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I am getting a lawyer, but would like your opinions as well...questions about side work(22 posts)

I am getting a lawyer, but would like your opinions as well...questions about side workKristin
Sep 11, 2002 7:03 AM
This whole thing is starting to get messy, so I'm going to get hire lawyer today. This thing is getting a little over my head. There's a possiblility that power within the association is unfairly stacked in the developer's favor

In addition, there's some confusion over optional upgrades. I was told that I could get an extended kitchen for $1710 at the time I looked at the unit. The picture shown to me had a full row of cabinets, top and bottom. Of course they never pointed to that picture and said, "this is what you get for $1710." Now, there was no mention of options not being available when I signed the contract. And I was never directly told this by the developer. But when I said I wanted the cabinets, they sent me to talk to the contractor (long ranger kind of guy) who said he'd be doing the work on the side. However, they are still talking about rolling the costs of materials into the contract and into my mortgage. In addition to that, the contractor told me that the $1700 option was a only a half row of 18" deep cabinets. Of course the contractor wants cash and was hesitant to give me anything in writing. Ugh! All of this is making me feel that these people are a little shady.

Is it badly illegal for the contractor to add cabinets on the side that will be included in my purchase price?

Even if its not legal, is this sort of "side work" often negotiated with new properties?? I mean, is this common practice?

If it were you, would you go for it, or leave it and add your own upgrades later?

The fact that the developer was not upfront about the options becoming unavaible at the time I signed the contract I will leave for my lawyer. I'm willing to take some risks, and I do want those upgrades, but I don't want to get into trouble. It would suck to be financially liable or lose time in court over this later.
walk awaymr_spin
Sep 11, 2002 7:18 AM
I would walk away from this deal. These people sound pretty shady to me. If you really want this place, getting a lawyer sounds like a good idea. Otherwise, I think you have good grounds for invalidating the contract and walking away scott free. If nothing else, you might need to threaten to do that to get the developer's serious attention.

The contract should be very specific about what you get for your "extended kitchen" and your $1700. What does it say? I'm no contract lawyer (but I did stay in a Holiday Inn Express), but I don't think pictures count for much.

Do not pay the contractor cash or accept that he will do it "on the side." On the side (and the demand for cash) probably means that he is off the books and not covered by worker's comp insurance, which could be a big liability for you. Legit contractors don't work this way. In California at least, they can normally only ask for 10% or $1000 up front, whichever is less.
might be nothing but...ColnagoFE
Sep 11, 2002 7:32 AM
i'd get a lawyer to look at it if it was me. the power is usually in the developers favor so make sure you know what you are getting into.
Are you saying a builder LIED? Oh, the shock!cory
Sep 11, 2002 7:43 AM
jeeeeZUZ I hate dealing with those @$$holes. And my brother IS one.
Read your contractLLSmith
Sep 11, 2002 7:45 AM
Your contract will spell out all the terms you have agreed on with the seller.Anything else is hearsay. It would be normal in my area to have a list of upgrades and prices available.Paying for upgrades in advance is normal in my area for all new constuction.The upgrades should be added to the contract sales price. The money should only be given to the developer/builder.This money is to be counted as part of your down payment.If the seller puts upgraded cabinets in your condo and you walk from the contract they would be out the money for your upgrade.If you want the upgrades do it now. You will probably never do it later.Why would you be taking any risk?
fraud vs. contractDougSloan
Sep 11, 2002 8:35 AM
Generally, in contracts such as this, if it's not in writing, it doesn't count.

However, if you were defrauded into entering into an agreement based upon a verbal or visual misprepresentation, you may well be able to hold the builder accountable or rescind the deal.

You can hire a lawyer and fight this. Unless you are out actual money, though, I'd tuck tail and move on, and do business with someone you can trust a little more, or who at least has not been proven to be untrustworthy. Life is too short to spend it fighting.

If you have a signed contract to build a certain house at a certain price, both of you can probably be held to it. The upgrades might be considered distinct, to the extent that the builder is not required to do them, or do them at a certain price. If the builder misled you about an upgrade after you signed the original contract, you still might be stuck having to perform the original contract. Just a guess, though, without knowing everything about this.

