How JustAnswer Works:
  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.
Ask legalgems Your Own Question
legalgems
legalgems, Arbitrator
Category: Real Estate Law
Satisfied Customers: 7392
Experience:  Just Answer consultant at Self employed
63726236
Type Your Real Estate Law Question Here...
legalgems is online now
A new question is answered every 9 seconds

Owner -builder dispute- paid so far 169K since nov 2014 to

Customer Question

owner -builder dispute- paid so far 169K since nov 2014 to build a 3 unit building in new Hampshire and both owner and builder in mass. demolished both the old 2 houses last summer and got approval from planning board in jan 2016 and builder did cleared the lot . I paid for selectman bond of 11k as builders bond was not accepted by town of Hampton. also I paid 2800 to the town for city engineers. builder attended preconstruction meeting and all he has to do is apply for the permit and start the job. has been postponing for various reasons and now latest one -says he has 2 other jobs and cannot apply for the permit. probably used my money to do other jobs. looks like he has no intention of doing the project. initial cost of project was 360k and then raised it to 409K. 2) the other problem I have is Builder and his family are also my patients and I am his primary care physician. what are my options at this time.
Submitted: 6 months ago.
Category: Real Estate Law
Expert:  legalgems replied 6 months ago.

I am sorry to hear this;

Both professional relationships are separate - ie the real estate development is separate and apart from the doctor patient relationship. Of course, problems with one can spur problems with the other, so one can find themselves losing a patient, or even defending a med malpractice suit (defending suits can cost thousands of dollars, unless one can establish clearly on that the lawsuit is "frivolous" (without merit) in which case one can seek to have it dismissed with prejudice and avoid future litigation - just wanted to point that out).

So for the building issue, the court will look to the terms of the contract; for example, was a timeline included in the contract, with penalty provisions? was there a "time is of the essence" clause? Even without these, the courts will look to see what is "reasonable" based on local usage and custom. Doing absolutely no work without justification (ie permit issues, weather issues) would likely be deemed unreasonable, especially with a substantial sum being paid up front.

Expert:  legalgems replied 6 months ago.

Generally the court will expect the parties to attempt to resolve the issue between themselves before selling. This generally means sending a letter, certified, return receipt requested, requesting an explanation as to the delay, along with a statement as to when they expect work to begin (and to propose a schedule as an amendment to the original contract, with a daily penalty for failure to perform, if one wishes). If the contractor ignores that, then it is standard to file a suit requesting the return of the monies paid, minus work done to date. Some people will hire a new contractor and sue for the damages (difference between the price the original contractor charged, and the cost the second contractor charged; along with any refund request for money paid without services being rendered; however, this is risky as one can never predict with 10)% certainty how a particular judge will rule- ie whether the homeowner gave the contractor a sufficient chance to complete the project if the contract does not set forth guidelines re: dates).

Expert:  legalgems replied 6 months ago.

The proper venue is where the defendant's headquartered, or where the breach occurred, should it prove necessary to sue for completion/damages.

Please see page 8 and 9 re: delay damages here

Further questions? Please post here to continue the chat.

Satisfied? Kindly rate positively so I receive credit for assisting you.

(no additional charges are incurred).

Information provided is for educational purposes only. Consultation with a personal attorney is always recommended so your particular facts may be considered. Thank you and take care.

