What a day!
Here’s the deal. After 3 months of negotiation, and design/ cost revisions with the Arch and Clients, I signed an Agreement with a Client/ Couple (July 2). Agreeement = $500K. Payment Schedule: Deposit at Signing = $125K (25%); $50K 2 Weeks before Start Day; $75K at first weeks end; 50% balance would be due as work is completed or as materials arrive to site. Job was slated to begin on site Nov 4.
I usually recieve a 10% deposit at signing,and always state that it is Not Refundable. The 10% deposit reserves time in my schedule for the Client. I rarely recieve a 25% deposit on such a large project so far in advance but many of the fixtures had long lead times and we had a finite window of how long the project could take on site – 120 days. $1K per day fine for any days beyond up to 21 days (Co-op rules, HO pays). Don’t even think about after 21 days – $10K per day.
On July 9, I:
a) Ordered all the plumbing and electrical fixtures.
b) Ordered the stone tiles – $12, $35,and $65 per sq.ft.
c) Rented a storage space for all the fixtures and materials.
d) Gave a deposit for the cabinetry (Kitchen, Study, 2 Bedrooms, and 3 Bathrooms).
On Sept. 16, I:
a) Placed the order for custom mohogany flooring.
b) Ordered the custom 7′-0″ and 8′-0″ doors
c) Placed the order for all the custom mouldings.
d) Gave deposits to all the subs to reserve my place in their schedule.
I also did not book ANY other work for those 120 days or for 1 month after. I do not want to “F” up on this one.
On Oct 14, I recieved a call from one of the Client’s sisters, that the other Client had a car accident and was killed. The job was cancelled and I should return ALL the deposit since the “begin date” was still weeks away. I offered my condolences and to help with anything they needed. I then explained that for legal reasons I should be contacted by the surviving Client directly since that is whom I have the Agreement with. She told me that I was insensitive to make him deal with this himself during his time of greif but she would have him call me and I should not “go out and start spending the money.” I was as polite as can be and was even told by an Arch with whom I was meeting that I handled the conversation with compasion and sensitivity. Her words, not mine.
I immediately called all the Arch and Subs to stop work and sent a letter to the surviving Client and Arch, registered mail, documenmting the phone call.
The Client called me Oct 25 to tell me the job was cancelled and we should meet to discuss the finances. I immediately called all the Subs again and told them the job was 86’d and to return the deposits. Some returned the whole thing since their phase of the work was not scheduled for months yet (painters, wall paperers, tilers, etc.)
Demo, plumber, and electrician kept 20% of their DEPOSITS.
Cabinet man wants balance due on cabinetry since they are done except for priming. ( Yes, this is a first for me to have the cabinetry completed prior to the beginning of a job, but I had incorporated some serious fines for lateness along with some very nice perks for being early – dinners, shows, etc.).
Custom mouldings kept the cost of the new knives – now I own.
Plumbing supply will take back a few things – no charge, but most ($23K) was final sale ($3K showerbodies, $4K sinks, 2 $3K whirlpool tubs, etc.).
Electrical supply will take back everything but a $1,200 candelier, 4 custom sconses ($10K), and all the lamps ($750). I will be charged a 10% restocking fee – usually 25%.
Doors were already in production when I called on Oct 14. I was refunded 80%.
Tiles arrived last week.
I have not yet taken out my fees ($35K), having figured the lions share of the $50K check due would have covered my costs. After I am paid for my services and pay the cabinet maker his balance due for the cabinets ($40k minus $7K for priming) the $125K is gone and I am owed $53K.
I now have $22K not yet dispersed.
We met this morning. I showed him photos of all his fixtures and materials in storage and offered to take him there. I brought along all the correspondance regarding when I place the various orders and the memos sent to the Arch and Clients keeping them up to date. Then I showed him a breakdown of how the monies were spent and where more money would be needed. He was extremely polite but amazed the I was so far into the project. I reminded him of how we had discussed how I planned to meet the 120 day schedule, prior to signing the Agreement. He acknowledged the conversations but was surprised to see how far I had gotten concidering all the horror stories he has heard about friends’ other GC’s.
We then discussed how to wrap this thing up. I am looking for money. He is looking to let me keep the fixtures and materials but return the $22K. I still have a 48″ range hood, over 250 sqft of marble tiles. and misc plumbing and electrical fixtures (all mint) left over from other jobs and don’t need any more. I once had 7 sheets of Corian a few years ago and could not get rid of that color unless I gave it away. Ended up gifting it to my Mom and Sisters’ kitchens for Xmas.
So what do you guys feel would be an equitable solution? Keep in mind:
a) The cabinet maker wants his balance due ($38K) and then I have to do something with the cabinets (Family project?).
b) If I keep and store the material, it will continue to cost me($250/ mo) until I get rid of it. It will not pay my mortgage, rents, etc. If I go to E-bay we are talking more work and discounted returns.
c) I have not been able to book anything for the next few mos. With the holidays coming up it is slow and the projects I do usually take 2-3 mos to negotiate.
