Just the other day we finalized a estimate and wrote up a contract on a job. When I met with the “owners” with the contract we started signing all the documets. I had pre-signed mine ( first mistake). we got to the Lien notice document required by our state. the owner smiled and said ” this wont apply to us, most of the land is in a trust and the rest is listed as a non-profit agency”. Then I replied that we have to stop here until I meet with my attorney to find the best way to handle the state required forms. I wasnt being nasty or anything , just talking lke this is normal part of business and I need to double check this, that I was not aware that I was wrking with a non -profit agency. ” they never implied it nor would their home suggest it. Their responce was “but we now have a signed contrac, when are you starting”
Ill leave the rest out , but it staid level and clam.
so I have a meeting scheduled with my attorney
any ideas before I start spending 300 an hour
Replies
Sounds like you just avoided a screwing.
Joe H
"most of the land is in a trust and the rest is listed as a non-profit agency"."
I don't know why that would preclude you from filing appropirate liens against the property.
But it does raise another issue. If this property is owned by a trust them the contracts have to signed by someone that is authorized by the trust, probably the trustee.
And I don't know what a non-profit agency is, but is it is a corporation then you probably need a corporate resolution, voted on by the board, to authorize these expenses.
Now you also need to start asking some questions about the assest of the trust and the non-profit to pay for this.
Looks like lots of issues for the attorny.
thanks Joe and Bill
Bill, good points and questions.
I will check with the attorney. Meeting is scheduled for Wednesday
I wonder how many of us check to see if an "owner " really owns the home or project, befor starting
I know it will be one of my new standard questions
and I will not sign a contract ahead of time
"I wonder how many of us check to see if an "owner " really owns the home or project, befor starting"
The county here has an online database. Type in the address or parcel number and you get the owner's name.
> The county here has an online database. Type in the address or parcel number and you get the owner's name.
Here in LA you have to go downtown and get them to look it up. They were eleven months behind in processing changes in ownership about 4 years ago when I had to do that.
-- J.S.
Here they've gone to a computerized system now. The first time you handle a property transfer under the new system, it's costly with title searches etc etc. However, once a property is in the system, transferring ownership is a simple procedure; the lawyer goes to the office with a transfer document, which lists the PID (property identifier number), signed by the purchaser and seller, and the clerk calls it up in the system and changes the record. No title search needed, since once it is the system it has a clear title. Makes property transactions as simple as selling a car.
Where's that? Here I think the back room guys are still in the parchment, ink well, and quill pen era of record keeping technology. ;-)
-- J.S.
Most states have a law that allows customers to withdraw from a contract within three days of signing the contract. Wonder if that law is bilateral? Scott R.
Scott, that is not any and all contracts.
It applies to when a solicitor approaches you to seel something or offer a service. I believe it applies only to when they approach you on your own property. It is to protect homeowners from pushy high powered salespersons. After you get tehm out the door, you have a chance to weigh the options and investigate the competition.
It does not apply to a case such as this where two parties approach to one another over time, eventually negotiating to a point of agreement which is finalized by the formal contract..
Excellence is its own reward!
piffen.. Rhode Island has the 3 day Right of Recission and I have a statement to that effect in all of our ProposalsMike Smith Rhode Island : Design / Build / Repair / Restore
Unless there is some other provisions then RI also is for "door to door" sales.
http://www.rilin.state.ri.us/Statutes/TITLE6/6-28/6-28-2.HTM
Now the way that it is written it appears to cover many typical home improvement contracts. But that is only because of the common way that they commonly sold.
But if you have a showroom and they came to the showroom and started the discussion then it would not apply.
like most of the clauses in our Proposal ... that one went in on advice of our RI Builder's Association lawyer..
along with our lien notice... and our arbitration clause... Mike Smith Rhode Island : Design / Build / Repair / Restore
Piffin, I just extended the credit line on a current home equity loan. I went to their office for the request, had a couple meetings to submit paper work and such. After signning the final papers I was told the extended line wouldn't be available until xxxx (three days later) because of our right to back out of the contract within that time.Scott R.
Is that really labelled a contract? or is it a loan agreement?
I don't mean to split hairs, but the three day thing definitely does not apply to all contracts at all times.
My memory is that this protection from aggressive solicitors came from the federal govt. Since they have some control over home financing (now there isa deep subject) it stands to reason that they would work in the same principle.
I agree that it is a good thing, I just disagree that it is always the case..
Excellence is its own reward!
That is a specific federal rule home finacing. I think only for re-fi's and not orginal mortgages, but not sure.
