Grounds for firing GC? Need some feedback!

20 Replies

Hello BP community. 

I'm on the verge of firing my GC and need some feedback. I don't want to make sure I am being fair and not overreacting.

Background story. Bought a 5-plex we knew needed some work, floors had 5-6" deflection in some areas. Had a engineer look before we bought, said it was pretty straight forward to address. Before commencing work I had an engineer come in for plans and walk through with the contractor. This engineer said we may be better tearing down. My GC then brought his own engineer, whom we hired.  6 weeks later, the work is complete, however didn't pass inspection and we still have 4-5" deflection in most areas and zero lift on one of the floors. We weren't satisfied with the final outcome, GC said its as good as its going to get, so I brought in another engineer for a second opinion. This opened up a whole other can of worms that we now need to address, $20-25k worth. Then we met with the engineer who drew up the plans and he confirmed yes it can be lifted and leveled out more, but he told the GC from the get go that he felt the building was condemnable and didn't want to do the work because it would be a mess and here we are, its a mess. The engineer's words exactly were: "(GC) swayed me into doing this in phases." That was the last straw for me. I feel he was negligent in sharing this information with us, as we would have approached this completely different, especially hearing this from 2 engineers. But of course the GC wanted to secure a job and hefty deposit.

Before we even found this information out, we've deal with the following:

Unauthorized, unapproved work he's now over billing for

He said he was not marking anything up so he invoiced for additional time, material, mileage and fuel - about $2,000 worth. I found out from subs he's marking up 40-80%

He's now trying to bill for his time on top of this because he says there was no mark up, but I got the prices directly from the subs

Sub called to tell me he was going to put a lien on the property because he was not paid by GC, after we paid him 6 weeks ago

They poured cement footers (3ft deep) directly over a baseboard heater water copper pipe, basement is now flooding so we need to see if the cement broke the pipe

His crew broke plumbing pipe and GC would take zero responsibility for it. I had to fix or end up with a flooded basement

GC yanked out a bunch of wiring and took out the upstairs tenant's heat on a Friday evening so we had to work all weekend to fix it - he refuses to take an responsibility

GC has spend some time tracing the wiring to give us an estimate ($17k to rewire) and now that he knows we're not moving forward with him, he wants to bill for the time he took to put the estimate together

GC has been extremely disrespectful to me, yelling at me, calling me a liar, etc. 

No one was onsite when he building inspector showed up so I came back to a tag on the door and flooding basement (same day they broke the pipe).

He made it clear in an email that he was not the GC, only the contractor for the structural work he was hired for, and would be invoicing for his time.

Inspection didn't pass

We didn't sign anything, however as per his own estimate, we needed to pay up to 80% until work passed inspection, which we have done as per his schedule. All work has stopped due to all of the issues that have come to light. He wants to get in there and finish so he can collect another $10,000 - $4600 of is unauthorized / unapproved work. 

After all the issues and deception on his part, I do not trust him to step foot back on my property. Both my partner and I want to fire him. I believe we have grounds for firing based on negligence alone. As per his own estimate, we would not be obligated to pay him another dime as his work did not pass inspection, in which case the permit would be void and we'd need to start over with another contractor. I have been interviewing contractors. 

Do I have reasonable grounds for firing? 

Do I pay him any more, even if he doesn't come back to finish? 

Any feedback is greatly appreciated!

Yes, fire him.  Yesterday.

And right after you do, think about all the things you did wrong leading up to this.  And accept the fact that everything that went wrong was your own fault.

First and foremost, you didn't have a written agreement.  Second, you let the contractor control the relationship.  Third, you didn't fire him when you should have.  Fourth, you clearly didn't screen him well enough.  Fifth, you let the contractor decide a path for the work instead of you creating the SOW.  And I could go on and on...

You made LOTS of mistakes here, and you need to really think about what happened and how you can not let it happen again with future contractors.  Managing contractors is the hardest part of this business, and if you can't do it effectively, you *will* lose money.

Sorry to be so blunt, but this is the difference between future success and failure...

Thanks Scott. Yes you are right and as I said any feedback is appreciated. I greatly appreciate your bluntness. 

One thing I did was vet him. He was in good standing with the planning department and BBB. He had a contract he wanted signed but of course this was completely crap for us and gave him all the rights. 

