This morning the contractor I’ve been working with threw in the towel with three projects at 95% completion (the mark for the last significant draw) and simply wrote a “good luck to ya” to the home owners and said a “you’ll get paid” to the carps and subs as we watched his taillights drive into the sunset.
Unfortunately, the home owners will surely end up paying twice for some of the subs. The subs are in a tough spot since they have so much time & material invested. A new local ordinance requires subs and GCs to register with the city by the first of this year or lose the ability to file a construction lien. A small fraction of subs have registered so it will be interesting to see who is simply sol.
On the bright side, the carps will finish the projects working directly for the homeowners, the subs who registered will eventually be paid one way or the other, the lawyers will get to make an extra payment or two on their resort condos, and the young carpenters have learned a few important lessons on what can go wrong and how the crew can come together to help make things right.
12 hours ago seems like a very long time, but we did get a lot accomplished and sorted out so it was a pretty good day. Strange, but a good day. *grin*
Cheers,
Don
PS Thanks for letting me vent.
Edited 1/4/2006 12:27 am ET by IdahoDon
Replies
No one chased those taillights? Or has he been reported missing, with his car found "abandoned" on a lonely stretch of Idaho highway?
If you caught the turnip, you still couldn't squeeze any blood out of it.
I guess he read the thread about the 233% profits to be made in NM... or was it AZ? and had to head down there!!!
Seriously though, I guess he had to make the decision to cut his losses and run. This doesn't necessarily make him a bad builder, just an unsuccessful business man - either that or just a victim of local economy, etc.
Personally, I'd be a bit leery of working for the home-owners. They are probably going to loose money on the deal and will want to "take it out" on someone. I would guess that anyone who worked for the now defunct GC could be looked at as "one of the SOB's guys..."
Hope you get paid for what you have done thus far.
Edited 1/4/2006 7:32 am ET by Matt
This doesn't necessarily make him a bad builder, just an unsuccessful business man
Um, this is where I would have to disagree. His 'ethics' are completely wrong. He screwed his clients (homeowners) and his vendors (subcontractors, material suppliers, etc.). His entire philosophy is worthless, IMO. Not only would I have chased him down, but I'd probably have used a framing nailer to fix him to the wall on one of the client's homes and then called the client.
Ok, maybe he was unsuccessful. We already know that when he walked off the job. But now we get to identify his failure, or lack of success, in his ethical values--which also walked off the job. Did this person go to the clients and vendors? No, he left notes and skipped away. Had he been working for me, I'd have busted his kneecaps without a good excuse.
I don't see this situation as much different than, say a restaurant that goes out of business or a store that goes bankrupt. I wonder how many businesses go under with no body owed anything? :-) Like someone said above - no blood from a turnip.
Don't get me wrong - I have never owned a failed business nor have I every filed for personal bankruptcy, which BTW I think is total BS - but I have owned stock in one of the big companies who ended bankrupt and it's executive officers in court (and jail) for misleading stockholders so I have been on the receiving end of some bad business.
If the builder's business was incorporated or similar, then the creditors can divide up the assets - even if they only consist of a trunk full of used power tools. If not, he is probably 3 states away by now...
BTW - in my state the GC is always held responsible. Let's say a 5 year old foundation develops a huge crack - it's the GC's responsibility - not the foundation contractor.
As far as ethical values - yea, well I have pretty strong ethical values and have had to finish jobs that I was in the red on. People who work for paychecks only have no idea how this feels. On the other hand, if I were, say 100k or 200k in the red on a job - well yea, I just might just walk. The thing is we don't really know if the guy was out buying coke for him and his 5 coke hoes with the clients progress payments, or if he simply underbid the jobs and had so many unforeseen extra expenses that he just plain screwed up and couldn't complete the jobs with the funds available. If it were the latter, what did the customers get cheated out of - not getting a $200K house for 175k? We can't assume either scenario but my guess is that he ran out of money due to bad business practices and yea, maybe he bought a new pickup truck when he should not have. Would it be preferable if he did complete the loosing business ventures, stringing his subs and employees along more and more but in the end just didn't pay his subs - etc? It might just kinda come down to - do you want to get screwed now? or really screwed later?
