'd pay the overage. but I pointed out that I had selected inexpensive wood tops while he had budgeted for granite at $1000. he claimed that more of the cabinet and granite cost should have been labor...I get confused because I don't know what he expected to make in up charges, labor, etc.

Anyway, he immediately raised his charges on the labor for the window change by $700 (because he had reconsidered how much work the change was going to be, I guess). So, okay. We decided to go ahead with the change anyway. Ultimately, although we ended with pleasantries, but I felt that he was resentful that we didn't pay extra for the drywall and insulation. And that is going to be problematic at other points, like the mantle build and fireplace selection (which isn't going particularly well either).

Now I'm worried that we are being unreadable for not splitting the cost of the forgotten drywall and insulation or if it was actually wise to say no?

Any opinions or hints on smoothing over the process would be really appreciated.

Sorry for the length of post.



Comments (43)

  • PRO
    10 years ago

    Any changes will cost you money and are added to the bill as for the drywall if it is in the contract already he is the pro and should have seen that ommission before presenting the contract. You will have to decide if these are major in the grand scheme of things and do you want to carry on to the end now. I have no idea about what the problem is with the fireplace but I always tell my clients any chages to the original plan cost money period and FYI changing windows after install is a big deal.

    Mich- Bagn thanked Patricia Colwell Consulting
  • 10 years ago
    last modified: 10 years ago

    Thanks, Patricia- Yes, we know changing the windows is a big deal and we expected to pay for it and the labor involved, etc. We just wanted to know what we would be charged before making the final decision to change. The contractor said we would pay one price for install, then increased the price after we refused to pay for his forgotten items. But I can accept the increased price because he did inform us before we signed a change order and ordered windows. We also expect there to be a delay. It's our mistake.

    But the insulation and drywall was in the plans and the contract. Contractually, it's his obligation.

    The problem with the fireplace is the contract doesn't outline the exact model of fireplace, spec out exact surround, hearth materials, etc. Our estimate had rough numbers, but he didn't specify if the numbers are materials only or materials and labor. So basically he can say "Well, I budgeted $800 for the surround, mantel and hearth, but $600 of that is labor" Leaving us to pay for materials above $200 as "overage". because he is the contractor, the costs of materials is going through him...so. It appears he'll basically be controlling how much we pay in overages. Does that make sense? I wish I had thought to write specific materials and models into the contract, but I didn't. (Sigh)

  • 10 years ago

    Do you have a lawyer? What's to stop him from asking for additional money after this? What's the point of a contract if he doesn't stick to it?

    Mich- Bagn thanked Elaine Doremus Resumes Written
  • 10 years ago

    We do have a lawyer for estate matters. I'm sure he could recommend someone if we need it. At this point, I'd rather not go that route. the work the crew is doing appears good and conscientious.

  • 10 years ago

    ReDecor.me - Ha! you are spot on. Sadly, we've already given too much money to the contractor to make changing anything but extremely painful.

    I suppose that's another newbie client mistake. Sigh, we were told he did good work and has a good reputation and he's been in business for a long time. We really did not just pick the cheap guy.

  • PRO
    10 years ago

    A contract is only as good as it is written including everything in your case without any decisions about the fireplace this is a ball park and open to interpretation by both parties I would actually tell him you are going to have the fireplace shop install fireplace and leave that part out of the deal since it is only ballpark quote anyway

    Mich- Bagn thanked Patricia Colwell Consulting
  • 10 years ago
    This sounds like extortion, using your request for changes (which you are willing to pay a fair price for) to recover extra fees that he admits "forgetting ". How can a contractor forget basic things like drywall and insulation? But sounds like you are stuck between a rock and a hard place because you need and want him to complete the job with high quality work. I think there is little you can do except continue on the path you are on until wok is satisfactorily completed. Afterwards you can decide if it's worth giving him negative reviews on social media or taking more serious measures. It does suck because most of us amateurs do a major reno once or twice in a lifetime and so we don't know what to look out for and rely on the professionalism and expertise of our contractors, assuming they will be fair to us as well.
  • 10 years ago

    Get in touch with your local State Attorney General's office. States have legal codes concerning how contractors can bill, and you need to find out what is and is not acceptable. Knowledge is power, and right now, your contractor has all the power. He knows perfectly well what he can and cannot do. He sounds manipulative to me, and he's probably, literally, banking on your ignorance. You may also discover that complaints have already been lodged against him. I had this same experience. It was ugly, to say the least. Consulting with the Attorney General's office is free, offices are scattered all over the state, and doing so does not imply that an arrest will be made.