Do you know where I can find a good resource for covering all the bases on a GC contract?

Thanks!

Now I'm curious as to how much you'll have to pay to not have a lien. And how can the subs come to you for payment when you had no direct relations with them.

it sounds like money is not an issue for you,hire a good lawyer and Sue the crap out of him you do have to show backbone to stop from being ripped off

Originally posted by @Ralph Pena :

Now I'm curious as to how much you'll have to pay to not have a lien. And how can the subs come to you for payment when you had no direct relations with them.

 Whenever using a GC, get lien waivers from all subs before disbursing funds to the GC.

Thanks @J Scott, your the man. I've been reading your books and listening to your podcast interviews. I knew you'd have the answer. Thanks

I'm a gc in Florida not sure about your state but in Most states have really good regulations governing contractors, but you have to follow the letter of the law exactly for example you may have to send him a certified letter and so many days to correct. No contractor wants to risk his license over one job. I suggest you contact your states licensing board and find out exactly how to handle.

@Joey Middlemiss Holy moly, i got to half of the story and i already feel your pain. I don't want to rub everything you did wrong to you, here is something that will help you see a little light, but you really need an attorney, or at least your contractor's board - not sure if they will help much, you dont have a contract. But here are some solutions, these solutions are only used for worst case scenario:

for liens - issue a joint check between your GC AND the sub. in the future clause of a contract, let the GC register his subs/suppliers (http://ownersperspective.org/bim/bim/item/412-joint-checks-and-direct-payments-to-subcontractors-and-suppliers), ask an unconditional waiver during the exchange. To mitigate in the future ask for a conditional waiver together with his invoice before you issue a check, and unconditional waiver together with your transmittal receipt with (guarantee that he paid all subs and suppliers) of the check.

For him not to put a lien, call his contractor's bond company, let them know that the contractor abandoned the project and you would like to file a complaint and want to know their procedures. Each contractor must post a 10-15k contractors bond before getting his license. Don't disclose that you don't have a contract. MAYBE it could get his attention.

Call your local contractors board particularly with consumer, file a complaint.

Pre-made contracts, go to your local office supply store, ask for a "home improvement contract", most use BNI and Craftsman Publishing, some larger companies use AIA contracts. Modified contracts: if GC could dictate his contract terms, you need to write your terms also, take his contract, strike out what you dont like, write what your terms are.

Vetting your contractor via BBB does not work! BBB is a marketing company and subscription based, its not really a government regulated body, vet via that (ie. your local contractor's board, his insurance bond company, etc.)

Very likely to happen, you need a Construction Attorney. You clearly have been lied to, you have already overpaid, disrespected.

Call me over killer, but each of my project has at least 50 pages of paperwork, does not matter if client requires it or not, even if im only making a chainlink fence.

On top of the malfeasance of the contractor, you should also sue the contractor's engineer for negligence.  If you say he took direction from the Contractor, that is a direct breach of his duty to uphold the public safety as paramount.  As an engineer, his opinion should NOT be swayed by anyone.  

"GC has been extremely disrespectful to me, yelling at me, calling me a liar, etc."

This one thing alone would cause me to fire him. I refuse to put up with that nonsense.

Joey,

I was a building contractor for  25 years. I WOULD NOT FIRE HIM. By firing him your letting him off the hook. First off, the engineer he hire is hopefully, licensed and insured. I would assume that the contractor himself is licensed and insured. 

I think you need to have a list of corrective made up by your engineer. The contractor needs to do the corrective work under the supervision of your engineer, at his own cost. Cost of engineer supervision and construction. At this point he either does the work or he quits. He'll most likely quit. 

Now, you have a very solid claim against him. Defective work, abandonment and breach of contract.

Him quitting after he screw everything up is much better than you firing him!!

Than, you can go after the contractor and his engineer.

I have never seen a building that was un-repairable.  I love to build condemned buildings. There the best deals and can always be fix. I have done 3 in the last 4 years.

I'm so sorry for what happened to you!! I'm heading toward my very first flip so appreciate your willingness to put yourself out there like this. I wonder if also getting referral for contractors in the future might help. I've joined a local REI group and have already got some. Also I have relied on yelp for real world feedback for other big cost vendors so maybe for as an extra resource. People tend to be brutally honest on there. I stress just as an extra checkpoint but certainly not the place from which to make a decision. Thoughts?

