Hello everyone,
we are considering changing the general contractor. The bank has already approved this. My question is, what might be disadvantages of switching? Where could potential pitfalls lie? I’m simply hoping for your experiences so we don’t overlook anything important...
Background:
We signed the contract with the general contractor in August ’16, and in December received the completed applications for the building permit, which was granted in January ’17. We informed the contractor in December ’16 that we wanted to start as soon as the weather allowed at the beginning of ’17, which they confirmed. There is no contractually fixed deadline since, due to the planned owner-occupied work (electrical, garage, and floor work on the upper floor), the contractor did not want to commit to a schedule. Since then, communication with our contractor has not been satisfactory:
Our site manager was reportedly only informed at the end of January that he was to oversee our build and has appeared unprepared at every conversation so far. (For example, in every meeting, he has asked whether we were doing any owner-occupied work or not.) He overlooks small traps I include in our correspondence.
When some of our neighbors started in the second calendar week of February, we were still chasing our site manager to find out when work would finally begin. He tried to reassure us by saying he first needed to find a construction company. I replied that this should have been done back in December, when it was already clear that the building permit would be issued in winter (the typical processing time in our area is four weeks, which was also the case here).
It dragged on until mid-March before a construction company was even found (after, reportedly, another company unexpectedly withdrew a week before the planned start date). This company then took a total of three weeks to complete the foundation slab (on a flat, shallowly excavated lot without a basement). For our neighbors, this process mostly took less than a week. “Our” workers averaged two days per week on-site, while others had workers present daily.
Since then, there has been radio silence from the construction company. I have not been able to reach the foreman for over two weeks. He does not answer calls, voicemails, or emails. Our contractor’s site manager keeps promising at short intervals that work will continue—of course, without it actually happening. Several of our neighbors, for example, are receiving their floor slabs this week….
Therefore, we have now started talks with our bank and other companies who could take over the construction for us. I have already informed our current contractor and asked him to consider a contract termination. (So far, we have paid the contractor 2% for architect services and 10% for the “foundation slab” construction phase. A penalty for contract termination would be 10% of the contract sum, although I do not consider this justified given the significant construction delays.)
we are considering changing the general contractor. The bank has already approved this. My question is, what might be disadvantages of switching? Where could potential pitfalls lie? I’m simply hoping for your experiences so we don’t overlook anything important...
Background:
We signed the contract with the general contractor in August ’16, and in December received the completed applications for the building permit, which was granted in January ’17. We informed the contractor in December ’16 that we wanted to start as soon as the weather allowed at the beginning of ’17, which they confirmed. There is no contractually fixed deadline since, due to the planned owner-occupied work (electrical, garage, and floor work on the upper floor), the contractor did not want to commit to a schedule. Since then, communication with our contractor has not been satisfactory:
Our site manager was reportedly only informed at the end of January that he was to oversee our build and has appeared unprepared at every conversation so far. (For example, in every meeting, he has asked whether we were doing any owner-occupied work or not.) He overlooks small traps I include in our correspondence.
When some of our neighbors started in the second calendar week of February, we were still chasing our site manager to find out when work would finally begin. He tried to reassure us by saying he first needed to find a construction company. I replied that this should have been done back in December, when it was already clear that the building permit would be issued in winter (the typical processing time in our area is four weeks, which was also the case here).
It dragged on until mid-March before a construction company was even found (after, reportedly, another company unexpectedly withdrew a week before the planned start date). This company then took a total of three weeks to complete the foundation slab (on a flat, shallowly excavated lot without a basement). For our neighbors, this process mostly took less than a week. “Our” workers averaged two days per week on-site, while others had workers present daily.
Since then, there has been radio silence from the construction company. I have not been able to reach the foreman for over two weeks. He does not answer calls, voicemails, or emails. Our contractor’s site manager keeps promising at short intervals that work will continue—of course, without it actually happening. Several of our neighbors, for example, are receiving their floor slabs this week….
Therefore, we have now started talks with our bank and other companies who could take over the construction for us. I have already informed our current contractor and asked him to consider a contract termination. (So far, we have paid the contractor 2% for architect services and 10% for the “foundation slab” construction phase. A penalty for contract termination would be 10% of the contract sum, although I do not consider this justified given the significant construction delays.)