    People think the Better Business Bureau is the place to go, but the BBB has no legal teeth. Also, businesses' ratings are based on how much the business pays the BBB. Call the AG's office. Soon!

    I hope his name doesn't begin with a C.

    Mich- Bagn thanked Carolanne
  • PRO
    10 years ago
    When you're given a budget number for something, such as the fireplace, it's your responsibility to know whether that number will cover the design you want. As a designer, we draw and specify the design in detail so the contractor knows what he's budgeting for. As far as omissions are concerned, such as the drywall, it's his responsibility to cover those, and totally up to you if you choose to help him out with some of the costs.
    Mich- Bagn thanked Janet Brooks Design
  • 10 years ago

    @tedbixby - We have about 1/5 the bid cost to pay. The foundation, framing, roof, shingles are in. No drywall, insulation, electrical, heat, fireplace. Work has been taking place almost daily, for good solid days. We have no complaints about the work that's been done.

  • 10 years ago

    @CarolAnne - Thanks, I think I will look into the AG just to educate myself. No, his name doesn't begin with "C" ;)

  • 10 years ago
    last modified: 10 years ago

    @ Patricia and Janet - Ah - I should have know it would be less simple than I thought. I thought gas fireplace, two off white cabinets, simple flat whitish stone facing, dry wall, flush brick hearth - what could go wrong. ;) Live and learn, I guess.

  • PRO
    10 years ago

    I don't know where he got $2,600 in sheetrock and insulation costs in relation to window upgrade, when sheetrock and insulation is already part of the job, especially when we talking about one room addition.

    There is up charge for cabinet upgrade when you go to plywood and dovetail drawer construction, but there is no extra labor involved as installation goes a cabinet is a cabinet. Extra labor cost would involve if custom components being added to the kitchen detail, i.e fillers, inlays, light rails, crown molding (if previously was excluded)

    I hope this is not the case of "bidding low to get your foot in the door and make the profit up along the course of the job" which some companies tend to do.

    Good luck

    Mich- Bagn thanked GN Builders L.L.C
  • 10 years ago

    Thanks for the luck - GN. The drywall, insulation figure was not due to the window change. The contractor just remembered that he forgot to put it in the original contract (for the whole addition) and asked that we add it to the bill at the same time that we made the window change.

  • 10 years ago

    @tedbixby - I will have to go through the numbers with my husband again to see if we would have hired him with the additional cost. The difference in bid was more than that amount. But some of the other builders included other or more specific examples of materials. But that is a very helpful way to look at it. Thanks!

  • 10 years ago
    Im tempted to say split the cost of the drywall/insullation. I dont like the idea of someone else paying for elements of my home even if its a mistake on their part of not including it in the bid. I think preserving a good relationship with the contractor is worth $900. It doesnt seem right he has to pay for it. And I feel he will be bitter an upcharge you elsewhere to make up for it anyway. Or might not be as motivated to do a great job.
    Mich- Bagn thanked shiningautumn888
  • 10 years ago

    @ Sophie - Thanks that's another approach to consider. We didn't have a designer. We had just had the architect. We talked to many folks in the area who had similar or larger additions. None of them mentioned the need for a designer to spec out the cabinets, facing, hearth, mantle, nor did the architect. I guess it's one of those situations where you do not know what you do not know.

  • 10 years ago

    maggys111 - Thanks - splitting the cost that the contractor initially asked for would leave us paying $1300. But maybe it it worth is to maintain good will.

  • 10 years ago
    last modified: 10 years ago

    An architect can provide full design services in addition to just a floor plan. Its far more typical that they provide specifications for products used and section details for how the cabinets mesh with the fireplace surround, for instance. Just giving you a stamped blueprint and washing his hands of any future input isn't typical unless he was moonlighting on the cheap.

    Full design services include assisting you in interpreting bids as being accurate reflections of his plan, and site visits to ensure that the plan is being implemented properly. I don't know what you paid for plans, but the service does come with a higher fee. It's usually worth it in improved communication and a better end result.

