Can i sue a home builder(i was the investor) for Heavy delays 2+

5 Replies

I invested in a new construction house w/ builder(friend of mine) who would build the house(1 year timeframe) since i was new, we never wrote any terms in the contract that the builder would finish(and me being a newbie i assumed he would complete). The builder took just under 3 years to build which scratched all my profits and i actually ended up losing money(10k).

We had a buyer and when the buyer released some of the money as a down-payment, the builder used that money for his personal use rather than finishing the house. He said he would have money coming in shortly but never came and our houses got dragged while he was investing in other projects.

Reason for his delays:
1. He took to many other jobs 
2. He may have used our funds and might have invested in other properties that he was building with other lendor/investos

Do i have a base to sue him?

@Harry Lopes You may have a case but it all depends on your contract wording. But will you spend more than the 10k to get any money? 

Three years??? Yeah, thats way too long. One year is too long for 99% of most houses. Did he have access to the funds when needed? Were there bank draws? If so the bank should have done something to speed him up. Houses shouldnt take over 6 months mostly. You really need to add a performance clause to your contracts. Never pay ahead to anyone. Not even yourself.  

Originally posted by @Harry Lopes :

I invested in a new construction house w/ builder(friend of mine) who would build the house(1 year timeframe) since i was new, we never wrote any terms in the contract that the builder would finish(and me being a newbie i assumed he would complete). The builder took just under 3 years to build which scratched all my profits and i actually ended up losing money(10k).

We had a buyer and when the buyer released some of the money as a down-payment, the builder used that money for his personal use rather than finishing the house. He said he would have money coming in shortly but never came and our houses got dragged while he was investing in other projects.

Reason for his delays:
1. He took to many other jobs 
2. He may have used our funds and might have invested in other properties that he was building with other lendor/investos

Do i have a base to sue him?

I just re-read that. Looks like you were the money man and he was the labor? Is this accurate? If so you may have to take your losses as they are. 

Hi Mike, can't I sue on the basis of him using the construction money/buyers down ayment to pay his personal expenses(150k) and time lost. Yes - he did have access to the joint business account.

how much of the partnership did 10k get you?

Who secured the loan?

That seems like so little compared to the cost of buying a lot and the building of a house 

@Michael - here is the breakdown: 

1. We took a mortgage - 350k ( i put majority of the down payment 20%)

2. Construction - I funded 80% and builder funded 20%

I had funded the builder enough to finish the house - but there were delays, im assuming the builder used the money somewhere else - perhaps to fund his other invesmtment properties. Plus the downpayment from buyer - he used the entire money 150k to fund his personal expense(we couldve used that money to finish the house), which is another reason he delayed the house by another 6+months.