Let's say that maybe the houses were 95% complete and 95% of the bills were paid leaving a $10k deficit per house - should he be hanged, or just neutered?
What would you have the guy do - just continue conducting business as usual and pay subs and employees with rubber checks or IOUs? When is the time to throw in the towel?
I'd like to hear the whole story. Just maybe the Contractor was good enough to hang around and get the project into the finish stage.
Sounds like some one had enough of some one.
Time for a "To whom it may concern" ad in the local and regional newspapers. Spell out what the guy did and do it accurately, with no embellishments so nobody gets sued for libel/slander. If there's truth in it, they can't get very far.
That is kinda weird. I've heard of GC's quitting in the middle or a job or 2/3 of the way, but at 95%? Sounds to me like the guy had a misdirection of cash flow and doesn't want to have to explain his errors of judgement to anyone and would rather .... well, that doesn't make any sense either.Actually, no one can figure out why a stupid person or a crazy person does what they do because someone with all their marbles would be able to find a reasonable resolution.Where is he now? Has someone followed up on him? Has anyone filed suit? Some serious diplomacy and a new contract with payment up front would be in order for the screwed customers I'd think before I'd venture in.But then I guess they could try to get you to take responsibility for the GC's behavior and finish on his contract. I'd refuse.
I'm just amazed how GC's around my neck of the woods are not held accountable to the county/state. Sure, the subs are, but the last time I checked the GCs were not. It only encourages wannabe's and those more willing to inethically bounce a client and start another company (all for the low price of $69 for the business license).
What is most unfortunate is that also in my neck of the woods the client, or homeowner, will ultimately pay for costs already generated when subs start placing liens on the property. Try converting that construction loan to a traditional mortgage under those conditions.
Actually, no one can figure out why a stupid person or a crazy person does what they do because someone with all their marbles would be able to find a reasonable resolution.
Exactly right.
My involvement is as a "contract" lead carpenter, essentially a sub finish carp overseeing the process, but without fiscal or sub scheduling responsibilities, if that makes any sense. Usually I'm just the guy who is always saying, "You can't do that. We're not competing with highschool kids building Habitat houses. At least close your good eye if you aren't going to wear safety glasses so I won't feel bad bouncing a nail off ya.", or simply being anal about how the other finish carps or subs are functioning. We're building nice places, or, er, uh, were building nice places.
Another long, but productive day. Now I've become the go-to guy for much of the remaining work. Everyone is in crunch mode so I spent part of the day working with the electrician, met with the electrical inspector, scheduled a meeting with a new window installer, installed some new cabinet hinges, started tiling two bathroom floors and the kitchen backspash, installed a temp toilet in the third bathroom, added a pvc elbow to the furnace/ac secondary drain outlet, reattached a few temp access hatches in the floor, met with the painters to iron out a new schedule for painting a few cabinets that I need to build next week, cleaned and tested the gas insert flamemaker, met with the interior designer who scheduled the carpet install for next week, and kept a big smile so the owner wouldn't worry too much about the next few weeks. Essentially all the things that I didn't neccessarily enjoy as a GC with a little carpentery thrown in as a tease.
Want to lose money? Work for a broke GC who functions as a corporation with zero assets. He leases his truck from a separate corporation, who he also owns, and simply rents the big construction stuff and hires carpenters already tooled up. As far as I know the actual construction company only owns one tin trash can, two red brooms, and some empty 5-gal buckets. He's always been a turnip. :-)
I learned today that there is a fourth job that was also walked away from a few months ago, with much less than 3% left to finish. I left that job after building a nice oak balistrade and assumed other subs would finish some glass, iron railings, carpet, and a custom cabinet install. The last 5% is apparently closely related with actually paying most subs, which is something he didn't plan for very well.