    Mich- Bagn thanked User
  • 10 years ago
    last modified: 10 years ago

    Hold on one sec. Let's clarify here. A customer is only entitled to view a contractor's invoices in two situations. Either the project is structured as a ''cost plus'' where the subs costs and all materials have a 20% (or whatever fee) tacked on top of that completely transparent invoice as the contractor's fee. Or the situation where the contract specifics are unknown, (see poor specifications above) and you have an ''allowance'' (i.e. ''guess'') inserted into it as a mini ''cost plus'' contract inside a lump sum project. In a lump sum contract, the customer doesn't get to view the invoices for the tile, or lumber, or anything else that was not an allowance, or done as a change order. If there is a change order, the costs for the change order only must be justified, not the original allowance that you accepted in the contract that you signed.

    If the contactors has an ''allowance'' for $1000 for stone, or cabinetry, or whatever, he only needs to show the customer that the stone or cabinets or whatever costs $2000, in order to add the extra $1200 to change order. Why $1200? That $1000 allowance contains part of the contractor's 20% markup. The extra $1000 does not, and has to have the markup applied to it. Yes, markup is about profit, but it is also about risk. When a contractor is responsible for $2000 vanity, he has more risk than if it were a $1000 vanity.

    And this is why the better money is spent during the design phase to specify everything on the front end rather than spending it in change orders because of unrealistic allowances. The building industry thrives on unrealistic lowball allowances because customers are conditioned to look for the low bid, not the accurate bid. Contractors who give realistically priced bids are penalized by losing work to the lower bidders with less accurate details. Break the cycle by handing them full specification on the front end.

    Mich- Bagn thanked User
  • 10 years ago

    That's interesting Tedbixby and Sophie about the receipts. I'm not really sure if the contractor issue is just being a poor businessman who's just disorganized or if he's kinda working the situation. That was why I initially declined to pay for the forgotten drywall/insulation. I was concerned if we paid for that miscalculation, then we set ourselves up to be asked for other miscalculations (on heating, or siding, etc). As far as I can see (I wasn't there for the whole conversation, my husband was) He was not particularly apologetic although he wasn't belligerent either.

    You all have been very helpful.

  • 10 years ago

    @tedbixby - Thanks! I'll let you know. I want to see how things go Monday, Tuesday.

  • 10 years ago
    last modified: 10 years ago

    Oh well, It's past Monday or Tuesday and I can't really say how things are going. We've met a couple of times with the contractor and seem to have smoothed things over. But our job is on hold while we wait for our new windows. It took him about a week to place the order for new windows and the lead time on windows is about four weeks. The crew is, understandably, on another job.

    We have been waiting over a week for a quote on a fireplace unit from the wholesaler he works with. He was supposed to pass on a quote for flooring a couple of weeks ago, but keeps forgetting. He just seems very disorganized or forgetful. He is an older gentleman...maybe that's some of the issue.

    I just can't see paying money in addition to our original contract for the forgotten drywall and insulation. I just feel uncomfortable handing over more money to him on the project than we need to at this point.

    By my suggestion, we have agreed that I will select and purchased the materials (marble tile instead of slabs, thin brick and reclaimed wood for mantel) for finishing the fireplace surround and mantel. The money in the budget will go toward labor alone. It appears that the materials were going to exceed his initial estimates and the process of dealing with his preferred sources and figuring out the cost of upgrades is too cumbersome. This also saves him the time of dealing with purchasing, transporting and storing these materials. Between this and the fact that we downgraded to wood cabinet tops instead of granite, hopefully this arrangement will hopefully make up for some of the unbudgeted drywall/insulation. But maybe that's wishful thinking.

    Sigh, sorry for such a long and confusing update. Clearly working with a builder is not my forte.

  • PRO
    10 years ago

    i actually think you're doing a good job of this.

    in a perfect world everything is black & white and there are no shades of grey. sophie's example of the architect who has been paid to fine-comb detail every minutiae gives you that world, but like she said, it's an enormous cost.

    more typically, clients find themselves in scenarios like you are in, and i think you you are handling it well. you're not being entirely inflexible and you're not letting his disorganization be all your fault. keep it up.


    Mich- Bagn thanked BLDG Workshop Inc.
  • PRO
    10 years ago

    A lot of great comments, so I won't go too far into an answer. If it's in the contract, and he forgot it, it's all him. DO NOT PAY FOR IT IF IT'S NOTED IN THE CONTRACT! Unless you want to be giving and feel he deserves it.

    On a different note, I recommend (and do this in my business) that complete renovation proposals actually list the allowance amount and the exact selections that are going in the job. That way, when you make changes to it you can feel comfortable knowing a "bait & switch" is not occurring.