Customer: replied 6 months ago.
builder made the proposal with the owner in nov 2014 but no time frame mentioned and only mentioned about getting demolition permit and remove soil,pour foundation and electrical and plumbing for 3 floors and install sprinkler and ac system kitchen cabinets and landscaping according to planning board . gave him 60k and he used the money to pay the architect and going for the town meetings and the town was giving him hardtime as per the builder and hired a lawyer who was attending the planning board meetings and finally when the planning board approved the proposal in jan 2016 -he revised the proposal of total cost to 424k and said we cannot ask him the how the 60k was spent and he showed a balance of 15k . he applied the 15k to the 424k and said the price will be 409K . signed the revised proposal by both the parites on 01/30/16 and took 59 k as downpayment to pay for the teel and to apply for the permit. since jan --keeps telling us that the town is giving him lot of hardship and wants lot of things taken care. I talked to and met planning board chairman - who approved the proposal and told me that the speculations are normally given to all the builders and they have to be satisfied. builder did do most of the things,except when money has to be paid to the town of Hampton, I jumped in and paid for city engineers to review the plans and lawyer tried to help the builder to post the selectman bond- builder got his own bond from his insurance company--was rejected by the town of Hampton manager and I posted the bond with my money through the lawyer and satisfied all the requirements . also arranged for the lawyer and planning board chairman to call the builder - and tell him everything is all set and he just has to go and apply for building permit and and pay for the permit. when I called last week -- he started to swear at me and went off the wall yelling and screaming at me and said he will not do the job and I can go to hell and I keep talking to various people. also said he is on 2 other jobs and cannot take care of the permit and will do it on his own available time. if we don't do the road work before certain time-town of Hampton beach wont allow us to dig the road to connect the water and sewer line to the house. builders parents were my patients and they were old. both have passed away -mother 8-9 yrs ago and father 9 passed away 2 yrs ago at a tertiary hospital in boston. . had prostate cancer and heart disease and copd .I think he wants to find a way for malpractice suit if I go after him for this construction project.
Expert:  legalgems replied 6 months ago.

Oh my. The last statement is very concerning, and as you will notice that is a concern I expressed (frivolous lawsuit). When a party to a contract states that they will not perform according to the terms of the contract,that is called an "anticipatory breach". A "repudiatory breach" is a breach by the other party expected to perform which is sufficiently serious to allow the other party to bring the contract to an end via formal declaration.

Also, since the courts look to "reasonableness" they would likely determine that a delay that will result in city officials denying a previously approved project is by definition unreasonable, as reasonable people would expect the contractor to comply with time restrictions imposed by the officials.

Another red flag is a failure to provide an accounting.

I would urge you to hire an attorney to draft a letter addressing both the anticipatory and repudiatory breach issues so that the other party is put on notice that such actions are considered a breach and allows for the contract to be voided. It is very important to have an attorney prepare this document so that it is worded correctly so that it can help prove to the judge that all efforts (reasonable) were made to resolve the issue without litigation. The attorney will likely provide a detailed summary of events that will help document the issues confronted along with the delays.

Customer: replied 6 months ago.
owner and builder live in mass state and the project is in Hampton beach NH. talked to my local attorney who did our realestate trust and LLC and family realty trust - and he says 1) to fire the builder 2) fire the builder as a patient and his family 3) he said even if the builder wants to bring a lawsuit for medical malpractice because his 90 yrs old father passed away he thinks it has to be accepted by any lawyer as it will be a frivolous lawsuit and that I have medical malpractive insurance. 4) then he will say to file a lawsuit to recover the money if possible what ever we can get. I don't know how much he will charge for these legal work and how much percentage of the recovered money to pay him.5) I would like to have some lawyer involved to arbitrate or diffuse the situation and make him do the job and finish with out loosing large sum of money given sofar. I tried to pursue the NH lawyer who attended the planning board meetings if he is willing to get involved to distribute the money for the construction with conditions but he didn't want to do it. 6) tried to talk to builders wife -who helped in april to talk to the builder to finish the job and he did finish few requirements for planning board. talked to her after our heated exchange last week and she said she will talk to her husband and let me know . tried to call her today but no response so far
Customer: replied 6 months ago.
should I call the builder again tomorrow to see what his plans are and when he thinks he can finish the other 2 projects so that he can start our project --he always says he has spent lot of hours and has to be paid for his effort. when the builder agrees to build a house - is it the money paid will be part of the money paid for his efforts and time to get the permit and do the project. without permit -building cannot be built and owner is not responsible to get the permit as we don't know how it works.
Expert:  legalgems replied 6 months ago.

It is generally best to communicate via written correspondence (be it letter, email) so the conversation is documented and can be attached as exhibits if litigation proves necessary.