And there are also rules on "door to door" sales. I think that there is a federal rule on that and a number of states have rules on it. Also some state have rules time share sales.
But there are not general right of recision for 3 days on any and all contracts.
What state are you in.
I understand what you guys are saying, point taken.
Let me re-phrase my question. IF a contract is subject to a three day right of rescission is that right bilateral?
Scott R.
I doubt it.
These laws are all based on "consummer protection". And they assume that there is a sharp salesman and a dumb buyer.
But you would have to see the specific laws for that circumstant.
Don't forget to report back on this.
Both on what attorny says and the final outcome.
I am curious about the trust and non-profit organization. I share Piffin's concerns about this.
Typically if these where "ligitament" non-profit then you would know it up front.
here is where we stand right now
1)"owner ' did not truthfully represent themselves or their role in "ownership"
2) not all documents were signed including state required notice, therefore I do not need to honor the other
3) my contracts need a little more work including adding " signature of those authorized to approve work and responsible for payment"
4) most lawusits are more along the ones of fullfilment once a job is started and money has traded hands, such as sueing for payment for change orders or suing because of not doing work as specified or by dates specified
5) I walked away with both copies of the contract in a sence indicating I was not ready to finalize
6) Advise them that your attorney has notified you that the contract at this point and from all indications is not binding, that your insurence company is advising you not to do the work because of mold issues . that you should not proceed without a state approved mold findings and redematin for mold and that by not singing all required forms the contract is not binding.
7) nicely advise them that if they need clarificatin to contact the attorney and see if they proceed any further and then schedule another meeting with attrorney, or he could send them a letter now which a) would cost more money and b) might make them feel threatend and make them react in a negative way
I'm assuming you got this info from your lawyer. It's all good advice and you got your moneys worth.You get out of life what you put into it......minus taxes.
Marv
Thanks for letting know.
I have a possible upcoming job where the owner lives 3000 miles away and their friend/occupant will be overseeing the work. Unfortunately, I expect that if I take this job I will need to visit my attorney also. My expectation is that the owner would need to sign a power of attorney so that the occupant could act as their agent I could reasonably follow their instructions as though they were the owner. Otherwise, owner could say they never authorized the work or expense. Sticky situation, no doubt, and I'm still trying to decide if I should include legal prep as a line item in the budget.
I am not a lawyer, but here are some thoughts.
Imagine doing a quote for a house job on a nice lot, and you are dealing with Joe and his wife Anne. Joe has not told you this, but the lot is not owned by him, it belongs to his brother John. But you don't know this, you sign a deal with Joe and proceed. You do the sitework, get the foundation in, do a draw request, keep working, get it mostly framed up, ask about your first draw request, because your second is going to get written up and submitted at enclosure time, coming up soon, and your subs are getting anxious.
Up steps John, the brother who owns the land, and slams a big "halt" on the job. You are out a lot of money, and you are in big trouble.
Which part of this land are you building on, the part owned by the trust, or that owned by the nonprofit? If it is the trust part, you really need to be entering into a contract with the trustee. If it is on the corporate part, the corporate officers.
Either way it goes, you probably retain lien rights, but as I said, I'm no lawyer, and don't even know where you are building. Things change from state to state.
Just a question: when you go pull the permits, does anyone there check ownership of the land? Dunno, just asking.
Also, as said above, I don't know how ownership of the land would change a lien; seems to me it doesn't matter who owns the land, you can still put a lien on it.
Actually, you don't have a 'contract' yet since there has not been an exchange of services yet. Ie. you have not taken their money and they have not received any work from you.
You do not have a contract with the landowner in any case and no matter if you do have an agreement with one party on another parties land, you cannot be held to the illegal agreement as soon as you find out that it is on the third parties land.
The reason trusts and corps don't need lien notices is because they already know about liens, private citizens don't and you have to tell them about liens. trust and corps, non profit or otherwise still must pay workmen and suppliers for labor and goods received.
Don't waste the money for a stamp, just call these scumbags on the phone and tell then "Sue me."
What are they going to tell the court? "Uh, yer honor, dis guy signed a contrak wit us to build a home on a third parties land and he don't wanna' do it."?
On second thought, don't say "Sue me" since they probably record private conversations, just tell them that there is no binding contract and you will never work with them.
SamT
I agree, signed or not you don't have a contract .
A contract is described as a as a "meeting of the minds", a point of agreement.
Obviously this hasn't happened.
You do have a contract and it does carry obligations on both parties. However, information related to one of the clauses was held back and must be addressed before proceeding any further. Yes chat with your lawyer and ensure that your investment in their property is protected.
