Contractor surprise overruns

[Anonymous]

Our contractor built our home over a 10 month time period and is now just finishing a few minor odds and ends. During the building process, there were a few items we verbally discussed which would add to the price of the original contract (ie: retaining wall, skylights, ...etc).

We just sat down with our contractor the other night. He then presented a list of overruns that we were COMPLETELY UNAWARE of. Just to name a couple of the most expensive items:

Excavation overrun: $5,085
Plywood cost increase: $1,400

These items were never addressed verbally or in writing during the entire construction process. The excavation project has been completed for more than 3-4 months. The last time a piece of plywood was purchased was even longer than that.

In some cases, he has receipts to back these figures up, but shouldn't we have known about these things months ago??? If I would have known about these things long ago, I would have budgeted things a little differently. Instead, I get a fat bill at the end of the project that I never knew existed.

The only sentence in his contract that relates to this states "Any and all changes that carry an additional cost shall be agreed upon by both the owners and builder, signed and priced." I haven't signed anything! What should I do here? Thanks in advance.

Brian Kennedy

[Rich]

Any contractor has several responsibilities to any owner... they are On TIME, on BUDGET, and at the QUALITY specified. As soon as he went over budget a change order should have been presented to you with full backup explaining why there was an additional charge. Look through your contract again and look for a clause that goes something like this "no change order work will begin until a signed change order has been executed by owner or architect" wording differs but that's the basic outline of it. If that is in there tell him to pack sand. I would say even if it wasn't in there to pack sand. Not only can those 3 responsibilities be upheld in a court of law it's just the right damn thing to do.

[grumpydasmurf]

In his defense the cost of plywood did increase dramatically in recent months, but I don't think he handled that increase properly.

First off I would communicate with the contractor. Explain you will pay for all the agreed upon charges. I'd get that out of the way with a nice payment check. Then explain that you will need to further investigate these additional unexplained charges.

I'd ask him:

1) Why he is charging more than agreed upon?
2) Why didn't he forsee the costs? Was there a reason or his own neglegence?
3) When did he become aware of the price increases and why were you not informed?

If the increases were do to his own neglegence I wouldn't pay an extra dime. If the increase was truly something unforseen and could not be predicted then I would have to trust my gut and make a moral decision. Treat each increase as a seperate bill. Pay the charges you think he deserves but don't pay the ones you don't think he derves. If you don't think he deserves anything don't pay anything, except what was agreed.