The Clients were so nice during our negotiations and conversations during the summer. I know he is greiving and I am not interested in taking advantage of him. My future behavior will secure or ruin future referals with this Client and Arch. This is not a bridge I want to burn. But I am not a Rockefeller either. What would you do?
Edited 11/22/2002 4:32:10 PM ET by Frankie
Replies
Sorry to hear of your problems. That really stinks - Hope it never happens to you again.
I guess my thought would be to try to negotiate it out to where you don't make a profit, but cover your costs. It wasn't your fault the customer was killed.
Probably the sooner you unload the merchandise, the better off everyone will be. As you said, the storage costs will only make it worse as time goes on.
Good luck - Hope it works out as well as possible.
I'm writing a book. I've got the page numbers done, so now I just have to fill in the rest.
have you contacted your lawyer yet ?
also, what are the circumstances ? car accident ? who was at fault ?ask your lawyer if you can bring suit against the estate..
if they won't negotiate, then you have to either eat it... or seek legal address.. you sound like you run a pretty sophisticated operation... so what does your contract say? what does your lawyer tell you your options are ?
Mike Smith Rhode Island : Design / Build / Repair / Restore
Thanks for the response. Yes, lawyers can have a field day with this situation, but I am not looking for a "lawyer" solution. I am asking what other Contractors and HO's think is the right thing. I have invested alot of time into this project but really feel for the Clients' . They have lost much more than I.
BUT...I have worked on this project since last April and working in good faith have assigned my fee to purchasing of materials and scheduling Subs in order to meet their restrictions regarding scheduling. I am not looking to make much of a profit but I do have overhead, time costs and got nothin' coming up - because as a selling point I stated I would not take on any simultanious Clients. Ah ha! I put all my eggs in one basket and now I'm screwed. That's gotta count for something.
All in all, we are reasonable and intelligent people. We can resolve this. I'm just asking for your wisdom and experience. I have never sued anyone (except for one HO who sued me first so I countered and won) and have just walked away in the past. But this time it is a hec of a lot of pesos.
I have left a message for the Arch, but do not want to involve/ depend on him too much. It may sour the future.
Dear Frankie
Wow what a story....
First things first - you had a contract that they ( the remaining parties) are still in contract with you. You should as a minimum be paid your exspences which includes purchases and cost (reasonable ) for your time. This is the same as starting work under a letter of intent as opposed to a contract. But you have a contract so read it and follow its guidance. You could probably be succcessful in a loss of profit claim and should as a buisness man make the case - though you seem reluctant to do this.
What would you do if you were half way through site construction?
One question - why are you worried what happens to the goods - they belong to the client who instructed you to order them on his behalf - where would he like them delivered.
One answer - You and the team are obviously into this project and it should be a saleable item - why not finish it for the client and then they can sell it or why not offer to buy them out ( for a reasonable sum )and do the project yourself or with funders?
If you do not want lawyers and a adversarial approach - what about arbitration or mediation
Regards
Phil
Not being a lawyer. think you should meet with the clients executor of the estate and try to work this out. You should be made whole (paid for all expenses). I dont think you should have to eat any of the cost incurred by you. Again I think communicate with the clients executor. Then go see a lawyer as a back up because trust me..they will.
At Darkworks cut to size made to burn......Putty isnt a option
Frankie this is a tough one, but here are my two cents for what it is worth....first off I am married to a builder. I think you are going to have to contact a lawyer. My feeling is this guy is going to tell you keep the stuff and I want my money back no matter what. This is a new home right?
I think you should make a profit to be honest. You have done the foot work, spent time etc. Not to sound mean and I know that the man has to be at a loss you still have to feed your family and you have employees that need to feed theirs etc. If you have enough cash built up and you can eat it I guess you can count it as a loss and move on. As far as the stuff you bought let me just say it is his stuff and you wouldn't have bought it for yourself would you. How can you keep it pay rent for the storage and have to take a loss? That is a big overhead that you didn't budget for. This is a really sad situation, but you have to remember you are a business person also. That sounds like I am being cold and I don't want it to, but honestly the man owes you for what you have done and it shouldn't be up to you to fit the bill.
Good luck and please come back and tells us how this goes.Tamara
Not all lawyer solutions involve court cases. Start with advice. Just talking it through with someone who can objectively lay out the options will clear your mind and help you focus.
I think you have done above and beyond what 99% of "builders" would have in a very professional manner. You can be proud of that. Continue in the professional vein.
Other than a visit to the legal beagle, my advice would be,
Write a letter informing him that it is necessary for you to recieve _x_ dollars by X certain date to satisfy the terms of the contract for remuneration of your invested time and cash. Detail what you will do if you do not recieve it, including holding a liquidation auction of the goods. That sale should net you the balance owing you and possibly leave some cash to return to him. Remain sympathetic but professionally unemotional in your reactions in awareness that he will be effected by emotions and escalation of that situation is non-productive.