B
Bieber081525 Apr 2017 21:49Preliminary:
Developer: Purchase of house and land in one transaction; purchase contract; developer acts as builder on own land.
General contractor/general subcontractor: Contract for work regarding house construction on the client’s land.
You either have a contract for work with a general contractor who received your plans and builds a house based on them, or you have no plans and have a contract for work with a general subcontractor who plans and builds for you.
Now, you want to cancel this contract.
Whether this is advisable or not cannot be answered without knowing more about the contract. The simplest and most urgent advice is to consult a specialist construction lawyer.
General pros:
- Better late than never; better to end with a shock than suffer endless distress.
General cons:
- Construction time will be extended.
- Costs will increase.
- Is the new construction partner really better?
What other options are there to bring the construction project to a successful completion? A clarifying discussion with the managing director?
Any further actions should be based on solid legal advice (~300 euros (+/- 50%)). IMHO.
Please report back on how things proceed!
Developer: Purchase of house and land in one transaction; purchase contract; developer acts as builder on own land.
General contractor/general subcontractor: Contract for work regarding house construction on the client’s land.
You either have a contract for work with a general contractor who received your plans and builds a house based on them, or you have no plans and have a contract for work with a general subcontractor who plans and builds for you.
Now, you want to cancel this contract.
Whether this is advisable or not cannot be answered without knowing more about the contract. The simplest and most urgent advice is to consult a specialist construction lawyer.
General pros:
- Better late than never; better to end with a shock than suffer endless distress.
General cons:
- Construction time will be extended.
- Costs will increase.
- Is the new construction partner really better?
What other options are there to bring the construction project to a successful completion? A clarifying discussion with the managing director?
Any further actions should be based on solid legal advice (~300 euros (+/- 50%)). IMHO.
Please report back on how things proceed!
T
toxicmolotof26 Apr 2017 00:07Anyone who talks about a developer at this stage of construction has skipped all the learning phases before signing the contract.
Before you do anything else, make sure to consult a lawyer with expertise in construction law immediately.
Regarding the penalty for contract termination, it is likely not about what you consider fair (especially since there is no completion deadline), but rather what has been agreed upon and/or represents lost profits. However, any lawyer should be able to explain this much more clearly based on your contracts.
Before you do anything else, make sure to consult a lawyer with expertise in construction law immediately.
Regarding the penalty for contract termination, it is likely not about what you consider fair (especially since there is no completion deadline), but rather what has been agreed upon and/or represents lost profits. However, any lawyer should be able to explain this much more clearly based on your contracts.
Even if there is no fixed completion deadline, this does not mean the contractor is allowed to take unlimited time. On the contrary: the work should proceed promptly and within a reasonable period. For more detailed advice and assistance, consult a SPECIALIZED lawyer. So, go to a specialist in construction law, not just any lawyer!
I would avoid pushing the issue as long as the contractor is not doing shoddy work but is simply slow. Good things take time.
Of course, consulting a lawyer can be helpful, allowing you to set deadlines and so on (or at least to announce that deadlines will need to be set if further delays occur, as otherwise the project could drag on for many years).
I would avoid pushing the issue as long as the contractor is not doing shoddy work but is simply slow. Good things take time.
Of course, consulting a lawyer can be helpful, allowing you to set deadlines and so on (or at least to announce that deadlines will need to be set if further delays occur, as otherwise the project could drag on for many years).
Are your neighbors building with the same construction company?
You can’t really make comparisons—who knows exactly when each contract was signed, how the company is structured, and so on. Many pay extra for fast construction progress, and a homeowner has to learn, despite high costs, that neither they nor their house are the center of the universe. It’s normal that a construction company is not immediately fully operational right after the building permit / planning permission is granted, while the homeowner feels things aren’t moving fast enough. However, I agree that the construction fleet should have been organized logistically by then.
Who are you building with?
Best regards,
Yvonne
You can’t really make comparisons—who knows exactly when each contract was signed, how the company is structured, and so on. Many pay extra for fast construction progress, and a homeowner has to learn, despite high costs, that neither they nor their house are the center of the universe. It’s normal that a construction company is not immediately fully operational right after the building permit / planning permission is granted, while the homeowner feels things aren’t moving fast enough. However, I agree that the construction fleet should have been organized logistically by then.
Who are you building with?
Best regards,
Yvonne