My advice -- get your money back and cancel the contract. Go find someone else. These "side deals", while potentially "normal," are indications you are dealing with dishonest people. You might regret it when the "side deal" guy claims he didn't get paid and liens your house, then sues you for what the general promised him. I've seen this maybe 5,000 times.

Either get everything straightned out to your satisfaction or move on. The writing is on the wall. If think you have problems now, just wait until the builder doesn't complete on time, does shoddy work, won't come back for warranty, or has liens pile up. Not good.

You might buy at least one hour of a lawyer's time to get some advice. You need not commit to $5,000 of fees. Just use the laywer as problems arise. It does get expensive very fast, though. Just to review and analyze your contract might take an hour, and at $200 and hour or so, it mounts fast. Get your act together and get to the point when you meet. Otherwise, you waste time at $3+ per minute.

Doug
ThanksKristin
Sep 11, 2002 9:14 AM
I spoke with a paralegal last hour--the lawyer was at closing. There doesn't appear to be a claus in the contract for a legal review...however, I believe Illinois gives 5 days to do this by default. This is day five. The lawyer will reviewing the contract and getting back to me this afternoon with quotes and info. At this point I've decided to cancel all "options", "upgrades" or anything otherwise additional to the unit and just do what's on the contract at the agreed to price. My lingering concern is obviously regarding the manner in which this property was built and the way the contractor has been paid. I will be getting a home inspection as well, and have my lawyer find out if the construction workers are bonded (or whatever they should be) and if they are covered by insurance thru anyone at all. If not, I'm out.

I might still buy this property. Just because the sales woman is not straight forward doesn't mean that the owner is dishonest, but it could be so. I'm gonna do my best to discern that in the next two days. Thanks again for all the advice!!!

Question. I have a friend who's a home inspector. Could there be a problem if I hire him and then get out of the contract based on something he found? In other words, am I better off going with an inspector who isn't an aquaintance? I trust my friend, but if I'm going into this looking for a way to get out, I'm afraid this will look bad.
few more thoughtsDougSloan
Sep 11, 2002 9:50 AM
Typically, and I don't know about Illinois, those backout clauses are for door to door solicitations, requiring the contract to be made at your residence. The lawyer can tell you for sure.

Subcontractors probably are not bonded on home construction, but rather you request "lien releases" from the general for their work and supplies. If you have a construction lender, like a bank, it will probably look out for this for you. Keep on top of it, though.

The lender usually disbursed money to the general based upon percentage or stage completion of the work. The lender usually checks this out a few times during construction, or relies upon representations from the builder or official inspections. Make sure the builder does not get ahead of the draws against the loan, if that is the way it is being handled. Possibly, the builder is obtaining his own loan, and you only buy from him at closing. Not sure how you are doing it. In that case, it's not really your concern.

Just remember one thing: Never, ever, close until you are happy that the home is complete and correct. It becomes much more difficult to get the builder to come back and do anything after he has his money and the house is in your name. He may try to convince you that he'll return to replace some carpet, install a fixture, or something like that. If you close, it could be months and lots of aggravation to get his attention. You may feel pressured because of your loan APR potentially changing or having to move from where you are. Just don't close until you can accept the house as is, if necessary. It's all your risk at that point. I know some of the pitfalls. I have built houses myself, I've worked with my brother as a general contractor and developer, and have done lots of construction legal work. The one thing I know for sure is that your power to get something done or corrected drops about 1000 times once you close. Insist things get done before closing.

A private inspection might not be a bad idea, usually not done for new construction, though. I doubt anything the inspector finds would allow you to void the contract. Chances are, it would not be considered a substantial defect or breach, but something that could be cured. At walk through, you will have an opportunty to identify items for completion or repair. Having an inspector there then might help. Insist that everything get done before closing. (I'm harping intentionally.) I don't think it matters a whit whether the inspector is a friend or not.

Finally, don't continue with this deal now with the idea that you'll look for an out later. You likely won't get it. Courts typically consider the concept of "substantial performance", that is, did the builder do almost all of what he should, less some minor problems. You still have to buy the house, subject to the builder's liabilty for the defects.

Yes, you probably need a lawyer for basic advice particular to Illinois law who could write a few nastigrams for you.

