This is the third part of a five part series. 
Click here to read the first part, All’s Well That Ends Well, The Prelude. 
Click here to read the second part, All’s Well That Ends Well, The Process.

SHE SAYS:

Jason predicted it would take two weeks to excavate the property to prepare the pad for the foundation.  Those two weeks turned into almost three months.  Finally, the concrete started to appear and so did the preliminary liens.  Due to Joe’s background as an attorney with some experience in construction law, this sent up a red flag, but Jason assured us that these preliminary liens were only informal notices and were a standard industry practice especially in these hard economic times for builders.  Joe checked with a local attorney and was told that this was basically true.

Under our fixed price contract with Jason, we had the usual arrangement whereby we would pay him and he would then pay for all of the materials and subcontractor fees.  The contract also called for contractor fees to be paid to Jason over the course of the project.  By the fall of 2008, we started contacting some of the suppliers and subcontractors who were sending out the liens, only to discover that Jason had not paid them the money we had given him for these costs.  To compound the problem, we discovered that Jason had not set up a separate bank account for our project as is required by law and his personal bank account which contained some of the money we had paid him was frozen and seized in order to pay a previous judgment against him.

The problem had reached a critical point.   The lien holders were justifiably upset and many of the other suppliers and subcontractors were ready to leave the project since they no longer had any faith in Jason or that they would be paid.   We knew that we had to take action or our dream house would turn into a financial nightmare.

With our money gone, we had two choices.  We could start a law suit against Jason and, perhaps, even have him arrested; however, since he did not have any money we would never be able to recoup our losses.  We would also have to start over with another builder and incur many of the costs and fees again.  The alternative was to try and find a way to salvage the project.  Since there was a considerable amount of money that would have been paid to Jason as his fees under the original contract if everything had gone as planned, we felt that there may be a way out of this mess.

We had the work that had been completed inspected and it must be said that Jason proved to be a competent builder and we found him to also be very creative in matters of design.   His short fall was, primarily, that he was a young and inexperienced businessman and had overextended himself.   When things were booming he was able to keep his projects going despite his bad business practices because he was generating enough money to keep everyone at bay.  Once the economy went bust his house of cards fell apart.  Under the circumstances, we felt that the best course of action was to find a way to work with Jason as the best way to recoup our money.

Things get better in the next installment called “All’s Well That Ends Well, The Solution”.

WHAT DO YOU SAY?