What do you have in writing? What's in the contract? Words of mouth mean nothing. It sounds like you got S@ewd but need proof. You need to find out what 'you' did that the GC was 'supposed' to do and what that cost for a start.

You or the builder can definitely terminate the contract. Best scenario is you come to an amicable separation. In the meanwhile, you can demand the work to stop pending resolution.

Often you're just screwed. Bry's advice about legal action is totally correct. I discovered this after a divorce - it would have cost more to get an increase in child support than the increase would have been. Unfair? Totally, but life is full of "great unfairness".

Byr's right - "what did you pay him and how much is collectible". You may just have learned a very expensive lesson.

Before you fire him, you need to talk to an attorney. Cover yourself to make sure you do it the right way. It will save you a lot of time, money and effort. You should have done this six months ago.

Yes, legal action is the route we decided to take. The contract was never presented to us as a contract. It was "These papers tell the bank that we are the builder of record. They have to be signed ASAP so you can get close on your loan. It's vital we get them to the bank within the next day or two." Stupid us for not looking at the papers closely, but they were bundled with a bunch of other closing documents.

We still owe him half. We haven't taken a draw since June because nothing was happening with the house, so there wasn't anything to pay for. It wasn't until we took over as GC that things started happening. Of course, he's chomping at the bit for us to take a draw so he can get his money. That won't be happening until I consult with an attorney about Texas Deceptive Trade Acts and Breach of Contract.

Ugh. why can't people just do what they are paid to do? Integrity has become a superpower.

bry.......so you are saying what's in writing and what's in the contract means 'nothing'???? The contract would specify the payments after such and such work was completed. But what is specified in the contract might be a slam dunk. The only thing I agree is what it would cost verses what you can get back. Lawyers RIP people off to make easy money!!

If you take legal action, everything will be based on your contract and what is included and specified in there like Robin said. If your contract does not include specific scope of work and what is included, it will become a case "he said, she said" and the lawyers usually rack up in cases like this.

If you base the case on the timetable and that is taking forever, he will say he doesn't like to rush and is trying to do a good job, the weather, etc. I'm sure this case will not be in small claims court and both of you will have attorneys (that is if the contractor shows up at all) and attorneys who handle this type of cases know how to BS.

If you say the loan was closed in November I assume by the time permits where approved, etc you were already in December. If you have winter season not many builders like or will break the ground in the winter, etc.

As temporary power goes, and this being a new house, you don't usually set up a pole with a temp power, it's a waste of time and money... Most contractors have generators and after the house is framed and rough electric is done and panel is inspected, only then you call utility company and request a meter... until that time you use generators or if there is a house nearby you ask them to use the power, and in good faith you offer to give them $50-100 when electric bill comes in, and that is a very generous offer because power tools like saw's and drills don't take to much juice and they won't even notice the difference on the bill... Most won't even take any money.

Other than that, the bad experience you having you would usually see in cases when you get someone with the lowest bid and people with low bids usually have no clue what they doing and people they hire are a bunch of "shmucks" or "fly-by-night" contractors and the entire job goes "South" as a result of that.

I hope you will recover some of the losses and I hope you didn't pay them more than what they deserved because the last thing you need is litigation where only attorneys come out as winners and you might end up being in the worst position you're now after the smoke clears.

I was in 2 situations like this where I was hired to complete the job someone started, people were in the same situation... One couple got lucky and the contractor returned 10k after their lawyer (brother-in-law) sent a nasty letter and threatened with legal action. The other couple, unfortunately, turned down the settlement which was reached with a court-appointed mediator and took the battle to court and the outcome was not what they expected.

Sadly this was a bad experience for you... Good luck and I hope you get to enjoy your house after completion!

You have a lot of simultaneous issues.

1. Sadly - GCs are not licensed by the state of Texas (learned that from another thread) so there's no help there, UNLESS your municipality licenses them.
2. Your loan MAY be dependent upon having someone with experience (here we'd say licensed) as your GC I would not do too much without READING your bank docs
3. You have a contract - read that.
4. You need to determine your go forward options and then make sure the bank is on board. Perhaps they can help, since they hold the money.

so you are saying what's in writing and what's in the contract means 'nothing'????

If you knew anything about the law, you would understand that what the OP is describing is a breach of contract. Any contract that the above description of the G.C.'s behavior wouldn't be in breach of, would be illegal and not allowed. There is no real need to see what is written in the contract in order to tell them they need to see an attorney and start looking at recovery options.

The contract would specify the payments after such and such work was completed. But what is specified in the contract might be a slam dunk.

Payments for specified work are only due when the contract is not in breach. This is a fairly straight-forward case, the attorney writes a breach letter with a demand for settlement that outlines the next steps, the G.C. will settle and walk away if the settlement is reasonable and then you are done.

