Q: At the end of remodeling my home (original contract price $149,000) I was hit with an extra $24,500 for items I was unaware of. The contractor said every time that they were ordered by my architect. But I don’t have an architect! I only had the architect to draw up the original plans but not stay involved with the project. Some of the items are door change, tearing down ceiling and adding foam insulation, supports, front entrance change, etc. Can I dispute the charges or at least try to negotiate and come up with something somewhere in the middle? Do I need to hire an attorney? Thank you. — P.C.
Sorry to hear about your situation. Surprise charges at the end of a job are, unfortunately, all too common. Almost all construction jobs cost more than initially expected – sometimes by a little, sometimes by a lot. Who pays for the cost overruns is a source of dispute on many jobs.
I don’t know all the facts, but based on your description, the contractor was, at best, disorganized and sloppy in his billing. At worst, he did a poor estimating job and is trying to make up the difference by creative billing. In some cases (especially public works) unscrupulous contractors intentionally leave things out of the bid to keep their price low, figuring they can make their profit on “extras.” But most likely, it was sloppiness in this case rather than sneakiness – unprofessional, but not unscrupulous.
Whether the costs are legally binding is based, in part, on the language of your contract. Most written construction contracts – other than one-page proposals – specify that any changes to the work (and price) must be approved by the owner before the work is executed. The standard procedure for this is a change order. If that’s the case, then you are not obligated to pay any of the additional costs.
In general, a fixed-price contract sets a price for a specific scope of work defined by the drawn plans and written specs. Everything in those plans and specs should be completed for the price specified.
Sometimes there are legitimate extra costs that were not anticipated by either party, so called hidden or changed conditions – for example, when the contractor opens a wall and discovers that termites have eaten the framing. Or they did a hole and run into a huge mound of rock.
Other changes and extra costs are due to the architect or owner changing their mind mid-project.
However, the contractor missing some details on the plans, or underestimating his time or material costs, are not the owner’s responsibility. After all, the contractor won the job on the basis of his bid and is contractually bound to honor it.
In some cases, a contractor makes an honest mistake in estimating labor or materials. Or there are extenuating circumstances such as spike in material costs, bad weather, etc. In these situations, the contractor must make his case to the owner, who has the option to pay some or all of the extra charges, at his discretion. Splitting the extra costs down the middle is often the resolution.
If you cannot negotiate a mutually acceptable resolution, then you are faced with not paying the final bill. Before refusing payment, it is a good idea to speak with a lawyer (I am not a lawyer) so you follow the correct procedure and do not expose yourself to liens or other legal action by the contractor.
Best of luck in working out an acceptable compromise – almost always the best approach. — Steve Bliss, Editor, BuildingAdvisor.com
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