Doug
Doug, your invaluable!Kristin
Sep 11, 2002 10:05 AM
I appreciate all of the information you give, regarding any matters. But especially this. Just for clarification, the "out" I was talking about regards just trying to get out of the contract should I discover that this property is not a safe financial investment. In only needs to be a safe investment for 5 years in any regard. I don't plan to live here forever. It might be too late in any regard. But I'll wait to see what my lawyer says about that. Hopefully he'll call soon...(watching the minutes tick by). Again, thanks for all the clarifications! I'll post back the final result.
Make sure you get title insurance if you buy.LLSmith
Sep 11, 2002 10:14 AM
In some states its optional. There will be a one time fee and you won't have to worry about any others having any type of interest in your property.Don't confuse this with lenders title insurance.Make sure its your policy...money well spent.It sounds as though you might have had a change of heart. If this is the case why don't you just back out now?Save everyone some time and money.Does your contract give you the option of backing out based on the results of your inspection? It will be tough to find something serious enough to warrant voiding your contract.
Make sure you get title insurance if you buy.Kristin
Sep 11, 2002 11:17 AM
1. I might be stuck. I'm under contract, and there was no claus allowing me to seek legal advice. (I didn't know to look for one.) I can't afford to lose $2000 right now. If I can't get out of the contract, then I'll just make the best of it. Its only a 3-5 year investment. Not ideal, but survivable.

2. There are indicators that some trouble may be lurking, but this has not been proven. I like the unit and would love to live there--I'm just questioning the scrupples of the builder/owner. The last thing I want to do is make a rash decision based on feelings. I'll wait to hear from my lawyer and then proceed based on his recommendation.

3. I won't find another new property in this area for $86,000. Everthing in that price range is 20-30 years old and needs at least $10,000 in updates. If I let it go, I won't get it back...there are only 2 units left.

Basically, I won't get a redo on this. I need to choose well before making a decision. I don't have the information I need to do that just yet. I'll make sure to get title insurance for myself. Thanks for the tip! I bet its not required in Illinois--very few things are required here. (Gosh, you aren't even required to know how to drive to get a valid license!)
nice furniture!mr_spin
Sep 11, 2002 12:26 PM
Is that really what it looks like? I thought you were a young woman! That looks like furniture that much older people tend to have! :)

First of all, this is a condo, right? I don't think you need title insurance, since you won't own any land. With condos, the association (I think) owns the land and all you own is airspace. Condos are funny things, legally.

Second, unless you are a professional (or just wealthy), you will have buyer's remorse after every house you ever buy. It's a scary thing to sign for that much money, and doing so locks you into a certain lifestyle from now on. Now you have mortgage payments. Most of your buyer's remorse will go away pretty quickly.

True, you probably should have gotten a lawyer before signing the contract, but who knew you would need one? Just because there is no clause, doesn't mean you can't get one now. One of the reasons we have so many lawyers in this world is because of situations like yours. There is nothing stopping you from trying to nullify the contract now except time and money.

But...

As I said earlier, if you really want the place, don't fight it. Hold them to what is written in the contract and what you paid for, but no more. No inflated extras, no "on the side" upgrades. If these guys really are shady characters, you can probably get better cabinets than they want to sell you made and installed for the same price.

Take the place, enjoy it. Five years from now when you upgrade, you'll be a whole lot wiser about home buying. You are not alone, trust me. I had the advantage of having a mother who was a realtor, and my parents had also owned several rental properties. They were experts, and they helped me out a lot.
I don't get white furniture and carpetColnagoFE
Sep 11, 2002 12:49 PM
It looks good for about a week if you're lucky and then shows every bit of dirt around no matter how you steam clean it or vaccuum. Even worse if you have pets and kids.
you just need to cover it upmr_spin
Sep 11, 2002 1:06 PM
Plastic slip covers and carpet liners. Cover it up so it stays clean, so one day when you sell it or get rid of it, it looks perfect. Sure, you never got to enjoy it, but it sure looked good when you got rid of it!
Ugh! I lived with a New Jersey housewife onceKristin
Sep 11, 2002 1:39 PM
In Saddle River. Absolutely everything was covered in plastic. She owned 25 different sponges, all living in their own containers, labeled by room and function. All the furniture would squeak when you sat on it.