From me to you - Best of luck - this industry needs more people like you. We can't afford for you to get discouraged or burnt out.
.
Excellence is its own reward!
"The first rule is to keep an untroubled spirit. The second is to look things in the face and know them for what they are." --Marcus Aurelius
Frankie... this is basically a "time is of the essence" contract... it must have been very specific...and by your description, it was..
who drafted it ?... the architect.. the owner... or you ?....i'm guessing it was the architect and the owner's lawyer, and you had it modified..did you have it reviewed by a lawyer before you signed it....
I don't use lawyers for our normal course of construction.. but i also never sign "time is of the essence " contracts with liquidated damages.. you did..
you can empathize with your client all you want...but he has his hand in your pocket.. you'd better know exactly what your options are..you asked what other contractors would do in your situation.. what i would do is consult with the best contract/construction lawyer i could find.. then i could deal with my client and his loss from knowledge instead of ignorance..
these people sound like they are very sophisticated.. you'd better get yourself on an equal footing.. then you can give away the ranch if you want to.. you've already bet it...
you are entering another man's world.. the brotherhood of lawyers.. you'd best have a member of the fraternity representing and advising you
but hey, whadda i no ?Mike Smith Rhode Island : Design / Build / Repair / Restore
As a corollary, after all of this is done, what do you expect to include in future contracts to account for situations like this? Does your contract have a "force majure" clause? Will you spell one out in the future?
What's a force majure?
force majure is French for overwhelming power or irrisestibale force. Contracturally it refers to an event or events that allows either party to get out of delivering their contractural undertakings. Check your contract, is force majure an item? Is the death of one of the parties to the contract a force majure event? If not your contract still stands, the parties are you, the surviving client and the executor for the deceased client. For your own (and your families) piece of mind all contracts you sign should contain a force majure clause that at the very least protects you and your estate from crippling damages in the event you are disabled (or God fobid killed) and thus can't complete a project.
I've been in a similar situation - wasn't a death, but the contractor at the end of the first week realised that to complete the contract would send him bankrupt. The solution, as eventually signed off by the lawers, was pay for all work done and materials delivered up to the withdrawl date less a penality representing the client's (in this case me) administration costs.
will now read more of the thread
Edited 11/23/2002 6:50:18 AM ET by ian
Ian explained it just fine. I think of it as including "Acts of God," like what if a tornado wiped out all the work at the 75% point, or what if you died (leaving your survivors to finish the house?), or what if the earth was covered by locusts?
Just for kicks, here's a sample from a non-construction contract:
"8) FORCE MAJURE
Buyer shall not be liable for any delay or failure in taking delivery of all or any part of the Goods, or for any other default in performance of this Contract due to the occurrence if any event of force majure (hereinafter referred to as "Force Majure " such as, Act of God, war or armed conflict, ........, or any other similar cause which seriously affects Buyer or any of his customers, directly or indirectly, connected with the purchase, resale, transportation, taking delivery of the Goods.
In any event of Force Majure, Buyer notify Seller in writing of such event(s) and Buyer may, in its sole discretion and upon notice to Seller, either terminate this Contract or any portion thereof affected by such event(s), or delay performance of this Contract in whole or in part for a reasonable time.
If seller is unable to deliver the Goods in whole or in part as specified on the face of this Contract by similar reason(s) as above-mentioned, without Seller's fault, Seller shall immediately notify Buyer in writing of such delay with the reason thereof, and Buyer shall, if requested by Seller, agree to extend the time of shipment until such event(s) shall no longer prevent delivery by Seller. In the event, however, the above mentioned event(s) cause a delay beyond thirty(30) days, Buyer may, in its sole discretion and upon written notice to Seller, terminate this Contract or portion thereof affected such event(s), and Seller shall reimburse to Buyer any amount of money paid by Buyer to Seller with respect to any undelivered portion of this Contract."
Just checked with DW, my language consultant. It's actually spelled "Force Majeure" and it's French for "major force."
Frank,
Very sorry to hear of your situation. I am the LAST person to advise you to contact a lawyer, but that is the only thing I would feel comfortable doing. Not just for your sake but for the clients as well. This is one of those situations where nobody is going to win. Allow the courts to work as arbitrator here and accept that decision. You will most likely get hurt here, but perhaps not so bad with counsel advising you as to what you deserve. Best of luck, I hope all works out.J. D. Reynolds
Home Improvements
"DO IT RIGHT, DO IT ONCE"
Frankie,
Tough spot. One of your early statements implied that you're worried how the arch and others in the clients' circles will perceive your actions. The implication being that if you insist on the surviving client fulfilling the contract, or at least compensate you for your time invested and lost income, you'll be seen as "insensitive". Therefore, you should take a big monetary loss.
