Builder with adequate experience could have headed off problems
Tribune Content Agency
Q: Aftermeetingwith our builder and his agent numerous times, we signed a contract for a home that was to include a three-car garage and a covered porch.
About a month ago, the builder came back and said he could not deliver on the three-car garage or the porch due to the lot size. We were quite upset but agreed to move forward with a two-car garage and a deck. Today, he again came back to say that he couldn’t build the deck at all.
The three-car garage and the deck were very important requirements for us. During the past four months, we turned down a few good opportunities with other builders, and the prices have gone up. We already paid $15,000 to the builder. He hasn’t started the construction due to some delays in getting the permits.
If we want to cancel the contract now, can we get any compensation for the lost time and the price increase? Should we go through the legal path? What is our best option? A:
We don’t know if you own the lot already and simply hired this builder, but that seems likely. At least we’ll assume it to be the case for the first portion of our answer.
We’re puzzled as to who is designing the home. While some builders have architects on staff, most don’t. It’s usually up to clients to hire an architect to design a home. If you own the lot and don’t have an architect, you need to find another builder, one with extensive designing and building experience in your city.
Builders frequently work with several different architects; the architect for your home should have detailed knowledge of the building requirements in your area. The core problem in your situation is your builder seems to know little more about these issues than you do.
Whether you own the lot or the builder does, the builder should have a great deal more knowledge about building homes in your area. The lot size is always a consideration when figuring out what you can build on a lot. Many municipal codes contain restrictions on how close a structure can be to the side of the lot, how far back a home must sit on the lot, and limits on a home’s height, footprint, maximum square footage, and the size of driveways and other impermeable surfaces, along with a host of other issues.
While it’s not unusual that a municipality will tell you that your plans for a home might not conform to the letter of the law, we find it strange that your builder would be so clueless as to not know that the lot couldn’t support your request for a three-car garage and porch.
If the builder thought that key features of your home design wouldn’t pass muster with the municipality, he should have warned you of that—even if he was willing to give it a shot and see if the plans would be approved.
Given that you signed a contract, and probably agreed to modify the contract to delete the three-car garage and porch requirement, we don’t know where that leaves you. Look at your contract to see what rights you have. Consult a real estate attorney in your area to understand the contract and your rights. If you own the lot, we doubt any other builder would have better luck getting the three-car garage and porch built. And if you had been considering other lots that could accommodate a three-car garage and porch, they might have been larger, more expensive lots.
Unless your contract specifically allows you to sue the builder and recover your “loss” from rising prices and lost opportunities, you generally will be out that. However, if this builder is not right for you and you can get your $15,000 back, you can move on to work with a builder that has more experience in your area.
lyce Glink is the creator of an 18-part webinar and ebook series called “The Intentional Investor: How to be wildly successful in real estate,” as well as the author of many books on real estate.
(c) 2014 Ilyce R. Glink and Samuel J. Tamkin. distributed by Tribune Content Agency, LLC.