Shocked about Contractor bill! Is this even legal?

I'm really upset now. We recently had a major renovation and we did not like the contractor. They were terrible communicators. The work turned out nice so I was at least happy with that. At the beginning of the project they gave us a very detailed itemized list of the price. It was around $50,000. We had paid everything off and only had a final bill with just a few odds and ends and some (overdue on their part) change orders. Well, to our shock and horror, the final bill was not just a few hundred dollars, but over $20,000!!!!! $10,000 was due to "Charge: Project management overages due to client change order

variances (per contract)." Another $5000 was "Charge: Design overages due to client change order variances (per contract)." Nothing was ever said about any of this previously! The designer did virtually nothing! Initially the design was to cost under $1000, and supposedly she did an extra $5000 worth of work?! The design process was at the very beginning, which was last summer, so why are we only being told about this now? I am just shocked and appalled and feel the entire holidays are ruined. Now I will have to spend hours and hours pouring over the contract, composing emails demanding they give us an itemized list of their work with dates and hours, etc. I don't have the time or the financial budget for this!

How is this acceptable?!??! Surely it is NOT acceptable!?! I just can't believe I would actually be expected to pay for this!! Also, they happened to send two change orders with more info. Just from that I can see errors, like they charged us for something that the electrician also charged us for -- why are we being double billed? How many other instances are we being double billed? Just so upset and don't know how to deal with this now! I'm trying to get ready to host for the holidays, and then my husband and I were supposed to go on our first little mini-holiday without the baby (almost 1 year old), but how can I do any of this with an unfair $20K bill hanging over my head?!!

Any suggestions or thoughts about this? Please help!

Please get a lawyer, one who specializes in contract law.

They can't expect you to pay for something you didn't approve or authorize. So I'd be reading through the quotes and contract you signed, as well as any other written correspondence that you exchanged with the contractor.

Although you're crunched for time, there really is no other option other than you sorting through the paper work, or hiring a lawyer to do so.

Once you have your ducks in a row, I'd be writing a letter explaining what you believe you're required to pay, or you might want to meet with a lawyer first and have them review the info and draft a letter.

If you meet with a lawyer, please have all of your paperwork as organized as possible. The more organized it is for the lawyer to understand, the less money you'll be charged. I always find chronologies to be helpful, with a brief summary, in writing, of what occurred. The contract, emails, quotes, etc., can be attached to the chronology.

Example -

"1. April 10th, 2017 - signed contract with contractor to renovate kitchen. Attached as Appendix A is a copy of the contract, with approved quotes.

2. June 16, 2017 - approved quote for reno of downstairs bathroom in amount of $2,000.00. Attached as Appendix B is copy of quote and email authorizing same."

Have you had any discussions with the contractor since you received the final bill? If so, what did they say?

And definitely review quotes/bills with a fine tooth comb. I have seen instances where a contractor has double-billed.

The bill is very vague. All it says for that $15K is what I quoted above. It's impossible to figure out anything from that crap. These people are insane. Also, for design work, I had told the contractor and project manager to take down a huge pipe. However, they never told the designer about that, so she did her design work basing it on the pipe being there. When we got the designs, we brought up the fact that the pipe was in all the designs. She re-did them without the pipe. I'm wondering if that's where they have the gall to charge us an extra $5000 (whereas her original pipe designs were under $1000). All the design overages were THEIR fault for not communicating to THEIR designer what we had wanted! . But this is all so vague and based on verbal meetings (they always wanted to meet in person rather than through email, and now I can see why -- so they aren't held accountable).

No discussions with the contractor since we got the final bill. Hadn't heard anything from them in several weeks. Then suddenly got this email that just had the attached invoice with no explanation.

Here is my advise with this; mind you I do contractual work in web/IT but it's all the same in some ways (and if it helps I also do a little bit of my own home renovating work). To quote Star Trek; a contract is a contract is a contract. All of us have fine print to not be taken advantage of. But when a job is quoted, a contractor should do their best to abide by that, and give the client(s) an advanced notice of anything that will cost extra, or if they feel some of the work is going outside of the bounds of the job. It sounds like that was never done from their end. It is abuse of power and contract to not notify a customer if they feel things are getting outside of the bounds of a contract or there has to be additional cost to things.

Now, I don't know the full backstory here, nor am I lawyer. But from everything you have posted here and in your replies, it sounds like these people are trying to take advantage over you. "Charge: Design overages due to client change order variances (per contract)." Design overages? Those two words together like that don't even make sense. You can't have an overage in design. You can have additional designs. You can have a change in design. But you can't have "overages". That would be like me charging someone "coding overages". I had to write more code than I thought, here's an updated bill! It's not right. It sounds like they are using fancy lingo to get you to shell out extra cash for no reason. An honest days work is an honest days work, but you don't take advantage of people that way.

What I would suggest; make backups of everything. Prepare your ammunition; backup and make copies of all receipts, conversations, transactions, payments, phone calls etc. Next, confront the contractors. They gave you, in your words, a "detailed itemized list" of what this job would entail. I would stick it in their face; tell them you are only paying what was originally quoted, and if they expect you to pay thousands of dollars more for work you didn't sign off on, you will be calling a lawyer. They may cave in and agree (especially if they are in the wrong). But if they fight you over it, call a lawyer. I wouldn't pay them a nickel for any of that extra costs if it wasn't called for.