Well, my two cents is that the arch, surviving client and those in his/her circles (that represent future work), will respect you if you insist on protecting your business interests. And any future work will grow out of this respect, and your reputation as a project manager and craftsman. If you allow yourself to be financially abused, people will expect to be able to take advantage of you.
Best of luck in coming out ahead on this. And thanks for sharing.
Cliff
CAP, you are so right. Every conversation with a client is setting a precident for future negotiations.
Thank you all for your advise. I am meeting with the Client after Thanksgiving and will let yuo know how it goes.
F
I wonder if the Arch is "returning" that part of their fee for monitering the construction?
bobl Volo Non Voleo Joe's cheat sheet
Edited 11/26/2002 8:19:12 AM ET by bobl
How did it go?
I'm sure we're all interested to know how it turned out.
Ian
Things seem to be going well (read civilized). Hope to have it resolved during January. December was a very delicate time for everyone. Clearer heads should prevail.
Thank you for your concern. I'll let everyone know what happens.
I'm with Ron, you can damn sure bet this guy has contacted a lawyer who is looking in a way to get his client out of the contract, it sounds like you have some pretty specific stuff ready to go into this house which means your not going to be able to offload it easily, Its a crappy situation no matter how you look at it, but remember your in business and sometimes doing what is right for the business isn't what you want to do. Honestly letting the guy out of the contract as it stands is being nice a lot of guys wouldn't do that with all that you have invested at least not with out a fight. If your willing to do that, he should be willing to meet you half way and pay what cost you have occurred, before you do to much else I would find out what legal ground you have to stand on, Could you hold him to the contract etc, not that you should do it but it will give you an idea of where you stand. You can be understanding but at the same time, letting him walk with you being owed 50 some k doesn't feed your family.
Frankie,
I'm not a contractor, but you've really got to see a lawyer on this one.
Looks like they ate up a huge amount of your time, insisted on a really tight time schedule, with penalties, to make sure they were in their house on time. And that time schedule is what bit them.
I just can't see how you can keep all those special order items. You'll be lucky to sell them for 25% of what you paid, and it could take months to get that. I doubt you'll get that much.
Get your lawyers opinions, but I think I'd give them two options:
1) Contract continues, we build the house, then you can sell it. Seems sensible, otherwise he'll be stuck w/ all that fancy stuff he has no use for. I wouldn't even consider keeping these items. Seems like he's already stuck for around $170K, if he's fair to you. Should be a fairly easy sell.
2) Pay your bill. Figure out a reasonable bill with your attorney and present it. You'll lose not only the time you've already spent, but months of planned labor, and the profit from the project.
If you have to, you may have to take it to court. I'd hate to do that.
& this should probably be #1 give him your heart felt condolences, which I'm sure you already have.
I just can't imagine how you can possibly eat something this large and stay in business. His situation really stinks, but he could still build and live in or sell this house. He's choosing not to, which is understandable. Also, he still needs to honor his contract w/ you, and ensure your time was compensated.
A lot of people would hold him to the contract w/o another thought. I really admire you for letting him off the hook, but he cannot reasonably expect you to do so at your own expense.
I've been able to avoid lawyers, but they do have their place. Someone has to help arbitrate messy situations. Particularly ones that are as murky as this one is.
Although the clients are in a tough situation, don't let them transfer their hardship onto your shoulders. The death which occured is certainly no fault of your own.
First off, I agree with the others here that a consultation with a lawyer would be extremely prudent. Not that it's desirable to pursue a legal option, but you'd better have your ducks in a row if things end up that way.
Unless your contract states something to the contrary, it seems completely logical that any materials purchased thus far, and any actual work done to this date is billable. The materials purchased and the work performed was done to benefit the clients -- none of it would have been otherwise undertaken.
I think the simplest thing to do would be to inform the client that the warehouse of materials now belongs to them. They paid for it -- it's theirs, not anyone else's. If they want to draft a separate contract to put you in charge of liquidating it, fine.
It sounds like you've been very professional and sensitive in this matter. Continue on this course, and remember not to let them put the monkey on your back.
Good luck with all of this.
Ragnar
Possibly sell everything at public auction, then lump all the money together and see what's what. You should be paid your due despite the circumstances.
Thank you for all your input. Just came back from dinner and am beginning to develope some perspective.
1. The Client owns everything I bought and can't return.
2. I would prefer not to deliver it until I am paid for services rendered. What is done with it after I deliver is not my concern. But what if he does not have a place where he wants me to have the unpainted cabinets delivered? We're taliking $73K worth of cabinets.
3. A lawyer is required even if at first, only as a source of information and legal options.
4. The Client has his problems and I have mine. Do not confuse them.
5. MY money is in HIS pocket.
6. I have to find a copy of the standard AIA contract to see how it addresses this type of situation. More perspective.
7. I write all my contracts and have never included a method for terminating the relationship. Maybe it's time.
8. One lesson I have learned in the past few years is that contracts merge "relationships". Use the relationship. We are still reasonable people. Am I dreaming?