Everyone thank you so much for the feedback and schooling. All greatly appreciated. Just to clarify the GC is licensed and insured and is trying to build his reputation with the building department, so I had some leverage in negotiating with him. 

@Steven Picker "money is not an issue" wouldn't we all love that to be the case? We have resources to throw at this building, no one likes to get screwed and unfortunately in a lawsuit, the likelihood of getting screwed would be 10 fold. My business partner and I went through all the scenarios thoroughly and even if we won a judgement 5 years down the road, and $20k in legal fees later, the chances of collecting are almost nil. In CO its quite easy for a GC to bankrupt the company and operate under another LLC. So we came back to our original goal - get this building rented and cash flowing. Sometimes you have to set principal and ego aside to reach the goal.

@Chad Urbshott yes we have grounds for suing, however it would open a can of worms with regional building so we'd not only be throwing money at litigation but would be taking 10 steps back and losing months in the process. Structurally it is sound. The engineer confirmed they did the work as per his plans. However had I known the engineer's concerns we may have scraped and rebuilt.

@Dave Fontana thanks for the advice on not firing. We were ready to fire him, then I read your note and told my partner to squeeze him so much that he would quit on his own, but don't fire him! That was a turning point for us. We were able to get him to agree to fix everything we wanted and come down substantially on the final invoicing, and get him to agree to signing the lien wavers and final settlement paperwork in order to receive final payment upon passing inspection. 

In all fairness to his crew, the actual work was good, verified by other companies. Main issues were the GC not taking any responsibility for anything he broke, unauthorized charges, but mainly floors still so out of level. Much improvement now and what a difference! If he would have done this when I asked things we would've been happy and he would've have gotten full payment.

@Sterlena T. I've had worse experiences with referrals. The best approach is as @J Scotthas said get your contracts in place, hammer out your SOW first, stay in control of the contractor relationship and be thorough in your screening.

your tone fooled me initially you seemed complacent and resigned to accepting the facts,I suggested the lawsuit not to win but to hurt the contractor, your situation reminded me of what is truly distasteful about the business, contractors who always seem to bite the hand that feeds them,so many can prosper if it wasn't for there egos and lack of compassion. Good luck 

Thank you @Steven Picker . I've found that GC tend to get very greedy and often live beyond their means and are terrible business people. Some are very good and slick salesmen, my GC for example. He's shot himself in the foot and got far less $$ than he was expecting plus still putting the extra time to do to our satisfaction that he was balking at before. I'll still register my complaint with regional building and he's out a 100k job (we had just gotten started!) and a referral.

My business partner has been involved in a couple of big lawsuits as defendant and plaintiff. Both ended up costing him dearly so he has an aversion to them now. 

The good here - LESSON LEARNED! 

Hi Folks from a GC speaking on behalf of the "Good Guy GC Fellowship". This thread really pains me because it implies that GCs aren't to be trusted in the normal course of business. I'm not doubting for a second that you got tangled up with a bad one but for the most part there are lots of good ones to choose from. This rehab sounds challenging and I would have done some serious vetting for a contractor with an extensive resume of structural work. Not all GCs have the same skill sets. I'm tossing this out there for the general readership. As J suggests, develop an explicit SOW and if there's anything unusual in it, such as an engineering requirement, double down of finding the required qualified experts, vet them carefully, get written recommendations, and then follow their advice. I live eight blocks from the gas explosion in the west village of NYC that just took down three buildings. It's sounding like there was some questionable gas line work being done to cut corners, maybe to avoid inspections, and definitely to save some money. My advice is always to hire competent professionals, pay them fairly, and build a solid working relationship with them.  

Sorry it got so ugly.

@Wayne V. Absolutely there are good GC's out there! It just seems with the amount of complaints from clients on GC's, it seems to be a line of work where there is more dishonesty than usual because of the amount of power they wield, such as lawyers and doctors, except without all the required education required. So I'm not surprised that many of them take advantage of this power.

Like everything else in life there are the good and the bad. Just takes many of us sifting through the bad to get to the good ones. @J Scottadvice and resources are crucial to help avoid wading through the muck.

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