Sorry, but I hired a BUM. Now what ? This is such a common question throughout the country as owners attempt to manage their own relationships with builders. You can thank the DIY movement for a lot of these headaches.
It is difficult for me to respond to this question without sounding like the typical old man. I literally have this question voiced to me from owners, sisters, brothers, fathers, etc. This is a very common, and difficult question to answer, because the real answer is, you hired the builder, not me. You have been instilled with the opinion that this is all an easy task and anyone can build. That is probably the fundamental attitude you had, when you hired the contractor, who you now identify as the BUM!
I understand that typical home owners, or future home owners, do not have the experience, nor the expertise within the industry to make the best decisions. Unfortunately, the current attitude among many individuals, is one of arrogance, regarding the construction marketplace. There are many individuals that feel they can perform the work as well as any builder, they just don’t have the time. I have heard the comments, if I could take a few months off, I’d do it myself. If I was retired I’d have no problem getting this done, when this is the attitude, watch out. Unfortunately for the competent and experienced builders in the industry, this attitude of self reliance and self appreciation, which builds into an attitude that is arrogant and overly self confident, is the attitude, that will cause an owner to hire the BUM, and then ask the question, now what?
What are the common denominators that cause this situation.
1.) The first and most devastating leveraging point, is MONEY. Money is the motivation for hiring the BUM. For some reason the construction industry thinks so little of itself, that it allows the BUMs of society to call themselves builders. If the price appears to good to be true, it is! The influence of money is a cliché for the majority of life’s issues and problems. However, in construction the allure of saving money is a powerful drug that will cause hardship in the future.
2.) The second most common factor in the hiring the BUM, is the ability for individuals to sound and talk, the part. The fast talkers, the political savvy, the overly self important individuals, make the best candidates for the BUM category. For many individuals to talk construction and to perform construction are two very different things. There are many individuals who can talk the walk, but can’t take the walk. You want the doer not the talker, however, initially, the talker will obtain the job.
3.) The third situation is the insistence on many owner’s part, to hire a family member or a friend. I have witnessed disasters due to the hiring of brother in law’s, or my sister’s cousin, etc. You should never mix business with pleasure and or family! This is especially important in the construction business and should be adhered to, no matter how convincing the family member is.
Prior to the selection of a contractor for your project, the following should be done.
1.) At least ( 3 ) contractors should be finally, selected to bid the project, or discuss the project with you. These ( 3 ) contractors should be selected from a number of possible contractors. Each contractor selected should be given an interview, that is based upon the resume of the builder. Insist on a project list of completed jobs, a resume of the individual that will be the project manager on your job, as well as a reference list. Once these documents are reviewed and analyzed, based upon the result, make an educated and intelligent decision, regarding which of the contractors should be asked to present a proposal.
2.) Formally present your project to each of the ( 3 ) selected contractors. This can be done by accumulating the sketches, documents, written scope of work, or whatever hard copies of the project, that best describes the scope of work. Provide these documents to the contractors for their review. If the documents are complete and detailed, they may be adequate for the contractors to actually price the project. If this is the case, excellent, you can now require a written proposal for your project.
3.) Review the proposals for the project in terms of price, time duration and scope of work. It is so important that similar scopes of work be presented and priced by the contractors. If the scope of work is not consistent for all the bidders, the proposals will not provide the financial information necessary to make an intelligent selection. Try to develop a leveling sheet that will assist you in selecting the proper contractor. A leveling sheet can be done on an excel spreadsheet by listing the scope of required work down the page, and identifying the pricing across the page for each contractor. If a contractor does not have a specific scope of work, then plug in a value for this work, to allow an even and balanced evaluation of the contractors bidding the project.
4.) If the documents are not adequate for a review of similar scoped proposals, then each contractor should be granted an interview. During this interview the following questions should be asked. These same questions should also be asked of a low bidder, if the project was hard bid.
a.) How long have you been in business ?
b.) How many employees do you employ ?
c.) What is your anticipated time frame for the project ?
d.) Is it possible to obtain a not to exceed value for the work?
e.) Can you provide a list of references that can be contacted?
f.) Can you provide a list of recently completed projects?
Each contractor should be able to answer these ( 6 ) questions without hesitation. If there is a reason that the contractor cannot adequately answer these simple questions, a flag should be raised.
Once this procedure is completed, the owner needs to make a decision regarding the contractor. I would recommend that the decision be based on the following parameters, listed in the order of importance.
1.) What the references said about each of the contractors
2.) The list of completed projects
3.) The resume of the individual that will be directly involved with the management of the project.