9. I can put a lien on the apartment thereby preventing him from selling it before he pays me.
10. Seems we are all in agreement that I am owed money.
Thank you for your comments. Keep 'em coming. I'll let you know how it turns out.
Let me start by saying that it sounds as though you have it figured out pretty well so far. I would be emphasizing the fact that it was their scheduling that got you so far out in front here, and it was your intent to meet your half of the contract if at all possible. Does he already own the land for this project? If so what are his plans for it now? Seems as though it might be best to build and sell it, as he already owns a bunch of stuff in storage!! It must be easier to sell the cabinets in a house that they were planned for, versus discounting out of a shop/storage space. Who knows, the house may be built as a memorial for the deceased, although someone else should be the one to suggest it. Emphasize as gently as possible, that if you have to pay anyway, you might as well get a beatifull home out of the tragedy. Good luck!!
Dan
OK.
First, how many parties are there to this contract. There is you, but on the other side is there one or two parties? If there is more than one client (ie husband and wife both signed the contract), did they sign as individuals, as a partnership or on behalf of an incorporated body. This will tell you who you are negotiating with. Where a husband and wife both sign a contract a concept of "joint and several liability" usually applies, though there are exceptions. In essence this means that should the partnership fall apart (through death or divorce) you, as the contractor, can chase either or both of the other parties for your costs.
Now as I understand the situation the other party wants to walk away from the home he and the deceased had planned. His options are to liquidate the property and the goods you have acquired for him, or to complete the project and then sell the finished project. My advice to him would be to finish the project and then sell but in the end that is his decision.
Is a morgage lender involved, if so you may have additional leverage. The lender will want their investment protected and may finance completion of the project to ensure this happens.
Your situation is that you have a contract, that allows (maybe the word is "requires") you to complete the project. If you could carry the cost, you could complete the project and then sell it to recover your costs.
My suggestion is to work with the survivor to reach a solution that you're both happy with. At law, if the other party wants out of the contract, you are entitled to the profit you would have earnt if you had completed the project. All your expenses (including management hours) should be met. If necessary lodge a claim with the executor of the deceased estate. This is messy but is one of your big sticks. I would include the quantim of your expected profit but would be prepared to negotiate this to maybe zero to reach a resolution.
The fact that you are now not working, when you expected you would be is a risk that you took on when you signed the contract.
good luck and try to minimise the lawer involvement.
uh.. oh....this should set off alarm bells:
<<<7. I write all my contracts and have never included a method for terminating the relationship. Maybe it's time>>>>
you need legal advice fast.. and it should be a lawyer who specializes in contract law.. one of the problems of writing your own contract is that the courts determine that any thing subject to interpretation should be decided against the author.. you wrote it.. so any confusing parts or areas subject to interpretation ( who would think ? ) are generally decided in favor of the other party...
now some states are very anti-consumer.. you know.. "let the buyer beware'.. or caveat emptor.. Texas comes to mind.. but in any case.. i'll bet you dollars to donuts that your greiving customer has already retained counsel.. as well he should..
sorry buddy, but they don't call us "Contractors" for nothing.. it's what we do.. we may think of ourselves as builders.. but we eventually live or die by our contracts.. and the experts in contracts are construction contract lawyers.. so get help.. and have him review your standard contract ,while he's at it , for your next projectMike Smith Rhode Island : Design / Build / Repair / Restore
Frankie,
Do not take the hit on this. I can't quite get a handle on what your total losses will be if you do, but it seems like an awful lot of money. I agree that you should strongly suggest completing the project. The client and his family etc. are acting in their best interest. What if your wife had died? God forbid. Would they let you deliver the materials and wish them well? I doubt it, but I don't know. It's very unfortunate, but as others have said, he will have an asset to sell if he chooses. You are compassionate and sensitive to their loss, but you need to be paid.
Rick
Frankie, This sucks.
Did the clients have children? I assume they at least got a mortgage for the project. I would hope the wife would have had life insurance or mortgage insurance to cover any outstanding dept. If so the husband is not stressed financially to cover the costs of the wife dying.
You should separate your self personally and professionally. Personally send flowers and condolences to the family. Professionally look after your business and subtrades.
It sounds like you are a awesome contractor.
Good luck,
Ace
I am confused about one thing. You said your contract was for 500K and also said your fee is 35K. That leaves 465K. I assume the owner is under the impression that 500K gets a completed project.
If your agreement is that for 500K from party A, you as party B, will pay for labor C and materials D, who do C and D contract with. As third parties to your contract, they would be under no obligation to negotiate prices with you.
frankie... watch out .. this is going to take a turn into somewhere over the rainbow.. robert is convinced that no one is allowed to hire employees or to profit from other people's labor.. wether they are employees or subs..Mike Smith Rhode Island : Design / Build / Repair / Restore
HUHB?
There's nothing you said or asked that has anything to do with this situation..
Excellence is its own reward!