Gabe
I don't know if I'd agree Gabe, without seeing the paper and the details in it. If it lists Joe and Judy Blow as owners of the lot, when in fact they are not, the contract could be seen as a deliberate misrepresentation of facts. The trust should be listed as owner and Joe Blow should sign as president, or trustee or whatever his title is.
Of course, it is possible to have a contract betweent two parties to do something on a third parties property but every contract I have seen for construction lists the owner of the property. My contract includes it as "To >...> on your property located at _______"
When they sign the contract, they are acknowledging that they represent that property as belonging to them. Before getting to the point of preparing the proposal or contract, I have asked them for all the pertinent information.
Here, it is not possible to obtain a building permit unless the owners name on the application is the same as listed in the tax assessors records, and the applicant is able to show legal power of attorney to act on behalf of the owner..
Excellence is its own reward!
You have a valid point in as much as "who" has the authority to bind the corporation as well as "who" would benefit from the work about to be done. If your work improves or increases the value of the property, regardless of who owns it on paper, then you should be able to collect for your services.
The flag I see on this specific case is that information was left out. Was it left out to deceive or defraud? Regardless, I wouldn't continue without guarantee of payment.
Gabe
I have a clause in my contract that says that by signing the contract, the owners are stating that they are the actual owners of the land and structure, or the legal representative of the owner. I make sure everything checks out at the building department, and with the names on the deed or site survey, which the owner is required to supply for the permit application.
After 30 years, I sat down and tried to think of every possible way the owner could screw me, and I tried to cover it in my contracts. After every project, another clause or two goes in, because I come across another possible loophole. Take nothing for granted, and you won't get screwed. I have yet to have a client who has complained, "Is all this necessary?" They always accept the prudence, because it protects the both of us.When all else fails, use duct tape!
'after 30 years"
yeah it has been many a year and each year a new curve ball gets thrown at me (us) and our "terms and conditions" get longer and longer
pretty sad
Bumping this up to the top to keep it current, so what was the outcome of your meeting with your lawyer?
Gabe
each year a new curve ball gets thrown at me (us) and our "terms and conditions" get longer and longer
this could be as dangerous as no clauses
use to work for uncle, wanna see clauses? look at the Far and DFAR
since i was responsible for RFP/contract preparations i watched some of the legal stuff.
uncle has lost in court cause since they had clauses for so many things it was interpreted something was purposely left outbobl Volo, non valeo</P
It may be a valid contract is some states but in Maryland it wouldn't fly.
Why would it be different in Maryland as opposed to the rest of the States and Canada?
Are contracts not binding in Maryland?
Gabe
Very binding.
Mutual assent has not been reached weather it's signed or not. lien is part of the contract, one expects signature other refuses. Both parties are clearly not in agreement.
Also there has been a misrepresentation of parties involved and vital information withheld. Big contract no-nos'
You have a point in that it doesn't appear that the other party signed the formal written contract, however they did agree on the terms of verbal contract "A" prior to the execution of contract "B" which contains all of the finer points.
Verbal agreements can be just as binding as written agreements.
A request was made for quotes. Quotes were submitted and one was accepted in principal. Costs have been incurred by both parties at this point and as such could be considered damages if the contract has to be re-tendered if the contractor refuses to perform the work or if the client fails to go ahead as well.
Contract law is an evolution that is never ending. A contract written today could be worthless tomorrow if conditions changed dramatically.
Sometimes attempts at making contracts bullet proof make them too one sided to be legal.
Gabe
Agreed... "if it wasn't for lawyers, we wouldn't need lawyers"
Actually, I'd say "if it wasn't for people trying to screw each other, we wouldn't need lawyers"
I would say you do have a signed contract. This contract may not be inforceable because the signers do not own the land. Take a drive to the county court house and find out who owns the land.You get out of life what you put into it......minus taxes.
Marv
It may have a signature at the bottom but if something was handwritten in, then the change would have to be initialed. I have to do this when I write the dollar amount in the space for the date.
~Peter
I've been mulling this over some more.
I may be a little prejudicedd here in this, becaused one of only two people who have ever stiffed me in my business life was a non-profit.
If these people have no outwardly bonafide reason for being a non-profit corporation, then they are sneaky, hiding behind a shell cover in order to screw the govt, otherwise known as all of us. If they are the kind to go to that much troub;le to screw the govt, why should we think they would not stop at screwing you?
Be sure to note that I prefaced that statemnet with an "IF"
Excellence is its own reward!