Contract Question...

RiskIt

Hello, thought I'd ask other GC's and anyone with experiance what there take on this is.
I've been working a re-roof for some time. HO hired a GC to remodel and build an addition on her ocean house ($750,000). He faild first inspection on tin-tag and never stopped going. Some how he finished the roof and sprayed SPF on it. A real botched job. In a year it's leaking, they have mold, other work is coming back on the GC and he's fighting with his lawyer. (no idea how it got c.c'ed)
ANYWAY, I'm asked to do a complete tear-off and install new roof (flat deck). So much wrong with the job to list.... 2yr's go by and the HO is still fighting in court. She gives up and calls me, signs my contract and gives me a deposit. HO tells me how happy they are to get this done and hands me a card of an Engineer that is helping with the lawsuit and asks me to call him.
Engineer asks for a face to face in his office, tells me my contract is no good and doesn't work. (Not in a nice way). Tells me that the scope of work required is MUCH larger then I knew about. Major repairs.. Informs me that he would like me to redo my price to reflect added work and use his contract format. I also now take my orders from him, get paid by him, etc. I never even was told he was involved. Most of the work is unknown so I have to do it as T&M and that is ok'ed by him. My orig. bill of 30,000 goes to 55,000 and only address two of his 10 items needing repair. Job will run 70-80+. Everything he listed MAY need to be done and some SHOULD be done (i wasn't aware of these problems).
I send over my updated contract with everything he wants listed. He has informed me that the HO has told him they want whatever needs to be done and he is incharge.
I ask him how he is going to get them to sign the new contract.... his office calls and tells me that I need to get it resigned. I ask has he "sold" the new price???? No, I need to explain this to HO. He will "give his ok" but I need to sell it.
I got it signed today. I call and ask if he has any idea what I should have on hand to be as productive as possible when we open up the job. He has NO-Idea... I ask about the type of strapping, he tells me they like "Simpson" (ok, what ones.... ) He shows me a book that I think I used when I was 16 (I'm 40) on wood framing.
I'm very nervous... I've been able to stay very busy even now and have a good name. I try to give the HO what they need and pay for. My name is on all my trucks and doing right means alot to me.
I want the job, the work requested seems like it might need to be done (cant tell till we get into it). I just got a real bad feeling with the Engineer. I get the feeling (I could be wrong) he's looking to milk the job. I'm not a saint but I don't screw anyone.

A) Shut my mouth and make that $$ (what do I know, he's the Engineer)

B) Tell the HO my feelings and make a mess out of everything (again I might be wrong)

C) See how things play out, adjust on the fly. If he's and idiot make the call... but will that stop the $$ remember he pays me now!!!

Any thoughts??
Thanks all

bwalley

It sounds like a CF.

It sounds like an Engineer is trying to act as the GC or an Architect, is the contract with him or the HO?

If you are working for him as a subcontractor and he is not a AIA Architect, you would be aiding and ebbeting an unlicensed contractor and you may not have a valid contract with the HO and you may not have lien rights.

If I were you, I would only sign contracts with the HO, if the Engineer wants to oversee the job that would be 1 thing, but you need to add some money into the job for dealing with the guy.

WoodShop

If the HO has signed the original contract and made a deposit then you are working for them bound by those terms.
I think I would meet with both the engineer and the HO at the same time and get this triangle figured out. It sounds like to me you inspected the site and from what you could see quoted the job for what needed to be repaired. If the engineer wants you to repair more than this, I would get in writing that you are authorized to do more work if necessary through the engineer on behalf of the HO. I would make sure that a new contract is signed by all parties involved and it is clear who is authorized to approve extra work and who is paying the bill. If more work is necessary, great, just make sure that you are gonna get paid.

greg24k

It is very simple my friend. You have a contract...Right? You deal with a person who signed the contract. You know what you have to do, take everything down that needs to be taken down and do the job right. If this guy wants to play the boss, stick his nose where he don't belong, kick him off the job, unless you have an agreement with the HO for him to be there, and your contract states this guy is allowed to be there, and your insurance will cover him if he gets hurt, if not...he has no business being there. Right now you in charge of the job from beginning to the end. Everything that happens on your job is your responsibility, and if anything or anyone interferes and prevents you from doing your job or cause any delays, tell the HO in writing, so you have a record of that and if HO after that still allows that, they have breached the contract and trust me my friend, HO does not want to be in that position. In addition, reading your post, this guy is a nobody and don't know what he is talking about, and he should be quiet unless he is signing your checks.

Good luck

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BigReds

Sounds to me like, he is helping out the lawyers big time by adding things that are getting done by you that should of been done by them.

What HO lawyer's will do is have the GC pay for everything HO charged you and then some. So the more HO's engineer gets things added to the list to be done the more HO will gain from it.

Astrix

I totally agree with WoodShop's comments in that you need to figure out exactly who has authority on this job, and then only take instructions from that person.

A few more thoughts:

(1) The fact that “2yr's go by and the HO is still fighting in court” with the first GC is worrisome. This is obviously a customer who isn’t hesitant to sue and drag it out for years. How do you know you won’t be next if you start running into some snags?

(2) Then you mention that the customer “hands me a card of an Engineer that is helping with the lawsuit and asks me to call him.” Perhaps the engineer is going to be paid a percentage of what the lawsuit settles for; therefore the more damages awarded, the more paid to the engineer (definite bias there for wanting your repair work to be more expensive than necessary.)

(3) Then the engineer distances himself from being the direct party to the repair contract and increased pricing by making sure you are the one “to explain this to HO” and you are the one that has “to sell it” (the new price). Why? Are you being set up to take the fall if they get called out on the overcharges?

