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"General Contractors Gone Bad. How to Overcome the Challenge, Enjoy Your Investment!"

Make sure you do your homework when finding the right General Contractor. What can be a personal investment now can be a wise financial one in the future!

 

On Friday I had received a phone call from a plumbing subcontractor. A subcontractor that I have been dealing with for years.

While speaking with him it was brought to my attention that a homeowner was in the process of building a new construction home. During the process the General Contractor already built the structure and had many of the fundamentals completed. The only problem was that the few subcontractors had yet to be paid for the job(s) they performed.

The very next day, Glen and I met with the homeowner and found out that the GC walked out on the job. The man was extremely nice, yet he was promised to be in his home by this week. The last 3 months nothing was done and no promises were kept. That being said I took down the name of the General Contractor, spoke to a couple of subcontractors and to my surprise I found out some very interesting information.

1.  The General Contractor put his name as being in charge of all the jobs for the home being built. Which means that the title company was under the impression he was doing all the work. The checks were not cut out to the subcontractors as protocol. The General received all the money to disburse as he sought to be fit.

2.  Several subcontractors called and wanted to be paid out for the job since they completed most all the work. Usually subcontractors are paid out in the beginning to cover partial labor and materials. The GC had explained to the subcontractors (I had spoken with) that the Homeowner was being extremely hard to deal with and wanted so many extras for free and that was the reason why they were not getting paid due to the extra amenities and the main reason why he walked out on the job. 

3.  I had received the name and location of the General Contractor that was in charge of doing the work and... SURPRISE! Absolutely no listing at all on the internet of the said General Contractor that I could find anywhere in the Lake County area or surrounding.

4. The Homeowner was referred by the Reality Company to do the work for the Homeowner and existing lots that are available to build. Extremely disappointing when you trust in your Real Estate Agent and this is the kind of out come you get?

This particular situation upset me, especially working side by side with a General Contractor such as Glen Gorsline, as I assist in overlooking the jobs to completion. I felt to write this article because this is the exact reason why General Contractors are given a bad name along with negative reputation. With the list above, I would like to clarify and deliver you some information if your ever decide to remodel, build a home, or add on to your house. 

1.  A GC is to obtain permits and list ALL subcontractors that are performing the work. Especially when it goes through a title company and big payouts are given. It guarantees their payout and the money goes to them for the job. If a GC puts their name down as being in charge of everything, they get the money and the subcontractor risks getting nothing. 

2.  When a GC makes up excuses throwing the Homeowner under the bus, it's called a blame game and not taking responsibility for their mistake. When I spoke to the contractor in charge of the HVAC work and the reason I heard why he wasn't being paid, I question, what do the "extra amenities" the homeowner requests (if that is to be true) have anything to do with the actual necessity a home needs?

A home needs plumbing, heating, A/C (if you like to live in comfort... hehe) and electrical along with other things such as carpentry etc. Those were the items these hard working individuals are supposed to be paid out on no matter what the issue is with the homeowner and GC. 

3.  No matter what it is you hear from a referral... Check References! Research the company online to make sure they are who they say. Find out how long the company has been in business. See if the have a website. Not only up-to-date photos but photos that are also taken from over the years. Word of mouth goes a long way.

Testimonials are a good thing to ask the GC to produce. What affiliations is the GC associated with? It goes a long way. Stay away from "buddies" and friends of friends. Anyone who is your friend will refer another friend to do work just to get them business. Yet if they have a great name and you can check references and get the same positive results, then be my guest.

Then again, sometimes that can cause problems down the road and it may be something to think twice about. Make sure when finding a GC, ask about the longevity the subcontractors have working for them. It is very important you have a team of people that can work together well. It makes for a smooth sail when the job is being done.

After my dealing with the situation, I found the homeowner to be a down to earth individual who trusted in the General Contractor he hired. There was no difficulty or pettiness going on regarding the GC and the negative attitude the homeowner had. It was all about the excuses the GC had made to walk off the job and pocket the money leaving the client to go out on his own to find someone he can trust to making sure the job gets done.

The unfortunate thing about this entire situation is that there are great subcontractors that have almost completed their job and have not received their money for all the hard work they put into this home. With Gorsline into this project, it will be a work in progress working with the extended companies that assisted in monies to build this home to making sure we are able to come in and complete this job in making this homeowner happy and subcontractors compensated for what they have lost. I can't wait to blog about the end result

Some homeowners choose to hire subcontractors to do the job and that is another area that can be considered. At times it can be successful. Then again at times when a sub-contractor goes to do a bid, not all sub contractors figure in what needs to be done yet they forget to add certain odds and ends which in turn can boost up the cost to what you "the homeowner" thought was a reasonable bid. Then who takes the hit? The homeowner.

When signing any proposal, make sure that it is clarified it is the responsibility of the contractor to take the hit of the work that was missed if it was included in the bid and not figured into the signed off proposal. That can also be a conflict down the road. Things need to be done carefully if you are in charge of your own job(s) with all T's crossed and I's dotted.

Many Homeowners find that a GC can be a tad higher in price than having to do the job on their own or many subcontractors involved to be in charge. But when we look at the big picture, in the long run it actually is a money saver and the job done at hand will be a "job done right". When a GC comes a bit higher on their proposal, keep in mind that the GC is running the entire job for you, the homeowner.

It creates less stress, and the GC is able to make sure that the subcontractors are doing things in a timely fashion. A GC obtains all permits, schedules the tasks in order of and if any bumps are in the road, the homeowner is not part of the picture to deal with the burden. The GC is in charge of the process. In addition, when a GC proposes a job and a homeowner signs off on the proposal, and the General Contractor has already figured in the amount including the materials and labor for the job that needs to be done, the GC is the one who takes the hit on the error that was made if the proposal was signed and a dollar amount for the project was missed. Less hassle for the homeowner. Again, the General Contractor responsibility.

When a General Contractor as I mentioned above complains they can't pay a subcontractor for work they have already completed, or near to completion and comes up with excuses that "the homeowner wanted extras", that is where change orders come in to play and revisions are made with the subcontractor to perform the extra work. Not the existing work that was already proposed and signed off. I can't stress that anymore than I already have.

Please feel free to contact us at, 847-362-1732 if you should have any questions or feel free to leave a comment.

Here is an article I came across that was similar to some of the things I mentioned and other tips to think about before taking that big step... ENJOY! 
http://www.nytimes.com/2011/06/18/your-money/18shortcuts.html?pagewanted=all


Kimberly Potokar

Project Management

Gorsline Development LLC.

This post is contributed by a community member. The views expressed in this blog are those of the author and do not necessarily reflect those of Patch Media Corporation. Everyone is welcome to submit a post to Patch. If you'd like to post a blog, go here to get started.

Dorothy Satti June 28, 2012 at 04:03 PM
Thank you for posting this....unfortunately this happened to our family in 2009 and we still have a home that is gutted....we are trying to find some relief through the state of Ct fund that will potentially reimburse us for some of work that had not been completed BUT that is only due to the fact that we have 15 contracts....specific to each job. It should be criminal...
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