    Mich- Bagn thanked Hunter Kitchen & Bath
  • 10 years ago
    If you want to smooth things over, you might consider telling him you will consider paying for drywall and insulation as part of your very last payment. Don't debate it in detail. Just tell him you'll consider it. Of course he should not have asked you to pay anything but he's likely trying to cover for an honest mistake. If it's his only major mistake and all else goes well, at the end you might consider splitting the amount. You still have ever right to be secretly mad though!
    Mich- Bagn thanked cchute
  • PRO
    10 years ago

    Here (Vancouver, Canada) it's very uncommon to have fixed bid or contracts for big residential renovations. The most common and best (IMO) way to go is "cost plus" also mentioned above. Fixed bids are good for commercial or tenant improvements, but not for a place you actually care about a lot. Almost all contractors will base their fixed estimates on past projects and prices rise all the time. Most finishing products (cabinets, counters, tile...) will go up in price at the beginning of the year (hello January renos!) So now your guy is going to purchase products and they are more money, he still wants his profit, so tries to get the cheaper stuff. Especially in a situation like yours where "trim" could mean anything, you are not in a good situation. With cost plus you control exactly what you get and if you want to go over budget on your tile (for example) you are doing it with your eyes wide open... He charges all his labour at a set rate (that he should estimate before the start of the project.) Here cost plus is usually 12-15% for an average home (not luxury). And it's a very transparent way to do it. Their discount at suppliers is usually 25-30% so you still get a deal. And yes a designer would save you money (or at the very least not cost you anything) as these mistakes would likely not happen. Most architects would also love to take on that kind of work, but obviously they would charge more than just doing drawings. Live and learn I guess. As some mentioned above, you might want to sit down with your contractor again and review the contract. I think it might be too late for my advice, but maybe you can implement some of it or just consider it for next time....

    Mich- Bagn thanked Reach Design
  • PRO
    10 years ago

    This is a really frustrating situation. I feel for you. You are actually handling it very well for all you have been through. And I think you have been generous with this guy. There is just no room in the construction world for handshake agreements or for written contracts that don't contain specifics. Specific contracts protect EVERYONE involved - you and the contractor. We only do remodeling and we are design/build so we have a bit different business model. Everything is selected and priced before the contract is signed. We do fixed price contracts even in the remodel world because we don't want to be in a position that the customer can start to dictate who can come on the job because they want cheaper labor, or they get upset because the guys are standing around discussing a problem that has come up and they think we are wasting time and their money.

    Drywall and insulation are basic, standard parts of construction. I think it is unfair and unprofessional for your builder to ask you to pay that. If we were to forget it in a fixed price contract, then we would eat it. In our world, all customer selections and items subject to price fluctuation would be set out as allowances and you would know exactly what they are. You would know within days of a selection whether you are within the original budget or if you went over and would be given an opportunity to reselect if you needed to stay within budget. I would never even sign a contract without knowing exactly what the fireplace was going to be as that not only affects material costs, it can greatly affect labor costs. Of course our contracts are 15-20 pages long since it spells everything out - which some people think is ridiculous. We are priced a bit higher than a standard GC since we are design/build and we provide a lot of extra services. It saves a lot of headaches during the process to do all that planning and legwork upfront.

    I like your comment that "you don't know what you don't know." We preach all the time to try to educate consumers that all contractors are not the same. Not sure how to get the message out that what you don't know can bite you in the behind. Of course you checked credentials and had recommendations, so it is hard to protect yourself.

    Good luck and hopefully when all is done you can enjoy your space.


    Mich- Bagn thanked Brickwood Builders, Inc.
  • 10 years ago

    I know this thread is very old, but I wanted to add an update on the situation in case anyone finds themselves in a similar situation and is searching houzz.

    It's now 4 months past my original advice post. In January we gave our builder a deposit for 1/2 the cost of the newer larger windows we had decided on. We were told it would be 4-6 weeks for delivery of the windows, then work could resume. We ended up paying $2500 over the prearranged price for the same fireplace unit that the contractor had given me a flyer for with the proposal. Work has been slow since January, about 1-2 weeks of work in 4 months.

    My husband repeatedly asked about the new windows since late Feb, only to find out this week that the windows had never been ordered, in spite of the fact that our deposit check for the windows was cashed in January.

    Bummer. We will be firing the contractor, with consultation from a lawyer to make sure we don't end up having the contractor attempting to bill us for work that we paid for in our previous payments, etc.

    I'm sure that the project will end up costing us more than we expected (based on the contractors bid) but it became apparent that the contractor had no intention or ability to finish the job for what he bid. The guy's most recent complaint was the unexpected cost of permits.