That is going to cost the OP money and depending on how much is remaining of the G.C.'s payment they may opt not to do that. If the G.C. wants to go to court then that will cost more money, but the G.C. is very likely going to want to avoid that, because he runs the risk of paying the OP's attorney fees. His attorney will certainly advise settlement.

The contract states very little on what they are actually responsible for. It was more about what we can't do, like complain when they go over budget, and we are supposed to let the BBB mediate any problems (yeah, like that would be helpful). It's one page long and not well worded. Again, we didn't even know there was a contract since it was bundled with a bunch of other papers that we had to sign for closing.

I took screenshots of their website's list of promises and expectations for partially the managed package. They are responsible for foundation, framing, roof, HVAC and all the rough-ins. We paid extra so we didn't have to manage any of that. In other words, they are the general contractor in charge of getting the bids, materials and overseeing the project until the rough-ins are finished. The fact that we had to take over as GCs about the time of framing means they did not fulfill their obligation. This falls under Texas' breach of contract and Texas Deceptive Practices Act.

We are still holding half the payment, and I have hundreds of pictures with time stamps, emails, timelines, texts, charts and screenshots. My documentation is massive. I'm visiting a lawyer tomorrow. A letter may be enough to resolve the issue.

V....The GC took 'advantage' of you because of the very poorly written contract and they knew this going in. You need to have a lawyer read the contract to see if it's even worth the paper it was written on. Glad you saved that other evidence, pics, time stamps.....etc.

We had to fire our builder after it took two years to just barely get into the interior stud wall phase of our ICF house. We got lucky and found a real estate lawyer through our interior designer who took a look at our contract and offered advise for free. He said that it's the responsibility of the contract writer to provide explicit detail as to the expectation of the build and a loosely worded contract doesn't offer them any protection. For example, when we fired our builder, he tried to get some of his milestone payment for being "80% to drywall". The contract stated that payment will be made at the completion of each milestone, so he had no legal leg to stand on to request that payment. Also, the contract stated the build time of 18 months, so being at 24+ months, the builder was already in breech of contract. Under advice of the lawyer, and after his proofreading, I drafted my own letter of intent to fire the builder and sent it via certified mail, that detailed my conditions for his exit from the project (remove trash and tools by certain date, leave all purchased building materials, etc). After the builder tried to raise a stink and demand more money, I reminded him that I kept a chronological blog, updated every week, with the progress of the build and his name plastered all over it. That was enough for him to back off.

After that, we needed to contact the bank and have his name removed from the construction loan, and deal with all the outstanding balances from the suppliers. We lucked into an awesome builder who remediated the build and after a year of him on the job, we'll be moving in soon. The old builder died a few months back so if we tried to stick with him, we would probably have been farther behind and hunting for a new builder to finish up.

I suggest you find a lawyer and know where you stand before taking action. Hopefully you can come to an agreement and get rid of your builder. You could also look into complaining about him to your state's builder licensing board.

Lessons in Life

NEVER sign ANYTHING without reading it. Be the person who delays the job by a week if you have to.

Get EVERYTHING in writing.

ALWAYS check, double check, and tripple check WORK & REFERRENCES.

Easier said than done, I know; that's why most people learn these lessons the hard way. Don't beat yourself up though. Move on.

Whether to take this up legally or not: Usually easier to cut your losses, take the lesson, spend your money and time on a new pro, and get the job done well. Good

Okay, I talked to a lawyer today and I'm retaining his services. We totally have a case, especially since I was obsessive about taking pictures and keeping every single email and text. The fact that they never presented the contract and said, "Here is the contract, please read it." falls under deceptive practices. And since they haven't done any of the actual GC work (I have a slew of sub-contractors who will state that we hired them, managed everything and paid them independently), I can get them on breach of contract. Then, I have an independent inspector that stated that the negligence during construction has resulted in deterioration that is concerning and should be addressed. Now I have get all my documentation together. I'll update when things move forward.

@dazureus, sounds like you did the right thing. I'm glad it worked out in the end.

Well, if you're moving in legal directions, get off this thread. Everything you post here is discoverable.

Virgil: Does not matter one bit.

Heck, I got fired by my builder. Just discuss with your builder like adults and part ways. There is no crime here, so stop the silly drama and get on with your lives. Real people want this, courts want this.

I've been careful not to mention names, but until things are resolved, I don't plan on posting any more details.

I've been following this thread for a while. I think you've done the right thing by getting legal help.

Good luck!

Let us know how this is resolved.

