What would you guys do??????

Hello –

So we finished building our house in July of 2007. During the building process our “general contractor” paid all of his sub-contractors so we as the homeowner didn’t handle any of the money. All went fine and a month after we closed we got a call from our builder/general contractor. He said I forgot to pay the flooring company – $5100. I said that’s not good. So I looked through all the paperwork and there are no records of the flooring company being paid. So I told the contractor that it’s his mistake and we don’t have that cash on hand right now. If you would have paid the flooring comapny it would have been in the mortgage like it was suppose to. So life went on. We get a letter from the flooring company about 2 months after that. So I write a letter to the flooring company saying look at your invoice. It said SOLD TO: General Contractor’s Name(I won’t reveal the name on here). He was in charge of paying all of the Sub-contractors and therefore you should go after him. So after writing a letter I did not hear anything until today. The flooring company went out of business and now I am getting a letter from the Vice President of a bank. I am pretty sure it’s the bank that was involved with the flooring company financially. So they are requesting I make full payment by April 11, 2011. If payment is not received the bank may start legal collections actions without any further notices. One such action may include a lawsuit for money judgement in District Court or Small Claims Conciliation Court. It would be the bank’s intent to add all the legal and collection costs to the claim for money judgment. So on that note I know they are trying to scare me but I won’t go down without a fight because I don’t feel obligated to pay it because it was all the general contractors fault. FYI – The flooring company never put a lien on our house and it’s too late for that too happen. What would you guys do? Does anyone know of any good attorney’s? Thanks in advance.

Chad

Give the guy at the bank the GC’s name, address, phone #’s,
and a copy of the invoice with the GC’s name on it.

Then go fishing and forget about it!

that’s no good! hope some1 helps u out

GET A LAWYER SON………………….

Yes, I want to get a lawyer BUT what’s the cost of a lawyer compared to if I just had to pay the bill???? Does anyone have a good lawyer in Wright or Meeker County Minnesota?
Thanks,

Chad

Call the Minnesota Department of Labor and Industry, Construction Codes and Licensing Division, and ask to speak with a Residential Contractor Licensing Investigator. They should be able to provide you with some good/free direction on this one.

I would tell the bank that you can work it out by giving him the GC info and move on, or you will be forced to get a lawyer and they can figure out how to pay him!

Sometimes a nasty letter from a lawyer is all it takes and it can’t be that expensive, I suggest you research some legal counsel in your area and make a phone call and explain your situation…..

Was the construction loan in your name or the GC?? if it was in yours you will end up paying! if it was in his then you will not! I’m hoping it was in his! this means it wasn’t your house until closing! if it was yours then it is your responsibility to make sure things are payed for!

Just saying!

i had a very similar problem with a remodel company and i called the attorney general exsplained my situation gave him some contact #’s and he took it from there, i got a letter about a month later from the construction company saying that i owed them nothing and that they would take care of my credit report (because it was showing on there as a loan not paid) all is good now.

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…………. The flooring company went out of business and now I am getting a letter from the Vice President of a bank. I am pretty sure it’s the bank that was involved with the flooring company financially. So they are requesting I make full payment by April 11, 2011. If payment is not received the bank may start legal collections actions without any further notices. One such action may include a lawsuit for money judgement in District Court or Small Claims Conciliation Court. It would be the bank’s intent to add all the legal and

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The wording you use. You’re “pretty sure” it was whoever’s bank or lawyer or they try to look like lawyers could be important. Threatening “possible” legal action and that crap. That is what junk debt collectors do.

I agree with others, call a Lawyer and the Attorney General’s office. I suspect it will cost you some time if nothing else.

Just another take. While it was absolutly his fault for not taking care of the flooring subcontractor, you still got the flooring. After the close of the house it makes it very difficult to come up with the $5100.00. Perhaps you might work out a deal with the general contractor and each pay half. If he is a reasonable contractor this would be more than fair for his
mistake. Plus you will get the flooring that is technically yours for half price. Just one thought. If he agrees it may save lawyer fees and alot of headache.

First, I would request that the “vice president” of the bank send you verification of their institution and professional identity. Make sure its not a scam. To me, it sounds odd that (1) any banking institution would demand payment w/o any type of previous contact from you on such short notice, (2) a vice president of any bank would take the time to draft a letter for a $5100 debt (that’s small change for a bank VP to deal with), and (3) they would wait two years to do it.

I listen to a money show (Dave Ramsey) on our local AM talk station. One issue comes up often is about the collection of outstanding debt by collection agencies. These people are ruthless. They have few rules (that they follow) on how to conduct their business, often misrepresent themselves, and even threaten the people they are contacting. One of my coworkers was being harassed by one of these gems at his work number-over a $4 charge his ex-wife didn’t pay. When he told them to pound sand they started calling his supervisor…

My suspicion is that the unpaid bill was not settled between the contractor and the flooring company, and may have even been sent to collections by the flooring company at some point. When the flooring company folded up and the assets were sold off, the unpaid debt was sold to a collections company in the process. Now the collections company is coming after you because your name is also associated with the debt. They don’t care who pays the debt, they bought it and have the means to try to collect on it. The person at the collections company misrepresented themselves as the VP of a bank (sounds powerful) to scare you and try to get you to cut them a check. I hope you have the invoice from the flooring company stating that the flooring was sold to the GC, then this should be a non-issue. Unfortunately, they have the power to damage your credit (I would check your credit ASAP), and they will probably not stop until they are paid or are threatened with legal action because you are not the responsible party.

