Issues with General Contractor

27 Replies

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Originally posted by @Senta J. :

@Michael Paris Thanks so much for the information, Michael. That's very disappointing. 

I spoke to an investigator at the MHIC office and he said they may not even investigate a complaint from someone with more than 3 properties. He said it's a gray area and their office is intended to look out for home owners. So, even if you are not seeking reimbursement from the Fund, they still may not take action against a contractor known to be defrauding people.

You're quite welcome! And it's good to hear that they may pursue action despite the Fund's gray area.  It's interesting though, because if you as an owner of more than three properties file a complaint that the MHIC pursues, and as a result, the contractor "fixes" their way, have you not then helped to protect the "home owners" and yet you're not afforded protection?  Yes, it is disappointing.

Anyway, you may be interested in following this post: https://www.biggerpockets.com/forums/51/topics/260...

Senta, This happens a lot and there are few GC's out there who are good past a few projects...why?..I don't know, but right now GC's are having issues finding good help and subs too so their crews typically change a lot.    I don't know what your specific contract says.  We've had contractors we swore were like family and did great on 2 or 3 houses only to "go bad" on the next house and cost us a lot of money.  You're learning.  Lesson #1 - never ever pay a contractor until he is done with that job.  If it's a job that takes a long time, put in writing how the partial payments will be made each week and both of you should sign a project plan.  Contractor and owner will walk thru the plan for that week and check off the list that XYZ things have been completed".  Agree in writing to a couple days for rain delay in the timing, and make the contract include a clause that if the timeline is not met, he has 72 hours to correct and catch up, and with that or no communications returned within 48 hours, you can consider him abandoning your project uncompleted and the contract severed...put a "If timeline is not agreed to and repairs are not completed properly, contractor does not have the right to put a lien on your property".   It will be tough to enforce your contract in court, but at least you have an agreement to refer to and can hire someone else to move on with your property rehab.  Most GC's won't sign something like what I'm suggesting above, and that should tell you something.  Likewise, I've seen investors really abuse GC's as well holding them to unrealistic expectations, making tons of changes and expecting not to pay for them, not communicating well, etc.  I've seen investors not want to pay what they promised to pay the contractor just because they are 'cheap' and think abusing a contractor is an ok thing to do..not implying that you are doing that at all, just saying...that's why it starts w a good detailed contract that each of you lives by. 

@Kristin Kilker I have a mixed feel on your post, and half of them are true. First the no lien thing will not work, and it is true that a contractor will not sign, at least a contractor their right mind would not sign it. An alternate for this is liquidated damages clause, this will be easier and legal to enforce, any reputable contractor will sign this. A good GC has a number of subs in their list, at least 5 each trade, or should know how to screen subs, have proper procedures for subs not just picking someone from craigslist, another form of GC has their own crew and only has special subs for special trades. I strongly agree that most investors abuse contractors and don't want to pay at all not only for the reason mentioned, some just don't want to pay and think they could get away with it, or make false promises to contractors. Some even think when something goes sour, that they are entitled to all monies paid, that only applies to unlicensed contractors. Some generalizations are a common problem but I find only those points above noticeable.

I started working for this gentleman as a 1099 employee he didn’t pay me for the first three weeks on a commercial jobFinally on my fourth week he paid me for three weeks and held a week  that’s cool whatever it’s normal then the following week he only paid me for two days then the following week on Thursday I walked off the job because all of his other employees kept quitting I worked there for six weeks and 10 guys were there so I was overworked underpaid if paid at all  so I walked off the job like I said he texted me saying he’s not paying me because I screwed him over what should I do how do I do a merchant lien  do I give him the notice of lien(my boss Which is the sub of the sub of the general contractor) And if they don’t pay me within 15 days or so then I file the lien