    The bright side is that the rough inspection was done today and it looks like the work done up till now was fine, only minor changes needed.

    Not sure that I can give any "what I should have done advice" at this point. Other's up thread made some good suggestions, though.

  • 10 years ago

    Thanks for the update. Sorry it is such a struggle. Sounds to me like the contractor found himself in a financial bind, if he was cashing checks and not placing the orders, he was probably using the cash to pay off creditors.

    Good luck with the rest of your project, and I hope you find a good contractor to finish the job!

    Mich- Bagn thanked susanalanandwrigley
  • 5 years ago

    Good comments. I am in a situation now and now two days before the job will be finished, my contractor is asking for 17k more. All this time, he said he would tell me if we go above the budget we both signed in the contract. So many lessons learned and my husband just wants to pay it and put it behind us. 😣😔

  • PRO
    5 years ago

    This post dated 4 years back, but in any case, if 17k grow on the tree in your back yard go right ahead and pay it, if not if you upgraded something or there was a change order or unforeseen situation, etc any extra charges should have been brought to your attention, approved and signed by you before any work was done.

    Tell this contractor to justify this amount before you give him a penny.

  • PRO
    5 years ago

    I agree with GN. Let's assume it's change orders that are bringing it to that number. The "contractor" should have told you about it before the work started and then gotten your signoff. I always get the signoff and a check in full for change orders/add-ons, that way there is no misunderstanding or forgetfulness at the end. I think this "contractor" (I keep using "quotations" because it's doubtful of the contractor status with such a cavalier attitude towards money. Best of luck. I'd check your local statutes on what can be charged at the end, especially if you gave some sort of permission to do extra work or to go above budget. Cover yourself and take the offensive on this one and you will probably do well. However, if you know you agreed to extra stuff and know you should pay something extra, be fair, but don't let them walk all over you.


    Good luck. I hope the job looks great either way!

  • 4 years ago

    So we are having a home foundation removed and we were quoted 7500, and the final invoice stated we owe 26k. Can contractors do this?

  • PRO
    4 years ago

    No.

  • 4 years ago

    Thanks. I understand if it went over 10-15%, but not 4 times as much.

  • PRO
    4 years ago

    That's a complicated question, which has to do with your contract, what you have in writing and what you agreed to orally. Communication is everything is contractual relationships!

  • PRO
    4 years ago

    Janet is correct - the answer is maybe. It depends on what the contract/agreement states. With such a brief explanation no one else can know what it means to " have a home foundation removed". It could mean many things with differing levels of complexity. There could be many valid, hidden reasons why the costs escalated to a higher level. This is something that needs to be discussed with the contractor to gain a better understanding. In our case, if a price cannot be reasonably determined upfront due to high probability of hidden items, we work on a cost plus basis. Customers ask us to "ballpark it and they won't hold us to it" - but the only thing they remember is the ballpark number (not a quote) and some get upset. Depends on what all the discussions were, what the contract says and what all the facts are.

  • 4 years ago

    my contractor hired a cabinet company to do my kitchen cabinets. My contractor told me to speak with the kitchen designer to make the plan. The company stopped making cabinets, my contractor got his money back and found another source. When the cabinets were delivered, they were all wrong. (The original designer apparently did not forward the new plan to the contractor as she promised. She does not work there anymore.) My kitchen now looks like a bunch of cabinets thrown together helter-skelter, and to add insult to injury, my contractor expects me to pay for the extra $ this huge miscommunication cost. Am I responsible for paying this?

  • 4 years ago

    by the way, the cabinetmakers did the best they could to salvage this upsetting situation.

  • PRO
    4 years ago

    Am I responsible for paying this?


    No.

  • PRO
    4 years ago

    I agree with Joe.

    "When the cabinets were delivered, they were all wrong. (The original designer apparently did not forward the new plan to the contractor as she promised. She does not work there anymore.)"


    This should be simple...

    If your contractor didn't have the original design plan that you previously approved, what plan did he use to order the cabinets?

    If he made his own design he should have verified everything on-site and most importantly gone over the layout with you before ordering anything.

    If he took it upon himself to do everything and you had no clue what he is ordering and didn't give him the go-ahead and now everything off it's on him.


Sponsored
HomeCraft Remodeling
Average rating: 5 out of 5 stars5 Reviews
Custom Craftsmanship & Build Solutions in Franklin County, Ohio