"The first rule is to keep an untroubled spirit.
The second is to look things in the face and know them for what they are."
--Marcus Aurelius
Today was the Big Day. As you might imagine, I have been giving this day a lot of thought. I figured from our previous meeting that their strategy would be continue to minimize whatever work I had done. This seemed to stem from not having a true understanding of what goes into a Project, especially since they did not see anything (in the Apartment), yet. I had to better demonstrate that the work I preformed was not limited to a couple of phone calls and scheduling trades. I had a car service waiting outside the apartment building (nice new black Lincoln) for a trip to the storage space and the cabinet shop.
In the Apartment, the Cast included Surviving Client, his sister (remember the phone call?), the Arch and Me. I met them all in the Apartment Living Room. It was apparent that they had been together for some time. Hmm, maybe to gather their thoughts/ position. I should have anticipated this involvement for the Arch - after all he is under their employ. Now I know for the future. They seemed very comfortable in the Living Room with pads and coffee. I don't know how you all would feel but I felt it was a little TOO comfortable and I didn't think a sofa was the best place to state my case. So, I said that it might be better to move to the Dinning Room. They all looked at each other for direction when the Client said okay. His sister was not pleased (note to self).
There I unloaded my bag and proceeded to set up a display of all the work that had been done. This included the photos which I brought to our earlier meeting; ALL the receipts for orders placed, materials purchased; storage facility contract; phone bills cooresponding to phone calls and faxes, all coorespondence which included requests for add'l info as in tech and installation specifications, conformation of model #'s and features; contracts I had with my subs (basically a regurgitation of the Aggreement/ sub); 4, yes 4, copies of the Arch Drawings - 1 Bid Set, 1 Agreement Set and 2 Revision/ Partial sets and related Sketches 1-23; the Job Log; and the Cherry on the Sundae - Release of Liens - one for each of the Subs and Supply Houses. HA!
As I walked everyone through this Dog and Pony Show the Sister made a comment to the effect that all this is, is paper pushing and I was actually spoon fed everything by the Arch. She left the room and came back with the Project Spec. Book prepared by the Arch. I told her that it this was really not the case and that I really preferred NOT to go down that road. Then she insisted.
So, I brought out MY Spec Book. In it were the Arch Spec's and My corrections, ie: laundry box he spec'd was only a surface mounted valve, no box or drain component; dimmers were for incandecent dimmers rather than electronic or magnetic, same was true for the remote switches; transformers were not a part of the Arch''s Specs; Special Material Spec #'s in MINE included a swatch of the material... Things got very quiet. The Arch seemed a bit nervous. So I mentioned that one of the reasons I am so valuable to the Arch's I work WITH is that they can focus on the Design while I focus on the Technology. It seems to make a more efficient use of their time. (Pretty good, eh?) If she pushed anymore I was prepared to show her the Hardware Schedule he submitted in comparision to the Schedule I finally had to do, and have him sign off. Did not have to go there. WHEW!
Then I told them I had a car waiting downstairs to take us to the cabinets and the storage space. They hesitated but I told them it was very important. When we got to the cabinet shop - a huge place, industrial building kept very clean - they met the Cabinet Maker and saw mock-ups of the Kitchen, and Office Cabinets, Bedroom Closet Interiors, and Vanities. Again the Sister: "How do we know you have not been working on this for the last 2 months. You did say that you had no other work planned." The Cabinet Maker sighed and walked away. I referred to the photos they had seen at our Nov. meeting and explained that though I had not booked any other jobs, the CM had. Look around at all the other projects. (Afterwards he told me that he had delayed delivery of two jobs so they would see a full shop. He's Good!) At this point the CM returned with a piece of paper in his hand. He remained silent and handed it to the Client who looked at it and shrugged before handing it to his Sister. It was a fax FROM the Arch responding to scheduling a meeting ASAP to approve the mock-up and submit a finish color selection. It was the week before the Project termination and I had not been copied. The CM later told me that was his Insurance Policy. It was a Kodak Moment. "Let's go to the Storage space." Back to the Black Car and bit of awkward conversation.
At the SS I proceeded to show them the remaining items on the shelves and floor (tubs). Each had a tag - showing trade, item, spec #, date recieved and phase to be used in - taped to it which was cross referrenced to a clipboard on the door. Back to the Black car and the Apartment. Now the Client is talking with the Arch to find out if he spec's these materials regularly and if on a current or future job he could "absorb" anything in the SS. Humahumahuma.....
Back at the Dinning Room table we started to talk turkey.
"So, Frankie, what are you asking for?" I said $75K since $50K is what I would have been owed 1 week (2 weeks prior to site work) after I got The Call... The Sister started to speak when she was interupted by the Client who asked where the additional $25K came from, especially since more work would have been done during that time. Maybe the number should be lower. I reminded him that at the end of the first week on site I would have been due $75K more and that we had actually split up the second 25% ($125K) payment into $50K +$75K payments as a way to take smaller steps and offer a check and balance proceedure for the Project. In actuality, I have continued to work on the Project since I have spent time and money returning many of the purchases, cancelling orders and confirming the cancellations and refunds. I have continued to look out for his interests in these matters. Had I not done any of this, he would have been looking at a $125K bill. (Gulp!).........