I do know he's moving back east so locals will have a much harder time getting anything out of him, but there are a lot of lawyers already involved, including two of the four clients.
Near as I can tell after talk with a number of people and putting it all together is that the original project 1 went way over budget and he was left in the red so he walked assuming the project 2 would be profitable enough to pay off the subs from job 1.
During project 2 an out of town fellow hired him to add a second story to a house for quite a bit of cash, so we spent some time there on project 3 as a filler for part of the crew during slow times such as when the sheetrock was going into project 2.
Then we were doing so well on project 2 that a laywer down the street asked us to work for him on project 4.
Project 4 was run a little shady quality wise from day one and I wasn't allowed to work there except to fix a few problems. Project 4 was likely seen as a final way to turn a quick buck and save the whole mess, which it wasn't because the carps there finally refused to do crappy work, or so I've heard.
With tax time right around the corner he probably paid off the corporations that he leased equipment and who knows what else (paid himself) and will divy up the rest of his bank account before leaving town with a few grand that most lawyers wouldn't find worth the time to chase across state lines.
....
Honestly, as I'm writing this he just stopped by with a check so I'll be the first guy in line at his bank in the morning. :-)
....
As for working directly for the homeowner, it's not a concern at all as they have been apprecative of our efforts all along and now we're seen as saving them from a real mess. Two weeks from now they are moving in, and hiring another contractor on such short notice would be a nightmare.
Having said that, for this project I'll now get paid at the end of each week and get advances for significant material purchases so there is little risk on my part. I usually have a few jobs lined up so most people I work for understand that if a check isn't written when due, or if there isn't enough work for a 40 hour week, I'll pack up that day and move to the next project.
The owner is also handling the financial side of dealing with the subs and is essentially acting as the GC with me to take care of the carpentry side of things. The decorator has very generously stepped in to help with ordering and delivering hardware, tile and other materials that only her and the original GC knew about in detail. Without her my job would be twice as hard.
Just two 70 hour weeks and it's home free. :-)
Shopvac bearings bit the dirt so it's off to the orange box.
Cheers,
Don
I'll say this, for somebody that's walking off a job, he's not running. You said he just brought a check. He seems to care, at least a little bit. He's scheduled most of the trades. I don't admire the man, and would not want to work for him but I've seen a lot worse. Sounds more like a jerk than a venomous snake.
Don K.
EJG Homes Renovations - New Construction - Rentals
Sounds like there is a LOT more to the story.
Many times, when there is so little work to be done, HO's try to get double value before paying the final 5%. If the GC walks, they get to keep the $ and figure they could live with or finish the job themselves. It is a typical ploy and one more bite at the apple/ wishlist.
Maybe the HO's were double teaming the GC. When this happens on 3 jobs at one time, throwing in the towel and becoming a bartender or going fishing sounds like a reasonable short term solution.
Maybe he is moving to Peru.
You are a Sub or an employee and may not know the business dealings, obligations or restrictions with which he is involved. Wait, watch and listen. There may be something to learn here.
Frankie
There he goes—one of God's own prototypes—a high powered mutant of some kind never even considered for mass production. Too weird to live and too rare to die.
—Hunter S. Thompson
from Fear And Loathing In Las Vegas
Interesting perspective. My original assumption was that he was 95% done but had badly underbid and still owes his subs and vendors way more than the last 5% will cover. What you're saying could be equally true, that's he's 95% done, 95% paid, 95% paid off on his A/P, and realizes the last 5% will be unbearable.
Who knows... anyway, IdahoDon, what's your involvement in this?