I would identify the person who sent the letter first. A real VP of a bank would not hesitate to send you some verification. If it is a collection agency, you may want to explore some of the other methods mentioned above. A lawyer might be the best route but would be expensive, especially if you still would up having to pay the bill.

One other thing to consider is that you do have a floor you technically didn’t pay for (even if it wasn’t your fault). If your kid found a wallet containing $5100 laying on the sidewalk, what would you tell them to do with it. Try to find the owner or just take the cash?

Good luck.

http://www.ftc.gov/bcp/edu/pubs/consumer/credit/cre27.pdf

FDCPA
You need to read this first so if it is a debt collector you know how to protect yourself

I would definetely talk to a lawyer. You can usually get the first meeting for free and end up with some advice. Lawyers don’t want to take a case they will lose, it doesn’t look good for them. There is alot of questions with what is going on and in my opinion the GC should take responsibility for his screw up, but that is another issue. Just my perspective from the construction field. Good luck and I hope it works out in your favor without to much hassle.

Get a lawyer but make sure he is one that deals with this type of stuff. If you need I can get you the number of a guy I use out of Rochester.

Would think you are off the hook if no pre lien notice was given to you or your general contractor by the sub contractor. Your General contractor was your agent in these dealings with the subs. Part of what he should of done was to get lien waivers from all of the subs and the end of construction. I would think this is something your mortgage company should of wanted to see to. Sometimes its on the estimate or invoice. They have a limited time to provide you with this. 10 days from the start of work sticks in my head for some reason.

$5100 is a big deal to a bank. They will come after you full bore over $5. They dont care about you, your credit or your reputation. They want the money. They also dont care if they have rights to the money or not. If they think they can get it they will try.

My thought is this is a scare tactic to try and get you to pay Let the lawyer handle it. If you are not responsible for the bill he will most likely draft up a threating letter to send back to them basically calling their bluff. If you are responsible for the bill you will also want a attorney on your side so you dont get taken to the cleaners.

My guess on attorney fees would be starting in the $200 to $300 range and possibly go up from there on what he finds after review. It sucks to even be out that amount but thats life.

Let me know if you want my attorneys number. The 1st phone call is free.

You can attempt to get a ‘pre-paid lawyer’. It’s inexpensive to start, like $20 a month, and it gets you all the sound legal advice you’ll need. Action in courts will require more..but to start it sure does help.
Get a different bank account, and transfer all the cash to it, this is in case they try a right to cure on your account. Good luck.

Your in a position here where you say no lien has been filed. BELIEVE ME SOMEONE AT SOME POINT WILL FILE A LIEN! So down the road when you try to sell it will have to be delt with. Now with a GC and a bank involved as most here suggested get a attorny to help you clear this up now so your credit is not hurt or ruined and also make them run a title search WHEN all this is cleared up to make sure there are no out standing liens. We see this all the time in real estate transactions, I’m dealing with one right now that the bill was paid (we have proof) and even the biller has said paid in full but the lien was never released so guess what, we are not clossing on the home untill we get a release. Make sense? Take care of it now up front and good luck.

Who ever has the flooring, YOU, owes the money. Now how you pay it is a whole different story. Sure the GC screwed up but you still have the flooring. Maybe a payment plan to the GN or the flooring company/bank/collection agency…. who ever owns the debt at this point. How much is your personal integrity worth? Is this a lesson you will want to teach your children or tell your Parents or Grandparents about? Just saying…

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Who ever has the flooring, YOU, owes the money. Now how you pay it is a whole different story. Sure the GC screwed up but you still have the flooring. Maybe a payment plan to the GN or the flooring company/bank/collection agency…. who ever owns the debt at this point. How much is your personal integrity worth? Is this a lesson you will want to teach your children or tell your Parents or Grandparents about? Just saying…

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Stinky Cat – Yes, we do have the flooring but our GC was given a little over $200,000 to pay all of the subs. He said everyone was paid, signed the sworn construction statement which allowed us to close on the house. I feel he should have some responsibility since he is the one WE hired to do a professional job. The flooring materials and labor was sold to him under his business name….just like it says on the invoice. So I don’t believe I am responsible for 100% of this problem. Thanks.

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Who ever has the flooring, YOU, owes the money. Now how you pay it is a whole different story. Sure the GC screwed up but you still have the flooring. Maybe a payment plan to the GN or the flooring company/bank/collection agency…. who ever owns the debt at this point. How much is your personal integrity worth? Is this a lesson you will want to teach your children or tell your Parents or Grandparents about? Just saying…

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If this was dealing directly with the flooring company and the GC had not received the money to pay them I would agree with this. Chad stated the flooring company is out of business and the GC had received the money to pay the subs.