"Well then, how about I pay you $25K and you can have watever you sell from the materials in the storage space during this year?"
"I still have to pay the CM and he won't accept tiles or tubs."
"What happens to the cabinets if ( ?! ) I pay you?"
"They're yours to do with as you please."
"How about if I get you to another project?"...
45 Minutes Later:
"Okay, I'll give you half, $37.5K today and when you deliver everything in storage and the cabinets up to the Apartment I'll pay you the balance." (HAR, HAR, HAR!)
"I'll accept the $37.5K today and will deliver everything. But you must pay me the balance before the truck leaves the shop."
"What about the Release of Lein?" He looks at his Sister.
Moment of clear and brilliant thinking - like everything goes into slow motion:
I get the feeling he is going to try to sell the Apartment with the materials. To do this, the most important item I have is the Release of Lein from each sub AND Me. Hmmm.
"I'll get those to you within the week of the delivery - as soon as the check clears."
"Oh, come on Frankie! You have them right in your bag. Give them to me when I give you the check."
"I promised each Sub that I would either pay them what I owe them on Monday or they would get the Release returned."
"You owe all of them money?"
"No, not all. I just thought it would be cleaner to submit them all at once."
"Can I have the ones you are up to date with?"
"Sure." (Not sure if this was a wise move. Just thought that since the Plumber, Demo Guy, Electrician and I are square they have no claim to be made anyway. What's the harm? And he feels like he "got " something.)
I'll deposit the first $37.5K check Monday!
Got a call from the Arch late this afternoon. Made me a little nervous as though he was trying to get the "other team's" assessment of the game. But guess what I found out. The Sister is a law student at NYU! Who'da guessed?!
Thank you all for your interest and comments. And after so long to still be curious. It calmed me down and allowed me to vent and step back for a while. Ya know? I really like this site. Thanks again. Sorry for the novella.
WTG^5!
But, but, its SUPPOSED to taste like that!
well done - a lot of effort having all those ducks in a row - it's too bad that energy couldn't have been directed toward construction instead of the interpersonal tug of war - - hope the check clears and no surprises occur - thank you for the narrative - DOUD
Frankie, congrats Im sure you know this but if your concerned when you go and deposit the check the customers bank can tell you if the check will clear.
The only thing that concerns me is he is having the cabs and other material delivered to the apartment at which point he will give you the second check. Is that correct?
If it is, it sounds a little fishy to me, have you thought he may be planning on stopping payment on the check leaving him with the cabs and materials for a total of 37.5k and you out of luck with another headache and possible law suit.? It may be to late to change the terms of the agreement but have you considered asking for a cashiers check from the bank or a money order(not sure if they can do a money order for that amount) to be given to you once the material is delivered. Might save you a future headache and you can finally wash your hands of the whole mess.
Last thought was some sort of contract signed today as to the terms of the agreement you made?
Congrats again on the victory today and I wish you luck in closing this whole situation.
Best wishes Neil
You're right, I could (should) have asked for the final check to be a cashier's check - my pals already brought this up over beers last night. Bummed me out a bit. However, the Client was meeting my terms and I will deposit the check in the bank before the delivery truck is even loaded. At that time, I will confirm that the funds are available.
[FYI - For someone to put a stop payment on a check, they have to put up an equal amount of cash in an escrow account. I don't know if that's in addition to the check amount or just to confirm that the funds are in account as proof it's not a kited check.]
The ball is still in my court though, because a) It seems as though he wants to sell the Apt. (I'm sure it will be tied up in Estate probate (legal sh-t) for 6 mos if the deceased was a part owner) and he can't do this if it has a lein on it (one year period then renewed), and b) Since it is a co-op, it is the Bldg Corp. that gets the lein. This means NO APT. in the bldg can be sold until it is cleared. Co-op Boards traditionally frown on that. Gotta lovit!
BTW -
NYU stands for New York University which has an excellent Law School. Maybe she is a first year student.
I saw her as the Client's support system and thought that asking her to leave or keep quiet would only make the him more defensive.
I never thought either Clients were bad or even unreasonable people. Adversity though does bring out peoples worst, well sometimes best, features and wanted to be prepared for as much as I could.
At the risk of being redundant - Most Clients believe that our work begins and ends at their front door. They rarely get to see what transpires behind the scenes. When they do, most of the time I have found they are impressed. Both with the breadth of our knowledge/ trade and the relationships we have with other trades/ co.s. It sometimes boils down to educating them. AHA! There's a new thread. I'm going to stick this one in the Business folder under How To Shows.
Thanks again for all your comments and Kudo's.
