Construction Lawsuits: How to protect homeowners
LESLIE: Serena in Florida’s having some issues with her money pit. How can we help?
SERENA: Hi. I’m wondering if you can give me some advice. I have a contract with a builder – April 4th, 2005 – to build me a house. And since then, all I have right now is four walls and a lawsuit. One of the subcontractors is suing the builder and, of course, being the owner, I’m also being sued. And my builder explained to me it’s because the subcontractor made a mistake and he doesn’t want to pay him because it cost him more to fix the problem.
LESLIE: But now you’re stuck in the middle with no home and two years of waiting and a potential lawsuit against you as well.
SERENA: That is correct. (inaudible) today some information from my builder where he’s saying that my house can be completed by June and he’s also offering to pay my rent since I’ve been inconvenienced. I just moved to the U.S. actually.
TOM: Wow. Well, do you have an attorney?
SERENA: I just got an attorney last Friday.
TOM: Yeah, good idea. (chuckling) Back up for me for a minute. Who is suing you and why?
SERENA: Well, the subcontractor that put the foundation of the house and the four walls, he put it two feet too close to the neighbor of the back.
TOM: So the neighbor is now suing you because they say that the house is too close?
SERENA: No, no. It’s against city codes.
SERENA: And so my contractor had already had (inaudible) and so in order to fix that problem he said he had to remove the (inaudible) and that was labor and (inaudible) I would have to throw away. And then we have to break down the offending wall. There was a (inaudible) …
TOM: So why is this your fault? That’s what I’m not following. Why is this your fault?
SERENA: Because I’m the owner. The subcontractor is suing the builder and me.
TOM: Well, the subcontractor may be suing the builder and you but why – I don’t understand why it’s your fault.
SERENA: I don’t get it either. Why (inaudible).
TOM: Yeah, you know what? This is maybe what we call the legal shotgun approach. They basically just …
LESLIE: They sue everybody and then weed it out as it goes along.
TOM: (overlapping voices) … sue everybody and let the chips fall where they may. They try to find out who’s got insurance; who’s got the deep pocket. Your best bet is what you’ve already done and that is to hire a lawyer. Because you clearly are not at fault here. And as far as the builders are concerned with promising you living expenses and things like that, I mean that’s the appropriate thing to do. I would just tell you …
LESLIE: And get it all in writing.
TOM: Yeah, exactly. I would absolutely tell you …
LESLIE: Get it all in writing under legalese with your attorney. This way – you know, I’m sure your builder has the best of intentions and will pay for those expenses. But make sure you get it in writing and make sure you try to get it with a payment timeline so you know exactly when you’re getting what so you’re not left in the dark waiting for some funds that may or may not come.
TOM: And another idea is to put a penalty clause in any type of settlement like this with the builder so that if he doesn’t make a certain date then you get additional funds for your inconvenience.
Serena, thanks so much for calling us at 888-MONEY-PIT.