Oh, yes. It really happened. Rough electrical done; plumbing roughed in; insulated, sheetrocked, crackfilled, stairs in, interior doors on, ready for flooring, painting, cabinetry, final electrical (ie, outlets, switches, lights to be put in and wired), final pluming (fixtures to be installed), and final details to work out. And the front steps, and one small bit of siding that needs to be done.
Lawyers will be busy, I expect liens to be flying all over, since it doesn’t look like any suppliers have been paid for materials.
How many of you guys have been in a mess like this? On which side?(Homeowner vs Bankrupt GC vs Unpaid sub)
Care to share your tales of woe?
Replies
What side are you on? If the HO, have you made any payments to the gc? Lien waivers?
Do it right, or do it twice.
Not me thankfully. Guy here started some kind of check kiting scheme and defrauded people of millions. The day it was discovered in an audit, he was in the midst of building yet another mansion. He took a revolver and stuck it in his jaw. The only folks who got their money was the bank. Everyone else got the shaft. A good friend had 50 solid mahogany doors, 9' tall, with gothic arches ready for delivery. Ouch. As a sub, liens are what you do, but they don't always do any good.
"The child is grown / The dream is gone / And I have become / Comfortably numb " lyrics by Roger Waters
You are talking about Knoxville right? Or how many guys like that are there?
deblacksmith
There was a pretty big one around here about five or so years ago who went belly up. It was a family business and they had about ten going at the time. It messed up a lot of homeowners for a long time because none of the subs would finish them until they were paid. So essentialy the ones that had already paid the builder a draw for the subs to rough in had to pay the subs again because they had never been paid the money the first time. It also caused hard feeling among different contractors because some broke the gentelmans agreement about taking over jobs that others had started. There's a plumbing / Electrical contractor that did this to my old boss on a couple houses that he hadn't been paid for. I still won't talk to the back stabber when I see him at the supply house.
Who Dares Wins.
Gunner- How did you get such a long single line in that last post. Tell me you're using a 48inch monitor.
I don't know sometimes genius just comes to me. Before I hit post I got up to let the dog out and when I did arm from the chair kicked the key board up and jammed the space key. When I got back I thought that I had deleted everything some how. I figured out what I had done and hit back space untill I saw my text again. It looked like it was in normal context so I hit pot. It's pretty weird huh?Who Dares Wins.
Great. Now that everyone knows how to do it, I suppose we'll all have to keep the pointer on the side scroll just to get to read Breaktime.
Or get 40" moniters. :)Who Dares Wins.
since mine is a 56" monitor it won't bother me.
To bid or not to Bid that is the question
Time and material or bid? I used to only do T/M but I've recently done a few bids and come out allright. I think the key is just is to be really expensive and do a good job.
jason
The thread was started more to provoke discussion than anything, but for the record, we are the homeowners. We have paid a significant (70%) chunk of cash to the GC, but that was based on milestones and progress, so it is probably pretty well a wash. And yes, the lawyers have the holdbacks as required by the liens act.
The subs aren't going to be happy, though. I have a gut feeling that no supplies have been paid for, and that only one or two subs have been paid. I expect that the amount of lien holdback available is not going to be a very high percentage of the total claims. And therefore, it's unlikely that those subs will be eager to come in and finish the job under a separate contract.
For those subs who have been through this, what percentage do you typically wind up getting when you actually get some of the lien money? Seems like a lot expect 0 to 25% of their claim. In my business, when a customer goes belly up, we usually get nothing at all. How do you feel about finishing a job under a separate contract for another party? I'd be interested in hearing about it.
My interpretation of a lien waivewr is apparently a bit different. You seem to imply that it is a certain pertcentage withheld from the invoivced amount to ensure completion. My experience is that the contractor, the subs, and the major suppliers sign a statement with each invoice stating that they have been paid in full to that point, so the sub & supplier wouldn't get too far in the hole.
Do it right, or do it twice.
I am not sure how all liens work or if there are different types of liens, but 20 years ago I filed a lien on a house that I sold. I was the original home owner and financed the new buyers down payment, I really needed to get out from under this house. Well the buyer never repayed so I filed a lien. 15 years went by and I had forgot about it. The amount was $2,000 and I had just chalked it up to a learning experience. One day I get a letter from the bank, it seems that the owner want to refinance or sell and there is the lien. The original loan to the new buyer was for 10% interest, so to clear the lien I had to be paid the $2000 plus 15 years of interest at 10% compounded.
As the home owner, I don't think that you would want to get caught with this hanging over the mortage, and if there is intrest applied to the lien like in my case it is only going to get worse. Not sure what you can do but I would start talking to an attorney.We are the people our parents warned us about. J. Buffett
was thinking about this and think Mike is right. Go talk to YOUR attorney.
my understanding of liens is that it is to insure the suppliers and trades get paid. If it turns out the HO pays twice (once to GC, and once to trades/suppliers) then that's they way life is.
that's why it's important to get waivers along the way.bobl Volo Non Voleo
I have a lawyer so I alwyas get my 100% and so do my subs.
You did get lien releases from the subs when you paid the GC?
Talk to the subs and make them happy if not whole. treat them right and they will finish up for you.
My brain's working again (well, it's working better)...I lost my train of thought thought in my least reply about lien waivers. the lawyers have the holdbacks as required by the liens act Are you talking about retainage? That's keeping 5-10% of the invoiced amount to be sure the contractor completes the work and takes care of any punchlist stuff. The lien waivers I'm referring to are a legal defense for the payor to ensure that the money is actually going to the suppliers and subcontractors. Otherwise, as someone else pointed out, the HO could end up paying twice for the same work or material.
Do it right, or do it twice.
I remember only one track builder that went bust. Now he owned the lots and when he went out depending on the amount owed to the subs some got unfinished houses as payment. One excavation contractor got three and spiraled it into a 400+ / year building operation which he just sold at the ripe old age of 45 and retired.
Most of the buyers got screwed.
_____________________________________________________________If you were arrested for being a quality builder would there be enough evidence to convict you?