If you can't get clarity as WoodShop suggested, perhaps you could get an addendum added to the contract with a Hold Harmless Agreement -- whereby the homeowner and engineer agree to hold you, the contractor, harmless for any and all claims arising out of the method of work, choice of materials, and scope of the job contract as mandated by the engineer. To make it a bit more palatable you can agree to waive this hold harmless agreement if an outside engineer is brought in for a 2nd opinion and upholds the validity of the 1st engineer’s directives.

Last, in order to keep the peace (because the foregoing would appear to be insulting and accusatory of the engineer’s authority and ethics), tell them that this isn’t your idea, but that rather you ran this job by your own lawyer/insurance broker because of the complexity with the pre-existing lawsuit, and that your lawyer/insurer are insisting on these requirements. That way you don’t look like the complainer. (Lawyers and insurance companies have a bad reputation anyway, so easy to push a little extra blame their way ….. )

Tiger

This situation is begging for some quality legal advice. Would you really consider exposing yourself to this amount of risk without getting some legal advice? For less than $500 you can get a good lawyer to cover all of your concerns on this. Think hard on every possible way this could go wrong and ask your lawyer to include terms and conditions to cover it.

Then write up the payment terms to limit your exposure financially. A typical way to accomplish this is with an advance and many quick small payments. My strongest advice is not to have any large payments. If this is T&M have weekly payments. Make it short & sweet like invoicing on Thursday for a payment Friday. No Friday payment and work stops.

Good luck.

greg24k

I don't know how things work in other states, but in NJ its very simple.

HO hires an architect/engineer, they make a drawing or a list of items which have to be repaired. HO hires a contractor who does the work. The contract is between the Contractor and the HO, architect/engineer is out of the picture. The only time I need them, is if I see he made a mistake or something he specified on the plan will not work in the field (it is my job to catch that mistake if this ever to becomes a legal matter and I don't have a claw in my contract to protect me from that) then I will bring that to his attention and rectify the problem with him and move on with the job.

If a HO hires architect/engineer to over-see the job, my contract is with him, not the HO. He is responsible for all the payments according to the payment schedule as it was agreed and signed. Its very simple guys.

I give you an example; I was hired by an Architect to do a complete renovation, he was in charge over-seeing the job progress and he had a contract with the HO, my contract to complete the whole job was with him. As the job was progressing, he was doing a little more then over-seeing the job, to make the story short I end up throwing him off my job and I had that claw in my contract. He started to milk the HO and trying to pass the blame on me. It was unpleasant to be in a situation like that, but I finished the job under the new contract with the HO, it was a week of delay to straighten this mess out and I proceeded with the job as planned. As my contract with the architect goes, the matter end up in court, I went after him for breach of contract, for grossly negligence, for doing his job in recklessly indifferent fashion and I was awarded the judgment on all counts.

Everything is about our contracts, how we structure it, and ourr performance. All jobs go smooth, if minor problems occur, we correct them and move on. Once in a while you get a customer or a situation which is not so smooth, and that is when the outcome of the situation will rely only on the piece of paper we prepared and sign.

Good luck to all

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bwalley

In Florida Registered AIA Architect can run the job, an Engineer if he is a P.E. can seal plans, but they can not run the job unless they have a contractors license and are acting as the GC running the job under his license.

It sounds like the Engineer is trying to run the job, but distance himself from it when it suits him.

If this guy wants to work for a client that is suing another contractor and get in the middle, that is up to him, but he needs a very clear scope of work and a Direct Contract with the owner, he should also be prepared to hire a lawyer if he gets sued.

I would Run from this job, or at least put enough profit into it you can spend $20,000 or more on a lawyer.

RiskIt

There is so much to the drama of the job there was no way I could explain everything.

It is true I never knew about an engineer (engineer is P.E.)
the HO did sign my original contract
The original GC DID screw the HO and DID do illegal work
HO did sign a NEW contract with all items requested by Engineer

HO is a very nice older woman (she is). She tried very hard to have orig GC repair his own work. (Couldn't be done because he did so much illegal work) To save everyone the expence of reading I tried to summerize poor work. Mybe when we open it up I'll post some picture.

She is paying for ALL repair work out of her pocket up front

I'm not so affraid (maybe I'll eat this) with doing the repair work and being watched by a third party (Eng.)

The engineer hasn't said ANYTHING to lead me to think he doesn't want the repairs to be done correctly and in a timely basis.

My problems are... I went from working one on one with HO to now I answer to Engineer. I'm ok with that in as far as doing the work... I don't like having him ok my $$. I don't want anyone messing with my $$.

The engineer hasn't asked me to do any work for free and listed clearly what work he wants done. He has even told me I should charge a higher mark-up on some items.

HO had no problem NOR asked why the bill jumped up so high. At second signing thanked me again.

My main question is I have a feeling the ENG is going to take this job SOOOO far over kill and cost the HO SOOOO much extra $$. When I asked about what he thought would be wise to have on hand he had no idea. He stated that one of his assistence would be on site everyday and sealed drawings supplied. The location of the house makes leaving the site to get something a major deal. No work on island till 9am, off island by5pm. No sat.or sun. work. To leave the site and get a 2x4 would take an 1 1/2min. I'm not trying to be high and mighty but without proper planning this job could easly hit 100,000. If the work needs to be done - do it, but I don't want everyone looking at me in the end as I didn't have the best business practice in place to give best bang for the buck. I will bring anything I think will be needed and my guys do know what they are doing.

Maybe this will help, the ENG. doesn't really do res. work he majors in large skyscapers in Miami and he talks to me like I'm an idiot. If the people have bottomless pockets and I get paid... SWEET.

BUT, how often does that happen? In a NUTSHELL

72chevy4x4

I think they're just counting on getting the entire job completed with as much extra stuff as is reasonable and will then turn around and get the $$ plus some from the original GC, including the PE's services.