4.) The anticipated schedule time for the project to be completed.
5.) The price.
If the homeowner would follow this basic procedure, the question of , I hired a BUM, now what, in most situations would not be an issue.
OK, you didn’t do it this way. Even though I tried to instruct you. Shame on you! Now the question of, I hired a BUM. Now what? becomes very pertinent.
The remainder of this discussion will center on the situation, that, yes, you hired a BUM, and this is how you should handle it. This is a very serious situation and can cause extreme financial hardship as well as personal situations amongst family members. I have been involved with situations, such as this, that have caused marriages to fail and other personal problems.
The following identification or qualifications, of the BUM, when it comes to builders, can be predicted, and is based upon the following;
a.) The builder immediately needs a substantial down-payment prior to starting. You have requested a list of items that will be purchased with the down payment, you have not received it, or you have made calls to these suppliers and they have no clue what you are talking about.
b.) The builder has difficulties providing a formal certificate of insurance.
c.) The builder has difficulties actually signing the contract, or even providing a formal proposal.
d.) The builder has invoiced an amount of money on the first requisition or bill, that does not appear to have any relationship with the work completed.
e.) Suppliers and subcontractors are contacting you, as the owner, due to lack of payment from the contractor.
f.) The manpower on the project falls away as the project moves along.
g.) Additional work requests become common place, the contractor is insisting on payment of these additional work requests, prior to performing the work.
h.) It will become obvious that the contractor is having financial issues. Manpower will be reduced on the site, deliveries will stop, and the contractor will be more insistent on immediate payments and will attempt to overbill on each invoice.
OK, based upon these situations, you have decided that you fall into the category of , Yes I hired a Bum!
The NOW WHAT – part of the issue comes into play.
The NOW WHAT, is the part of the problem that will determine how much money will be lost, if there will be lawsuits, and finally, when the project will be completed. The following steps should be taken.
1.) Financially evaluate where you are on the project. Unfortunately this is the most difficult and stressful part of the process. How much money has been provided to the BUM verses how much work has been completed. Once the financial analysis is made, the amount of work completed, and yet to be done, is evaluated, reality must be faced. Do you have enough money left to finish the project. Unfortunately the answer is almost, 100% of the time, NO. The next feeling of stress and conflict is how do we finish this project, we are out of money!
2.) Once you have established the financial impact of hiring the BUM you have to consider how to cut your losses. The evaluation of the money will give you the foundation for how you are to attempt this termination.
3.) Stop the work. This is essential, do not let the work bleed. If the BUM is any type of an intelligent BUM, they will understand, that the more areas of the project they can touch and cause turmoil on, the more difficult it is for the owner to terminate the BUM. Termination is must be pursued by the owner, sooner than later, and it is always better for the owner to do it NOW.
4.) By allowing the work to bleed on, due to indecision, the BUM will have the opportunity to touch more of the scope of work. The more they touch, the more involved the procedure will become to terminate them. Do not allow the BUM to bleed you dry on the project.
5.) It is always better to contact a professional construction lawyer, prior to issuing the termination letter. There are specific phrases and wording that should be used to legally identify the issues relating to the termination. This will be money well spent. The attempt by any homeowner to terminate a contractor, in a legal and knowledgeable manner, without professional help, is usually not a good idea. Even if the homeowner is in the legal profession, unless a construction lawyer, I would suggest the use of a professional.
6.) Once the termination letter is issued, legal notice must be given to the BUM to instruct them to leave the project. A specific time must be designated to allow the BUM to collect all equipment on the project. All material must remain on the jobsite, unless other negotiations have allowed the removal of material. Normally, if it is on the project, it is considered the owners property, not the contractor.
7.) At this point in time, relations between the owner and the BUM will have broken down to such an extent that threats, intimidation and other types of conflict can be anticipated. If the BUM is truly the BUM that has been conveyed, then the situation will become uncomfortable and it is strongly suggested that a construction lawyer be involved.
This scenario of eliminating the BUM from the project, by termination is the final move by the owner. I would suggest that all attempts at reconciliation with the BUM be made prior to the actual termination. Reconciliation would reduce both financial hardship on the owner, as well as legal and physiological ramifications for all parties. The act of termination of a contractor will be a major milestone in the owner’s life, and can cause anxiety as well as family turmoil.
Based upon the severity of terminating the BUM from the project, there are a few alternatives that could be tested, prior to the formal termination, to see if a mutually beneficial resolution of the situation can be negotiated.