Frankie
>However, the Client was meeting my terms and I will deposit the check in the bank before the delivery truck is even loaded.
Caution is in order. Maybe check with the bank on how to best protect yourself. I had a client check returned more than a month after I deposited it. Bank wouldn't or couldn't tell me why. Thankfully I hadn't written any checks against it. After waiting in vain two more weeks for the return of it to me, I gave up and contacted the client. That was good and awkward. Turns out she knew nothing of it, and it was garbage between the banks. I had endorsed it as FDO (for deposit only) as advised by my bank, be/c it was a corp acct and signing my name didn't seem appropriate. But the client's Texas bank had instituted new rules post-Enron, and wasn't allowing FDO without the corp name (how do you "sign" a corp name?) even though it was valid banking rules.
We worked it out except for me losing access to the funds for about 2 months. The point--and I really do have one--is to be aware that there are things that can happen even a month after deposit that can screw up a payment. If you think they might play games with the payment, see if your bank has any other ways to help protect you.
Thanks for the info. I will confirm your comments Mon am and report back. I used to write "For Deposit Only" as a precaution so that if the check was "lost" it could not be deposited into anyone else's account. I need to start doing that again.
Thanks again,
F
Cloud, you asked " how do you sign a corporate name"?
there must be more to this question than you have written.Because the obvious answer is so simple I have to believe you already know it.
when you "inc. "your business or in my case set it up as an LLC you open up an account in the name of the new entity. The bank issues you a stamp that you use to endorse incoming checks----for example,mine reads something like---
Pay to the order of XYZ Bank,Akron Ohio,44301. For Deposit only Hazlett Roofing & Renovation LTD 1111112222233333444445
the long string of numbers on the end represents your actual Bank account number. the important thing is( as explained by the legal eagle who set up my llc)-----the customer is dealing with a legal entity---the inc. or the llc. So even if the customer gives me a check made out to me personally it must be endorsed into the llc account or the customer MAY have successfully "pierced" the corporate veil.
It was more of a cute comment that I have a signature, but the corp doesn't have one, be/c the corp doesn't have handwriting.
On the technical side, the check was in the corp name and the account into which it was being deposited was in the identical corp name. My bank manager, looking at this check, and having personally set up this account, said, "endorse it 'FDO'," because I specifically asked him ahead of time. The other bank was just being persnikity, supposedly in leiu of Enron. Personal check into corp acct or corp check into personal account--their position would be completely understandable. But corp check into corp acct? Naaaaah. "FDO" is completely within standard banking practice.
edit: I've "inc'ed" multiple times, and the banks never issued me a stamp. I LOVE stamps and now feel neglected. :( OK, I'm over it. :)
Edited 1/14/2003 8:15:44 AM ET by Cloud Hidden
Cloud, They aren't free, you pay. Unless maybe you're a hell of a lot bigger biz than I? Banks spend so much money advertising how nice and friendly they all are, there's no money left for the used to be free stuff.
Joe H
I am on the edge of my seat, Frankie. What is the final outcome? Who will play the parts in the movie?
Frankie,
Just read your writeup about the meeting with clients, arch, sister and CM! Damn, I bet your attorney likes working with you!
Don
You Bet!
Was taken to court once - sued for $85K.
Counter sued (at att's direction) for $12K and won!
Attorney kept all the $$ to cover costs, one full day in court - and I spoon fed him the case! I didn't even get a Christmas Card! GGRRRR. What a racket.
Frankie,
As to educating clients as to what a contractor does I read a book a few years ago titled The Unofficial Guide to hiring contractors It was pretty good, to bad more people don't read something similar when they are considering bigger projects.
Never seen it. I'll do a search. Thanx.
Frankie
http://www.amazon.com/exec/obidos/ASIN/0028624602/qid%3D1042403047/sr%3D11-1/ref%3Dsr%5F11%5F1/104-5205224-3651130
Frankie,
Thanks for sharing this tale with us. It's been enlightening. Perhaps to be remembered as one of the best of the year for 2003. Fine example of businesslike attitude coupled with compassion with a strong dose of tenacity on the side..
Excellence is its own reward!
Aw shucks.
F
Frankie,
Sure glad it is working out for you, ....regarding the sister...just what the world needs huh? Another lawyer. Sheesh. Anyhow thanks for sharing, a lot of us learned a lot and maybe saved ourselves some trouble.
mark
eeeka neeeka..... the things we do to make a living... good for youMike Smith Rhode Island : Design / Build / Repair / Restore
Glad to hear things turned out reasonably well.
I am curious about one thing, though - What's the significance of the fact that the Sister went to NYU? (And what does NYU stand for?)
If I had been in that situation, I would have asked that the Sister NOT be in on the discussion, since she had no direct involvement. (If I had thought about it, anyway)Q: Why is it difficult to find men who are sensitive, caring and good-looking?A: They already have boyfriends.
Glad all went well, great prep work! Thanks for the follow up. Interesting story. DanT