Good afternoon.

First some background. Recently I got a new position with my company. I stay in Cherry Hill NJ 3 weeks of every month for work, and on the 4th week I fly home to Oregon to be with my family. Hard hours, but that's how I pay the bills.

I rent a room with a friend while here, and recently she and her boyfriend decided to have her basement finished (bare cement floor, and walls), and then rent one of the new rooms to me (Great!). 2 bedrooms, Bathe with shower, and the Laundry room relocated to the other side of the basement. About 600-800 square feet.

She took out a mortgage, and started the process with a general contractor. The contractor was very reasonable, and made all the right noises, and can be quoted as saying "I never pass on additional costs from material rises on to my customers". Presented her with a contract with a nice price (18K) plus 5K for the "waterproofing". The waterproofing was performed in advance, and everything seemed to be going as planned.

They signed a second contract to cover the construction of the 2 rooms, and hallway.

The 18K was due in 3 6K installments. 1 to start. 1 at the "halfway" point to pay for the Plumber & Electrician (which the General Contractor subcontracted), and the last 6K "Due upon completion".

There was a couple weeks of delay as funds, and contractors were lined up, but about 3 weeks ago work started.

You now know what I am about to say; Problems from day one.

I won't go into the whole thing, but the general contractor has been complaining from the outset about a "sudden jump" in materials. The Electrician, and Plumber raiser their prices (by about $400 each), and just general unhappiness.

Then things got worse

I knew there was trouble when the General contractor kept coming up, and saying things like "Oh something we didn't itemize in the contract is the drywall for the walls so that's outside the general build price, and I need money for that."

Where we are now.

The general contractor received the 1st 2 payments (12K in total) from my friend as agreed, and now the Plumber, and Electrician are saying the General contractor isn't coughing up money.

The General Contractor is saying there is nothing of that 12K left, and my friend will have to cough up more money for him to finish the job. He ran out of lumber yesterday, and stated he would come back today, and "Finish up what he could", but then he needs to go to another job to pay his bills.

Speaking with the Plumber, my friend , and my Father-in-Law (who has been a builder in Oregon for many years) it looks like the General contractor completely underbid the contract. He's now working for free on this job, and is understandably frustrated, but he also signed the contract.

The kicker is he also didn't get any permits for this work, and according to the plumber that leaves my friend with no real legal recourse as the City/County/State inspections/approval boards will slap her silly with fines for construction without permits.

What construction is completed
90% of the framing is done.

50% of the drywall has been hung (no ceiling drywall in place).

90% of the Plumbing has been installed.

90% of the electrical work has been completed.


And to top all this off we recently noticed that when it rains the cement all around the basement now gets damp (where he put in the new "Waterproofing system").


I advised my friend that she needs to come to the realization now that whether she sticks with this guy, or another contractor it's going to take more than the last 6K to finish this job. Someone is going to have to Settle up with the Plumber, but she never signed any contract with them. Their contract was with the General contractor (and that's another story in itself). She did agree with the GC that she would pay the additional ~$400 overages for each of the 2 subcontractors, so She is going to do that at this point, but nothing more.


Can anyone offer some advice? I've been looking online for resources to help my friend, but I'm not sure what I am looking for.

It's the same old story about corrup and greedy contractors.
Get a new 'honest' contractor.
Get a lawyer to broker the contract. The $200.00 to $300.00 the lawyer may charge could save you more $ in the long run.

Check out the contractor with the BBB, Consumer departments in the state.
Do a checkup of the contractor before signing anything.

Make sure the contract spells precisely the amount of material to be used in the project. 10% +/-.

The GC should know how to calculate the material needed for the project.
There might be some changes or modifications later on, but never, never in a large scale as this particular GC is trying to squeeze.

You want to trust the people you hire, but that is just not possible in a world where greed is the driving force instead of honesty.

Yeah

That's actually what I recommended to my friend. Today the GC walked off the Job, and said he's never coming back, so my friend is out 12K, and now she has to figure out what to do with a 70% completed job.

Appreciate the advice, and I think it's for the best that this guy walked out.

An alternative to going the lawyer route is to check if your state has a Registrar of Contractors. In AZ, the Registrar of Contractors can impose sanctions against licensed contractors, up to and including the loss of their license. AZ also has a Recovery Fund that licensed contractors pay into, that enables consumers to recover some of their loss for poor or incomplete work. If the contractor does not have a license, then he could go to jail. Good luck.

I will make some really bad notes here.

If the contractor does not pay the sub contractors or he does not pay for the materials, these people will have claims against the owner of the house, unless they got documents signed by them, that they would not hold the owner liable ( release forms)

Next a note a real contractor, bids out his jobs with bids of his own from plumbers and electrical people and the building supplies on any big job, so had he really did a proper bid, he would have had the costs of these sub contracts tied in for at least a 60 to 90 day time frame.

So get the attorney and start to work. Good luck