As far as the photo, that's not my furniture, but I wish it was. Its cleaner than my 7 year old hand-me-down sofa. Though I love my 65 year old wing chairs, my nana's sea trunk that shipped our families prized possessions from Germany in 1911, and the chest of drawers built in either 1917, 1920 or 1950. The furnishings in the photograph belong to Mr. Harlem Furniture. Perhaps he's feeling generous and will donate to a good cause.

Here's another picture. My cabinits will be similar, but I'm omitting the two in the middle and dropping the counter top down to 36" to create a workspace for my servers. And I won't get the wine rack or glass doors. :-(
the country kitchen!mr_spin
Sep 11, 2002 1:57 PM
That's more like it, although I don't like the rounded over edges of the cabinets. Also, glass doors are very nice. They really open up the space, especially if it is small to begin with. But then if you are going to fill the room with servers and cables, I guess it doesn't matter! :)

Keep in mind that if you are only going to be there for five years, you don't want to do anything too radical that will turn off future buyers.
I believe that this will be an enhancement, and not a deterantKristin
Sep 11, 2002 2:27 PM
In such a small place, I think that a nook where you can setup a computer workstation will be a selling point. I can add the glass later for around $150. I use my Christmas bonus for that. While selling, I'll hide the servers. (I just use them for test prep anyway.)
My lawyer called!Kristin
Sep 11, 2002 2:22 PM
He was very reassuring. Its the first time in my life I'm glad to spend $325. I explained all my concerns about the additional items I wanted to add and about the association. He was not at all concerned about the additional items. He said that we could just add a rider to the policy that explained the additional $1900 (contractor came back with a solid quote--wow) to add the extended kitchen, and that can go right into the mortgage. That comes out to an additional $12/month. Thats just 2.5 Frapacino's!

The only caution he gave me was regarding the properties open policy regarding rentals. The only stipulation in the bylaws regarding rental property is that leases must be in writing, written for a period of more than 7 days, and submitted to the board. The caution is that if the owner occupancy ratio becomes too low, then FHA and VA will not approve them and it will be harder for first time buyers to obtain financing.

So it appears to be good. Having legal reassurance in this makes me feel so much better. My lawyer said he thinks this is buyers remorse more than anything. So I happily part with the $325.
Glad to hear you got it worked outLLSmith
Sep 12, 2002 7:45 AM
Wow, buyers remorse and your cabinets are not in yet.I hope your unit will be done soon or you might end up with some hefty legal bills.We probably won't see one condo sale in ten years.If my memory is correct you will be getting a deed for your unit(airspace)and for an undivided ownership interest in all assoociation common elements.Check with your closing attorney on owners title insurance.All states are different so it might be available in your area.If it is your closing attorney will explain how any title defects might effect your interest.In my area all condo associations have a maximum number of units that can be used as rental property for the reason your attorney mentioned.It really helps protect the owners. Do you have alot of additional kitchen counter top work space?Could you move your server area to the far end and make it a desk? Kitchen work space is a real premium item.
Kitchen workspaceKristin
Sep 12, 2002 10:51 AM
I don't think it was completely buyers remorse. It was buyers anxiety coupled with a lot of confusion over things I'd signed but didn't understand. I feel SOOO much better after speaking to someone who is 100% in my corner and knowledgable.

The extended kitchen will be similar to the one in the picture above. The cabinet in the center bottom will be removed and the counter top will be dropped down another 3 inches creating a workspace area where a chair and computer can go.

To top everything else off, Expo is selling some nice ceramic tile for $1.99/sq foot. So I'm going to have this installed instead of the linolium (sp?). There are no appliances or cabinetes installed yet so now seems like the best time to do it. The tile will be a nice selling point and will be more attractive/durable than that ugly linolium. I think its worth the money to do. After this, I'm spending no more money!!!! I swear! I think...
beware the money pitmr_spin
Sep 12, 2002 11:15 AM
You're lucky in a way. You are buying a brand new place, and you aren't buying a house. It's possible that you may only need to make one trip a week to Home Depot!

If I ever lose my job, I'm going to work down at my local Home Depot. I already know where everything is, and I mean EVERYTHING! I was down there once a day for a month after I moved in, and sometimes twice a day on weekends. I had it all down, from the best times to go, to the best place to park. But then my house was built in 1931, and needs a lot of care.
you might also look at pergoColnagoFE
Sep 12, 2002 12:30 PM
tile can break and it's a pain to replace. pergo is kinda in-between tile and hardwood.