As far as owing the bank money forget it. If that bank had found a error from 2 years ago that they owed Chad 5K do you think they would be chasing him down to pay it. Not a chance. Is the hard working guys at the Flooring company going to see any of this money. I would bet not to.

question–did you have a contract with the gc???if so it was probably a turn key situation where if you had one he is totally responsible for paying all bills prior to closeing and your lender should have requested signed lien waviers from him before they gave you the loan–good luck

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Just another take. While it was absolutly his fault for not taking care of the flooring subcontractor, you still got the flooring. After the close of the house it makes it very difficult to come up with the $5100.00. Perhaps you might work out a deal with the general contractor and each pay half. If he is a reasonable contractor this would be more than fair for his
mistake. Plus you will get the flooring that is technically yours for half price. Just one thought. If he agrees it may save lawyer fees and alot of headache.

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Ditto… a mistake was made, it happens. I would try to work it out at 50/50..either way, you were the winner. We kinda ran into this when we bought our house, the owners said the “owned” the water treatment system, they did not, so we ended up splitting the cost to purchase it. Technically, it was all their baby, but I am a reasonable person, to a point That was close to $4000, we split.

If the bank does file a lien with out the rights to it I believe you can come back with slander on the title or something like that. What stinks there is even if you are in the right it will only cost time and money to straighten it out. If this happen you may also have a right to get your legal fees covered. This is all just another reason to get a attorney that knows what to do with this. One thing I like with mine is the peace of mind that someone is handling issues like this with some knowledge of what they are doing.

Ill send you over his number later today.

I want to start this off by saying I am a General Contractor.

When you signed a contract with the GC, what was it for. A guarantee cost, a cost plus mark ups, or something else. Most of these contracts are written to protect the GC. If it is a cost plus contract, I think you are on the hook for this cost. If it is something else, you may have an out.

Take a look at the final payment application.
1. Does he have a breakout of costs that includes flooring?
2. Does it have a full and final payment noted?
3. Does it have a lien release stating the GC has paid all the subcontractors and is responsible to pay all subcontractors?

These will give you a good idea of where you will sit legally with the GC.

There is a reason that good GCs make the money they make. IMHO, it is worth a premium to have good guys work on your project. There are a large number of people in the construction industry who are GREAT builders, but horrible contractors, meaning that they can pound nails with the best of them, but could not fight their way out of a wet bag with business sense. Not saying this was your guy, but he obviously screwed up.

I recently paid off a supplier to a subcontractor who had signed a lien waiver showing they had paid all their subcontractors because I felt it was the right thing to do for my customer. I had all legal rights to dismiss it, and let the supplier fight for payment, but that was not the right thing to do.

Sorry, I am not trying to put you or your GC down, just my $.02.

Farmboy has it right. It comes down to whether your contract was cost+ or for a fixed price. In the first case, I would feel obligated to make it right since this would mean that I had flooring installed that I truthfully had not paid for. In the latter, the flooring would have been in the estimate and the GC would have pocketed the cash (but obviously, a fixed price means his return depended on how well he managed his costs).

Your statement doesn’t give any clear indication which way the contract was written…

“Yes, we do have the flooring but our GC was given a little over $200,000 to pay all of the subs. He said everyone was paid, signed the sworn construction statement which allowed us to close on the house.”

I normally don’t post in these kinds of threads, but I have to agree with this statement. I don’t want to sound judgemental, but I wouldn’t be comfortable knowing I had the flooring and never paid for it, because in the end, someone is out the money. I would try to set up an installment plan or something of that nature if you don’t have the cash. I feel sorry for the flooring company who went out of business and their employees who lost their jobs.

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Who ever has the flooring, YOU, owes the money. Now how you pay it is a whole different story. Sure the GC screwed up but you still have the flooring. Maybe a payment plan to the GN or the flooring company/bank/collection agency…. who ever owns the debt at this point. How much is your personal integrity worth? Is this a lesson you will want to teach your children or tell your Parents or Grandparents about? Just saying…

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Under the State of Mn, more specifically Dept of Labor and Industry; each contractor is to be licensed and carry a surety bond for instances such as this. My Bond for my industry is $20K. I would call the State to verify if the contractor was licensed at time of work being done. Go after the surety bond.

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Under the State of Mn, more specifically Dept of Labor and Industry; each contractor is to be licensed and carry a surety bond for instances such as this. My Bond for my industry is $20K. I would call the State to verify if the contractor was licensed at time of work being done. Go after the surety bond.

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I was thinking along those lines with some sort of E & O insurance like realtors should carry.

We all know the GC continued to get invoices for this job
so I think he should have been more proactive to reach a resolution with Chad, about 4 years ago.

You would think he would want to maintain his integrity and credit rating as well.

Is the GC still in business?