Homeowner Learning A Hard Lesson.

gtmstang

I'm doing a basement remodel for a client/friend. The HO's have been one of my best return customers and reffer me to everyone they know. I only do remodeling and they needed a roof repaired. I looked at it and couldnt do it so they went shopping for a roofing contractor. 4 estimates later they had a contractor who claimed he was licensed, bonded and insured. They didnt take the cheapest, they arent bargain hunters they are quality hunters. Checked his refferences(everyone said he was great) looked at some of his work and decided to hire him. They finished the roof last week and it rained 2 days ago and had 13 leaks. Called him back and he said he would be back asap. No show. Called again. No show. The client already gave him $20,000 on a $32,000 job. Now the problem. Of the $20,000 none has went to materials, which was $16,000. He is a paper contractor with no employees and subs everything. Contrary to what the HO was told. I just got dragged into this today and my friends need to know a course of action. I started looking with the license. No contractors license just a city/county business license, insured, no bonds. They hired a hack and didnt know it. The most important thing to check, the license, they didnt. Now they are looking to a lawsuit, but I told them they wouldnt get far with that. They want to report him to the city, but he didnt pull permits so I think they can get in trouble for that. I told them a supplier could lein on their house for the money owed and they are in it deep. So my advice was take the $12,000 owed to the guy, put another $4,000 with it and pay off the materials. Try to get him to either fix it or hire someone else to fix it and live and learn. I want to feel sorry for them but cant. ALWAYS CHECK LICENSES. When will people learn.

Cole

Wow, talk about a can of worms.

I hope the best for them, but they are probably screwed.

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DavidC

Can your State Attorney General's office offer any assistance? In our area we aren't licensed but our contracts have to meet State regulations and they also govern how we must handle the customers $$. Any deviations give the HO grounds for a complaint and the Attorney Generals office will investigate.

We were cleared of all charges in both cases. :>)

Good Luck
Dave

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JamesNLA

How the hell is that possible? Why would the home owner, who I ASSume has no contracts with the supplier be held liable? THat is crazy....

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Cole

I dont get it either, but I guess it does happen. On a Mike Holmes show, a supplier went after the HO for materials un-payed for as well.

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Meetre

supplier has lien rights here in Idaho, no matter who owes on the account, if the materials went to your house, you are responsible. that's why contractors here need to give lien wavers to homeowners for payments. or at least you SHOULD. And by law, to keep your lien rights, you have to give them the disclosure that tells them about their rights and where to get more info on Idaho contractual law. I use that as a selling point to the customer, if the other contractors aren't protecting you on this, what else aren't they doing?

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gtmstang

They lein because the materials are on their home. In the end the HO is responsible for who they hire and making sure the GC pays all suppliers. I didnt think this was possible either until it happened with a GC I used to sub from. He had 3 houses going at once and was using money from the next to pay for the last. The first house materials were paid for, second house all materials except siding and roofing, third house only half of materials paid for. The HO's paid my crew to finish and fired the GC. A few weeks later the suppliers showed up wanting payment from me. I told them I wasnt the GC just a sub hired by the HO to finish where the GC left off. They went straight to the HO's with intent to lein notices, #2 still has leins on him and the #3 was lucky enough to be rich and paid the suppliers off. State Attorney General is something we will looking into now. The guy can just file bankruptcy and open again with a new name, it happens here everyday. Any job between $3,000 and $25,000 you have to hold a home improvement license no tests, just bonds and insurance. Anything over $25,000 you must be a GC and the scale of your job depends on net worth. They dont make it easy in TN. But you would still be suprised how many pieces of sh!t have a GC license. I'm hoping the best for my friends too, but everytime this happens the HO gets screwed. It sucks too, these guys (the HO's) are the best I've ever worked for. I hate to see a jackass take advantage of them.

MJW

Once the materials are delivered to an address, they are the HO's. Yes, a pre-lien is filed for materials to the HO's property.

I wish more people could see this or experience it. When work is slow, there alot of slicksters out there, and even worse subs.

Snow Man

Well, the only solution I can think of now is TARP the whole roof and start a manhunt.

