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Question DetailsAsked on 4/16/2016

Construction company keeps trying to change terms with us while delaying project.

They are asking for money to pay for non completed work, stating that the money is needed to purchase materials, pay for labor. They also said that it is not their duty to finance the project, it is the home owners. We are paying on time as agreed upon. They have changed the contract payment schedule once, they continue to delay the project and back load items while requesting front load payment.

We declined and stated we want to stick to the schedule agreed upon as an adjustment during the process. The adjustment was to come in alignment with our mortgage company. They are attempting to go back and have us pay 90% of the funds and we haven't reached 50% completion threshold yet.

What should I do? I'm worried with the animosity and the problems we are having they are going to continue to delay or do a half ass job. What rights do I have?

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Voted Best Answer

Here is a similar issue question with response FYI -

Basically, hold them to their contract - they should have made sure it covered their direct progress costs - but while it is not their responsibility to "finance" the job, the progress payments in the contrat should have been laid out to cover that. Neither is it your responsibilitiy to finance his day to dsay costs - he should have enough capital to "float" daily costs (excluding major special order items which typically take a separsate % down deposit or prepayment per contract).

I would be VERY careful about him getting ahead of you, because sounds like he si kiting the job - operating without enough cash to pay suppliers and subs. You should not pay for work not properly completed - and on progress payments you can require proof of payment (receipts) for subs and suppliers to be sure he is paying them and you are not going to get a major lien situation at the end of the job or if he folds mid-job.

Note they cannot unilaterally change their payment schedule without your approval - if they did and you bought off on it that may have been a setup for this 90% payment request - leading to them skating off leavingt you holding the bag on an unfinished job that is 90% paid for, and maybe with sub and vendor liens to the hilt. It might be legit but stinks to me - I see red flags waving all over the place.

If he refuses to continue without the 90% payment - then time to call his Bond and have the bonding company pay another contractor for completion under the original contract terms and amount.

If there is animosity make it clear you expect him to adhere to the contract - and if he gets obnoxious or will not perform per contract or cuts corners or cuts quality, maybe time to get an attorney with specialty in building contracts onto the situation. Costs up front but can save you a lot in the end run, especially if he is not paying his vendors and subs.

Answered 3 years ago by LCD

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