Sterling Custom Homes

This contract was a cost plus margin model and every cost is calculated with added mark up and submitted to the client for payment. Client refused to pay balance and in addition asked that we do work not included in the original scope free of charge at the end of the project. There were a handful of items on their punch list at the end of their project that were legitimate and we were willing to correct these minor items. Because they did not pay the balance of the original contract, we requested that the balance of the contract be placed in escrow before completing the work and they refused. We took this as an indication that they never intended on paying the balance. We try to make all clients 100% happy but cannot always do so when customers are unreasonable.

We entered into a cost plus contract with Rob who I was referred to by several people. He said that the ideas I had for improving his home were just what the home needed. During the process, he added 50% to the scope of the project including new windows, converting the base board heating system to gas forced air, renovation of his master bath, re-facing two fireplaces with stone, etc. On all of these extras and because of the contract being a cost plus, I took him on his word when verbally approving the work. Because of the change of scope, the project timing nearly doubled which Rob could not understand and toward the end became upset. Although in the end he loved the quality of work and my ideas and said the home was truly transformed, he used a a clause in the contract that required signed change orders to say he did not want to pay the full bill. Instead, he wanted us to give him a $20,000 credit on the bill and also do additional work not in the originally scope of the project for his inconvenience. When I refused, he cancelled the contract and forced me to take legal action (he still owed $80,000). After 6 months of litigation and $20,000 in attorney fees, the arbitrator ruled in my favor and he was forced to pay the bill. All and all, I worked for 6 months on the project, producing a great product in both design and quality and broke even on the job. The 1 year to finish the project stated was due to the fact that he cancelled the project and found another less capable contractor to complete the remaining 2% which amounted to punch list items.