Would you cut corners here?

[Ashton Astillero]

This is going to be a wall of text, but I think it's necessary to lay down proper context.

Not so recently, I took a job for the rehab of a house. I had to wait a little bit since I don't want to put anybody in the hot seat. For context, I've only put together an LLC to work as a contractor full time Less than 3 years ago. You could say I'm rather new to most things though I've paid my way through college as a subcontractor in a rehab crew or make ready's if you would.

In this particular project, the scope of work included upgrading the 16 space panel to a 24 space one. First thing that I got concerned with is that the investor rehabbing doesn't want to upgrade the panel. My electrician is adamant that the 16 space panel won't be able to accommodate the circuits if we were to wire the house properly. I went ahead and took some off of the profit that I was going to make and paid my electrician to do the upgrade. Since I'm trying to foster a relationship with this investor, I was willing to eat up that cost. 

As my electrician did the upgrade, we encountered Romex wires spliced with electric tape behind the walls and hidden in soffits. There were also wires that went through the return air vent. There were 2 receptacles hidden inside a bathroom wall, and one of the bedrooms had a receptacle on the CEILING right at the corner where the wall meets the ceiling. Think about that for a minute. 

Having seen it, I wanted to do a change work order to get them addressed. The investor and his project manager did not want to address it. I was instructed to leave things how they are and that if it worked before for the previous homeowner, it should be fine. 

The electrician and I decided that we can't leave those behind and went ahead to address everything that needs to be done. We ended up rewiring practically the entire house and adding two ground wires. The house is a 4/2 fully furnished basement 2500 sq ft. My electrician wasn't happy, but we do things how we're supposed to do it. I ended up earning less that $2k to GC a 5 week project not including the time to put the contracts and sub contractors together. And all that electrical work for under $3k(?!) including the materials. 

Question is a.) would you just leave the problems unaddressed? b.) how would you have handled the situation? 

[Aaron McGinnis]

@Ashton Astillero  - This is a very tough situation for a young contractor, especially if you're not licensed.

Basically, you had a house that needed (and it sounds like, got) a rewire... and the investor didn't pay for it.

Let me give you a hard truth: He doesn't care that you came out of pocket, and you have done nothing but indicate your willingness to pay to come to work. You have no ingratiated yourself to him, and your actions on this job say nothing about whether or not he'll hire you for the next job. All that has happened here is that you've paid to go to work... in essence, you have taken money from your pocket and put it in the investor's pocket and gained no relationship points in the transaction.

You should have let the inspection fail, then told the investor "This has to happen or the project doesn't move forward and you will get a stop work order if you try and move past it because I'll call the inspector myself" ... the investor would not have been happy. He would have kicked and screamed and shouted that life was unfair and that construction is too expensive and that reality is a harsh mistress. Then, he would have paid up and you all would have moved on with your life.

You need to remember this: The law is on your side. Do not be afraid to weaponize it against an investor who wants you to do illegal work, or who is trying to get you to pay their profits.

I ASSURE you - if the shoe was on the other foot, the investor would not hesitate to throw you under the bus in the worst possible way. House burns down due to bad wiring that the investor insisted on? ... "sue the contractor, I had no idea and am not a licensed professional."

Consider this a learning experience and do the following - 

1) Get licensed if you aren't already. Pull a permit on every job, no matter how small.
2) Clean up your contract and write work scopes so tight they squeak.
3) Repeat the following on EVERY job... "This is not my house. My obligation is to give this person that which is legal and that which they pay for. If they want to not pay or want me to perform that which is not legal, I will use the law as my shield and either force them to behave well, or I will leave the transaction cleanly and let the liability rest with the next person."
4) Every relationship between investor and contractor is one of contrary goals. Every dollar spent by the investor is a dollar earned by the contractor, and a potential dollar of profit lost.
5) The average investor will GLADLY and HAPPILY work you into bankruptcy and lose zero minutes of sleep over it if that means they see another thousand dollars of profit.