Update: So we hired an attorney who sent a demand letter. The builder gave us no answer for more than a month. Yesterday their lawyer sent us their demand letter blaming us for every single problem, terminating the contract and asking for almost the full payment despite the builder not having set foot on the property since mid-October when we were only about 50% done. We have an appointment to talk to our attorney in a few days. Our bank is particularly concerned about the builder's actions. I'll update as we learn more.

Good luck and hope everything works out for you.

Following along and hoping you come to a resolution.

Good luck - it's amazing the builder can't do any work, but he can sure put an effort into working with his lawyer.

@jannicone Too true!

Please keep us updated

Update?

It has been tough with lawyers talking and getting no where. In the meantime we have become the GCs and have just about completed the house on our own. Other than the foundation and framing, we have hired and directed our own subs. Many of them said they would work for us if we went into the business We have something in the works that should free us from this bad relationship. I will update with details in about a week when I feel like we were in the clear and don't have to worry about repercussions for anything I might post. And boy, do I have plenty to post. I am willing to be a cautionary tale to help others.

Good luck and sorry you are going through this!

Good luck, So many stories on here make me TERRIFIED to build on a wonderful piece of land we have in Ga. Truly don't know if i want to go through with it. Cpartist who had done everything right and STILL seem like every day we have issues and there have been some wonderful storys of success, BUT !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

*Update

So, the lawyers wrote letters and nothing was ever resolved. We discovered the builder misrepresented themselves to the bank as turn key builders since our bank does not allow owner-builder construction loans. We had paid for a package that would basically give us an empty shell and we would take it from there. Because of this misrepresentation, the builder knew we could not get out of our contract unless we found another builder. We couldn't find another builder unless we were willing to go with a full custom home builder since our bank only allows turn key builders. We couldn't afford that. And we couldn't complete the construction and move into our house unless the builder signed off on the loan. What. A. Mess.

After discussing the situation with our construction loan representative we decided to take out a home equity loan.

So, as of last week, the loan was paid off. The only way the builder will get more money from us is if it is court ordered. However, considering the builder's company misrepresented themselves on the bank contract and then completely abandoned the project, they would be hard pressed to support their beach of contract case. But who knows what they are thinking? I do know that from day one I began keeping extensive documentation "just in case" there were problems, and I have that documentation well organized. Over 70 page (not including pictures). I'll update if there are any new developments. This week we got bids for the driveway and granite for the kitchen. I hope we will be moving in next month.

Good for you for seeing this through to the end. And I hope you have smooth sailing from now until move in date.

Also - a great lesson in record keeping.

Please keep us posted.

Once you have completed the building process, you can go out into the mortgage market and get a conventional loan. This will allow you to deduct the interest. I understand that in the new tax legislation, home equity lines no long qualify for interest deductibility. Something that you should consider as you complete the process. I am so glad this is working out for you. I hope you enjoy your new home. You deserve it.

Well, I looked into that before I made the home equity loan leap. There has been a lot of confusion concerning the new tax laws.

From the IRS tax site concerning HELOCS and home equity loans: Beginning in 2018, taxpayers may only deduct interest on $750,000 of qualified residence loans. The limit is $375,000 for a married taxpayer filing a separate return. These are down from the prior limits of $1 million, or $500,000 for a married taxpayer filing a separate return. The limits apply to the combined amount of loans used to buy, build or substantially improve the taxpayer’s main home and second home.

One of the major changes is if there are limits on being able to deduct the interest on HELOCs or home equity loans that are not for home improvement or home acquisition such as paying off credit card dept or buying a new car.

We are keeping the house and renting it out to pay for the home equity loan we acquired to pay off the construction loan. Now, I was worried that when we rent out the house that next year it would no longer qualify as a second home.

But, since rental property is business property, the interest paid on the mortgage is a business expense, and fully deductible.

So there you go, free tax advice. Phew, I was way worried about all this until I researched it.

Any updates? We are having issues with our builder too.

Oh my gosh, it was a debacle. We did indeed fire him. But because the "builder" lied to the bank and said he was a complete builder, not an owner-builder type situation (which they prohibited), they wouldn't let us make our own draws and access our money

.What we had to do was fire the loser, and take out all our money from savings, borrow money from my mom. We also had to take out a home equity loan to pay off what we had taken out on the building loan and then we finished building the house.

It was all out of pocket because no bank would give us a loan without a builder. And no other builder would touch us because they didn't want to take over a project that was half-finished. I became the general contractor. I oversaw and contracted everything but the foundation and framing. We completed the house and told the loser builder he could forget getting any payment out of us. I had so much documentation showing the neglect that he couldn't have sued us and won. Plus the bank could have sued them for falsifying information on the original contract.

We had the old house rented out until this past summer. We sold it and paid off the home equity loan.

If you are early in the build and you are unhappy, try to find another builder. I wish we had gone with our gut to begin with. But we did save about $60 K. Although it was so stressful.