1.) Schedule a meeting with the contractor, who hopefully has not turned officially into a full BUM, as of yet . Notify the contractor what the meeting is about, and the issues of concern that you have. If your financial strength can afford a construction lawyer at this time, one would be suggested. There is nothing better, to add to the strength of the owner, than a knowledgeable legal advisor. During this meeting discuss the following:
a.) Your financial concerns, you have given the contractor money and the return has not been satisfactory. Do not be intimidated, and clearly indicate that you feel the work has not justified the payments.
b.) Express your concerns for lack of manpower, lack of deliveries, and if you have been contacted by suppliers, discuss the communication at the meeting.
c.) If the contractor has not provided the proper insurance certificates, signed contracts, lien waivers, etc. they must be brought up to date, and be complete prior to a return to the project.
d.) Suggest the contractor take out a performance and payment bond for the work that remains. If the contractor refuses, this is a good indication that the contactor has no intention of finishing.
e.) Allow the contractor to respond. If the contractor is willing to work with you, indicate that you will not accept additional billing, until adequate work is observed, and additional work orders will be eliminated. The contractor must man the project, continue to have material deliveries to the project, and most importantly, wait for two months before submitting another invoice. If these parameters are agreed to, you will reconsider the termination. Of course, chances are, if the contractor is truly the BUM they appeared to be, then they will not agree to any of this.
If upon having the meeting, trying to reconcile the issues and offering to allow the contractor to continue, the BUM refuses, this will be more information that you can use for the pending lawsuit against the company.
At this point, the project has been stopped, the contractor terminated, and their equipment has legally been removed from the project. Now it is time to orchestrate the legal claim against the contractor. Obviously the help of a professional construction lawyer or consultant is definitely recommended at this time. The owner has the right to sue the contractor for breach of contract. This breach of contract is contingent upon the fact that the contractor has signed the contract provided to him by the owner. There is a legal basis, that once money has exchanged hands, there is a binding obligation by the contractor to the owner, however, what is the scope of the work? The contractor will claim, the money represents the work they have already completed, the owner will claim the opposite. This scenario becomes a difficult legal issue. Without a signed contract, everything becomes more difficult.
Unfortunately the owner is now without a contractor, without a completed project, probably out considerable money, and with a high stress level, due to all the issues concerning this construction project.
This is the reason I have tried to reiterate, over and over on this website, that a legitimate and formal agreement, with a competent, knowledgeable and experienced contractor is the preferred method of completing a construction project. I have battled the low cost, politically connected, the good talker contractors over and over again. Please, it is much better to spend a little more money in the selection of the contractor, as well as perform the due diligence required to investigate the reputation and the experience of your contractor. Money is NOT the key element of the relationship. The experience, reputation and skill level of your contractor is what is important.
I often use the analogy that no one will replace their roof until the water penetrates inside. Do not allow the water to penetrate, prepare for it, and circumvent the problems. A roof, like a contractual relationship, is easily understood and evaluated. The negatives are clearly identified, do not ignore them. So many times, a client will indicate that they had a feeling, others told them to be careful, they shouldn’t have believed the cost was so cheap, etc. Do not believe that a construction project will be an easy venture for the homeowner. However, the incorrect selection of the wrong contractor, will cause extreme negative hardship and you will constantly look back and wish you had reconsidered.
The selection of the BUM contractor is NOT the fault of the BUM contractor, it is the fault of the owner or whoever was the entity that made the decision to hire the BUM contractor. I have been involved, and am still involved, with the same BUM’s over and over again, that have caused our construction industry to gain such a terrible reputation. There are numerous companies that refer to themselves as construction companies, that exist to take advantage of the uneducated public. The DIY identification has supported their ability to lie and steal from the public by the imaginary simplicity of the DIY mentality. To build something takes talent, experience and knowledge. It does not take good looks, a quick tongue and several takes to get it right!
You hired the BUM, not me, and you will have to live with the ramifications. This website can resolve issues and can guide you, relative to how to deal with construction issues. This website cannot make you any less greedy or any less arrogant. What this website can do is inform you regarding the several issues that can and will take place, if you hire the BUM. Unfortunately the BUM has the allure of saving money and in most cases, convincing you the purchaser, that everyone else is out to take advantage of you.
To be a professional contractor or house builder takes years of experience, knowledge, mistakes and lessons, taught by the school of hard knocks. Find a contractor that fits these parameters, and you will not hire a BUM, but a professional that is interested in a great project as well as a continued client. Yes, you will have issues, there will be additional costs and probably the project will take longer than originally expected, but you will look back at the experience, and in most cases, even decide to perform another project, hopefully with YOUR BUILDER AND NOT YOUR BUM!