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MALCO.New.York

That is.........If the PO is connected to, or a delivery was made to the address. Beyond that, what connection could the supplier have to the customer.

AS for liability, THEY did not buy the materials. They NEVER set foot in the suppliers warehouse. They DID NOT sign for a thing that the supplier has title to. So HOW could they be liable???

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DavidC

Once installed the materials are part of the real estate. Sometimes the suppliers only or best course of action against the contractor is to pinch his customer. If not installed the supplier can send a truck to pick up unpaid for materials. Otherwise it's lien the property because he can't remove them.

It sucks, but is the law in our great state. And they deserve to get paid the same as we do. Assuming we don't cause 13 leaks I mean.

But that is why I think the attorney general might be the HO's best next move. At least make it a matter of record that they have a grief with the contractor and he won't respond or remedy it.

Good Luck
Dave

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MALCO.New.York

Just goes to show you what I know 'bout Liens!!!!

Fortune has shone upon me and never have I needed to be privy to such Laws!


I, as I have stated in other threads, prefer a bag of Lime and a shovel as a remedy.

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Something to One may be Nothing to another!

Ultimate Wisdom---------
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DavidC

I would too, but with my luck......

We did have to file a lien once on a new house. The house had sold for 116K and ended up with over 200k in liens. GC went bankrupt and rumor has it a certain banker was no longer employed.

We got .10 on the dollar, our attorney billed 1/3 of that.

Good Luck
Dave

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JamesNLA

What a retarded law.....

What ever happened to contractors filling out credit apps and EARNING net 30 terms? It sounds like these suppliers will give anything to anyone, and just go after the home owner when the crack head won't pay his supply bill. I get the whole "can't get blood from a turnup" but come on. Seems there is a total lack of structure and responsibility in these states.

I think if I hired someone to do my roof or whatever, and he didn't pay his bill than there is some lame supply house comming after me....I'd go Malco's way....lime and a shovel. The desert is not too far from me!!

That sucks for all the home owners that have gotten screwed. Now I get why contractors send home owners to the box stores for supplies. I had no idea....humph.

__________________
"....And then we all switch places when I ring the bell"
-Adrock

DavidC

I does just show that it is extremely important to hire your contractor carefully and there will always be somebody to beat the system.

Good Luck
Dave

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TxElectrician

This law can actually help out the contractor. On any job where estimated material is going to be over $1,500.00 I will set up a job account. While I'm still liable for the amount due, should the customer not pay, the supply house has all the information available to begin the lien process. Sometimes it helps in collections for the customer to receive multiple notices of intent. Also, the supply houses are not as likely to freeze your entire account if you only do not pay on a specific job.

Splinter

I took over the completion of a basement remodel early last year. The original GC was the homeowners brother-in-law who screwed them. Homeowners had paid him in full. I tore out a lot of the drywall, framing, tile, etc, so now they were paying for the project twice, right?

About once a week someone was knocking on their door or calling to notify them of another lien on the house because the brother-in-law never paid his suppliers. So the homeowners paid for the project THREE times.

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Long Island Remodeling Contractor

72chevy4x4

why would a supply house send $16k in materials to a job without having a solid account with the contractor (or sub)? They wouldn't do it! It's a shame, but the lien on the house is just to get the HO to pressure the contractor. May not be 'fair', but someone's got to get paid.

jensenconstruction

James,

Being in California you may want to read up on the lien laws.

A supplier here can upon delivering materials to the job site send out a 20 preliminary notice and have the same lien rights as a subcontractor. This is why most if not all commercial projects require conditional lien release from suppliers and subs to be submitted with billing.

I've seen it a few time on commercial projects when the GC fell behind in payments, and once on a residential project when the roofer took the money and ran without paying his bill at the supply house.

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Bay area Painting

Kgmz

This is the way the supply house/lumberyards do it around here. Our accounts are broken up into sub-accounts with the delivery address as each sub-accounts name. And when they setup each sub-account they have already received from the county the parcel number of the property, legal address, legal owners name, etc. Everything they need to start a lein if needed.