While a contractor has to be paid for their efforts, they are also bound by the terms of the contract; so while there can be cost fluctuations in building contracts (due to delays that are not the fault of the contractor, increase in building material costs, unpredicted scenarios - ie rise in permit costs) each party is still expected to be in substantial compliance with the contract to avoid a breach. Just as the contractor has a right to be paid (via the terms of the contract), the paying party has a right to receive something for their money (per the contract).

Generally the contract will address who is responsible for obtaining a permit; normally the contractor will take that responsibility on, and charge accordingly (precisely because the owner will not be familiar with the process)

Customer: replied 6 months ago.
02 June 2016 10:09owner and builder live in mass state and the project is in Hampton beach NH. I talked to my local attorney in mass who did our realestate trust and LLC and family realty trust - and he says 1) to fire the builder 2) fire the builder as a patient and his family 3) he said even if the builder wants to bring a lawsuit for medical malpractice because his 90 yrs old father passed away he thinks it has to be accepted by any lawyer as it will be a frivolous lawsuit and that I have medical malpractice insurance. 4) then he will say to file a lawsuit to recover the money if possible what ever we can get. I don't know how much he will charge for these legal work and how much percentage of the recovered money to pay him.5) I would like to have some lawyer involved to arbitrate or diffuse the situation and make him do the job and finish with out loosing large sum of money given sofar. I tried to pursue the NH lawyer who attended the planning board meetings if he is willing to get involved to distribute the money for the construction with conditions but he didn't want to do it. and also he does not want to get involved with lawsuit as he said both the parties live in mass 6) tried to talk to builders wife -who helped in april to talk to the builder to finish the job and he did finish few requirements for planning board. talked to her after our heated exchange last week and she said she will talk to her husband and let me know . tried to call her today but no response so far
Expert:  legalgems replied 6 months ago.

Did you mean to post that in a new question? I couldnt' tell because it had the date on it and is relisting some of the things we discussed, with additional details?

Customer: replied 6 months ago.
because the local lawyer I called gave me those 4 points in the previous question and what is your opinion on those 4 points suggested by the lawyer and 5 point I suggested to him
Expert:  legalgems replied 6 months ago.

Thank you for that clarification.

1. Before firing a contractor it is standard practice to state that intention so it can be shown to the court that the party tried an out of court settlement.

2. If there are any pending proceedings (medical) that would be unduly delayed and a reasonable physician would not terminate the relationship due to the urgency of the medical situation that can be grounds for malpractie.

3. Many lawyers unfortunately take frivolous lawsuits; medical malpractice goes up substantially when a claim is settled/litigated and 90% of cases settle just to avoid legal fees

4. I'm not clear on this. concern that the contractor will file a lawsuit ?

5. I agree with # ***** - the proposed letter above requesting a statement as to when the job will be resumed and also a proposal re: scheduling dates and possible penalties for undue dela

For cases such as these it is generally best to hire a construction law attorney with litigation experience.

6. unfortunately the spouse cannot legally speak for the contractor; she may have influence, but anything she says (ie promises) won't have a legal effect.

I think I addressed them all!

Customer: replied 6 months ago.
4th point is --the lawyer says after firing him as a contractor and as a patient -- then he will look into filing a lawsuit against the builder to recover the money and for this lawsuit --how much charges will I incur to pay lawyer and how much percentage of the money recovered do I have to pay the lawyer
Expert:  legalgems replied 6 months ago.

Oh thank you.

That really depends on the fee agreement with the attorney; generally they are hourly, and can range anywhere from $150-600 depending on the location of the firm (city versus country), the experience, prestige, etc. Litigators charge substantially more than a regular attorney who does not focus primarily on litigation. Some lawyers often have an "office rate" and a "litigation rate".

Only a percentage would be due to the lawyer if the lawyer agreed to take it on contingency (versus hourly) but that would need to be worked out between the attorney and the client via the fee agreement.

Expert:  legalgems replied 5 months ago.

Thank you for using Just Answer.
I hope the information provided was useful.

Here is a link to the bar association's legal referral site:
http://apps.americanbar.org/legalservices/lris/directory/

Should you have further questions please post here; otherwise kindly

--- Rate Positively---
so the site credits me for assisting you.

Thank you and take care!

Related Real Estate Law Questions