Just like what your are saying, a homeowner did that to us last spring. Once we were done with all the difficult work (framing, fine carpentry)and there was nothing but closing everything up with sheetrock, he had us do some extra ( promising payment of course ) he balked on the down payment for hte change. I made the choice to move ahead on that, feeling there might be some risk involved at 50/50% risk; he had paid on two contracts we had done for him in teh past. But when he called me after that was done and it was time to payup for hte sheetrock phase, the stories, excuses, delays and then finally differing versions of events came all at once.We took our tools, pulled up our sign and left. It wasn't worth the hassle knowing he was gearing up rationalizations to not pay us, so I decided to leave.THat might have happened in this instance. But three at once?Sounds kinda strange.
I've seen guys do this before. Three at once is what clues me in that he had this planned to screw people.A guy one time had a cabinet/woodworking shop. He had deposits from people all over the place, he disappeared and his wife spread the story that he'd had a stroke and died while they weree onm vacation back east over the holidays. She had an auction of tools etc. and flew too.
A few months later, someone chased it far enough to discover them living in another state. He got a free trip back- in cuffs.
Welcome to the Taunton University of Knowledge FHB Campus at Breaktime. where ... Excellence is its own reward! guys do this before. Three at one time is what clues me in that
Not to discount your story - or the others here - but usually when this type of thing happens in 3's or 4's it is due to a systemic problem rather than a premeditatedscrewing.Maybe he interpretted his relationship with his Clients as a friendship rather than a business relationship. They stayed in business mode while he went into friends mode, and so started do do "favors" which bit hime in the #### - not by not being compensated, but by setting the precident that he will do things for free. This interferes with managing Client expectations and ... well you see where this can go.I will say that we all make our own bed, and if we don't others will make them for us. Life has tough lessons at any age. Even more if you have your own business. If you don't learn them at 30, you'll be retaking the course at 40. If you do learn it at 30, there is another course to take at 40. Maybe he is taking a remedial course.Just offering other scenerios of what else might have happened. There is much too much bad mouthing of Contractors and the knee-jerk reaction to say that he was screwing someone or had premeditated theft or worse was a rush to judgement and only served to confirm a stereotype. We deserve better.NONE of us know why, what or how in this situation. WE ALL need more info. Keep an open mind boys and girls.FrankieThere he goes—one of God's own prototypes—a high powered mutant of some kind never even considered for mass production. Too weird to live and too rare to die.—Hunter S. Thompson
from Fear And Loathing In Las Vegas
WEll said. Thanks
Welcome to the Taunton University of Knowledge FHB Campus at Breaktime. where ... Excellence is its own reward!
I'm prone to agree with girlbuilder, three jobs at once sounds strange, but I have seen two jobs go south together.
When I was practicing law, one of my clients was a small builder with bigger dreams than brains. He took on one of the locals out in the Hamptons, and she had the upper hand. She had more time and more money, so we wound up in arbitration a year later. In the meantime, she tells her girlfriend who he is also working for, that he sucks. She finds out he has no local license and refuses to pay him the due payment (35K if I recall).
He went back and mouthed off to #1, "I know where your kids are!", then I got to representhim in the criminal case too. We eventually won against the first bittch in arb., but he never recovered.
Don K.
EJG Homes Renovations - New Construction - Rentals
Don, Know any lawyers who specialize in contractor arbitration (assuming that is a specialization). Might know someone who needs one out in the Hamptons.
Doesn't everyone in the Hamptons need one?
Welcome to the Taunton University of Knowledge FHB Campus at Breaktime. where ... Excellence is its own reward!
The Hamptons is probably one of the nicest corners of America. Hence the density of wealth, craftmanship in building and extremely successful contractors.
I know a couple guys/firms. I think it might be worthwhile to hear the full story myself if that's possible.
Shoot me an e-mail through the board, I'll see if I can help.
Don K.
EJG Homes Renovations - New Construction - Rentals
Actually it was more of a general reference since the question has come up from time to time re: finding a lawyer in that field. As you know the dollars and expectations can run very high out there, so it would make sense to prepare oneself for a potential conflict.
Okay, construction litigation is a "specialty". Under the Code of Ethics in NY, we can't really specialize, but there are some people that do it regularly. That means they usually have more familiarity with the technical end of things - like the difference between a header and a leg, or the code requirements, etc. They are usually more familiar with the current caselaw from the courts which might be important in a given situation, and they should know or have reasonable access to the experts who might be necessary in a given case. In one case that might be an architect, or a structural engineer, or a mason, whatever. The issue can be very case specific.
I've gone up against other lawyers that had no clue about anything having to do with building, and I've been against some that do it every day. It can make a world of difference in how a case is handled or settled.
Can I give you a name now for something that might happen somewhere down the road? No. I don't know which firms will still be in business a year or two from now. I don't know who might be working if the firms are still there, and if they are working, whether they will be worth talking to. I can say that if it's necessary, there are firms and individuals out there who can do the job.
Don K.
EJG Homes Renovations - New Construction - Rentals
Appreciate the info Don. BTW where on the Island are you?
And if you do move down to Virginia permanently please don't take the moniker VA Don, it's getting hard to keep track of all the VA guys.<g>
TGNY - Sorry I missed the follow up last night. Had to move furniture, getting ready to demo the last big plaster ceiling down here in the next day or two.
I'm in the Islip area. South shore, Suffolk County. I've practiced everywhere from upstate and the Bronx (lots in Manhatten) to Southampton and for the last few years have tried to stay in Suffolk county.
Don K.
EJG Homes Renovations - New Construction - Rentals
Do you have a state licensing board in Idaho? The first step should be a call to them.
same thing happened to a company I used to sub for.
I was one of the smart ones and saw the writting on the wall ... didn't let them get behind on payments.
Their folding actually turned out OK for my best bud that was their head lead carp.
He worked out a deal with the HO on the whole house remodel he was leading ... the guy re-ran the numbers and saw what a deal he could get by paying my buddy weekly. He decided to go all out and fit it all in while the labor rates we're about half what he was paying thru the company.
Kept my buddy busy for an additional 8 months. Forced him to finally see I was right and he should be self employeed instead of employee.
Only bad part was finding out no deposits had been made into his 401K account for the last 6 months! Also found out his health ins benefits hadn't been paid up either ... luckily ... he didn't find out the hard way by needing it.
Taking over the jobs in progress might just work out for all in the end.
Good luck which ever way it works out.
Jeff
Buck Construction
Artistry In Carpentry
Pittsburgh Pa
Don:
How about filling some of the details as they unfold...
Remember somebody telling me years ago,
"Finishing the first 90% is the EZ part, Its the last 10% thats the hardest!"
"Finishing the first 90% is the EZ part, Its the last 10% thats the hardest!"In my experience the first 90% of a project takes about 90% of the time. It's the last 10% that takes the other 90% of the time ;-)
I was talking to our mechanical inspector yesterday and he told me he had 3 homes in various stages that the GC bolted on. He said he hadn't encountered that before (so close and so many at the same time)
sux.
DIY I say
-----------------------------------------------------------------------------
WWPD
GC said he would cough up the details today of what was ordered and from whom. So far a no show.
I'm the only one with a check so far, but it was a glimmer of hope for the others.
Along other lines the GC claims to want to have a sit down heart-to-heart with the clients and explain in detail what happened, but not for another week. I'll give it a 50/50 chance of being his mouth flapping over true good intentions.
One thing's for sure, just dropping out like he did without providing the information we need for "emergency mode" operations has been a pain. We've had to re-spec out quite a few things and are in the process of finding venders just in case the original special orders never happened. Had he at least given us that information it would have saved nearly $500 in labor costs.
Moved to 11 hour days instead of 10. Hopefully 12s aren't next. :-)
Cheers,
Don
I was talking to our mechanical inspector yesterday and he told me he had 3 homes in various stages that the GC bolted on. He said he hadn't encountered that before (so close and so many at the same time)
Must be the end of year blues, aka the Jan. 15th tax deadline. :-)