Like I said, ammunition. If this goes to court, you wanna have documentation of everything, as well as photos/evidence of all the work that they did (or didn't) do. Based off everything you posted, it sounds like a court would rule in your favor. If they never gave you documentation and advanced notice of that updated cost at all, they can't expect you to pay that.

Good news is, this isn't money you're trying to get back that you've paid already.

If contractor wants to be paid, he/she owes you an itemized invoice rather than a summarized statement, so I'd ask for that without saying a word about anything else. Otherwise, you'll just create an adversary before getting the information you need.

Review the details, and then you can dispute any charges that you view as padding rather than provable charges. Make your request in writing so that you can use the request to defend your position should the contractor not provide the detailed invoice.

Public service announcement to anyone looking to hire a contractor: If you're going in without a signed and agreed upon GMP, read that baby over 10 times and with 4 sets of eyes. Better yet, if you're talking several thousands of dollars, it'd worth it to even pay a contract lawyer his hourly rate to give it a looking over for you.

Speaking generally and not specifically to your unknown circumstances, it is absolutely legal in many situations. The terms of the contract(s) are extremely important, especially the more hands you start bringing in (such as a third party designer). Truth be told, neither the designer nor the general contractor are going to give your bank account much thought. If there are terms in the contract that spell out exorbitant fees and grants any amount of autonomy to navigate them without your direct consent (typically the designer if you're having them work directly with the contractor), they'll assume you're able to pay, even if not happily, and just do it. It's a big, big reason to avoid single large-scale renovations that you can't be relatively hands on with the decision making process for. And even then.

But, again, I'm not saying that's the case for you, but it is a pretty typical scenario, again, particularly when you're getting into larger works. By all means, I'd get in touch with a lawyer who can look over the itemized lists and the contract itself. My bet is that even if it turns out they played it 100% by the book, they'd greatly prefer to avoid litigation and may cut you some slack on some of the fees.

Sorry you were hit with something like this and so close to the holidays. Don't lose hope. Best of luck.

variances (per contract)." Another $5000 was "Charge: Design overages due to client change order variances (per contract)." Nothing was ever said about any of this previously! !

They are entitled to charge for design changes but it needs to be stated in the original contract (that you agreed to) with an outline of the costs for variances.

If they were doing their job right, they should have had you signing off on every change and add'l costs all along the way.

Not bounce you with an exurbanite bill that you can't decode.

Outside of aggravating you, they just set themselves up for a contentious relationship and are at risk of not getting paid.

It's a bad way to run a business.

I think you might agree they are entitled to something, but the final cost is negotiable. . or debatable, depending on the tone.

Unfortunately, yes it means you have to do some forensic accounting. They in turn will need to itemize and justify their costs.

Sorry. . .It is a lousy time of year to do this. How about you set aside until the first of the year?

(when I was married, my ex was a gc on the side and my current job, I am a project mgr)

Complain with detailed documentation to the BBB, your state and local attorney's office. Research them through court records and consumer complaint boards. Pay only the agreed upon amount. Do not withhold that portion.

Complain with detailed documentation to the BBB, your state and local attorney's office. Research them through court record and consumer complaint boards. Pay only the agreed upon amount. Do not withhold that portion.

There are no BBB police. It's an antiquated social media platform for complaints. It works if anyone goes there to read it.

For the matter, use Yelp. It's more current and has an audience.

I am not sure why or if BBB is even still around.

It sounds like you may have made more changes to the original plan than you are really indicating.

Everyone I know in contracting says changes are their bread and butter. Low ball the bid, jack up the changes charges, and make your money.

They don’t have to get you to sign off on change prices - especially if it’s not specifically stated to do so in the contract. You should’ve been proactive and ask about the price of the changes.

I agree, tell them you won’t pay for things you didn’t agree to, but I guarantee they have documentation saying what you wanted changed and that will make this a harder case.

 

Everyone I know in contracting says changes are their bread and butter. Low ball the bid, jack up the changes charges, and make your money.

 

Mustlovedogs, this is frightening. Really? Jeez, I can't believe this is even legal.

Problem is, people don't know what they don't know. So anyone not familiar with contractors and/or hiring a contractor wouldn't even think to ask about this. Or any rationally minded person wouldn't think that changes would result in such an exorbitant bill. That's nuts.

There are no BBB police. It's an antiquated social media platform for complaints. It works if anyone goes there to read it.

I am not sure why or if BBB is even still around.

BBB is still very much around.

I've very recently filed complaints with the BBB against my (very large, national) cable service provider, and twice, have received calls almost immediately from "high-level" people at the cable company, with satisfactory results. Most recently, I felt I was baited & switched at the cable provider's office, where I was told I'd keep my premium channels if I bundled some services, but then those services were an "added fee". I called the cable provider and was told "sorry, nothing we can do", I asked for a supervisor, and, well, you know the drill.

I filed a complaint with the BBB & within days, I received a call from someone higher up at the cable company, and guess what....all my premium channels have now been restored, for my original fee. This was the 2nd time I've done this. The first time, was for service issues, not being able to get a technician for a week or more, and I now have a special phone # I can call the cable company for immediate assistance, where I reach a higher level person on the first call.

I do agree about yelp for small businesses & contractors, but the BBB is still very much around.

Are you sure it was due to BBB?

BBB has no jurisdiction and can't enforce anything.

OP, did you make sure to read ALL the small print, before signing the contract? It is absolutely surprising/shocking the amount of people who DON'T read the small print at all. Many many people barely skim over it and miss all the clauses which can come back to bite them. For too many people it's too much hassle and too much to read, so they don't bother.

If you signed the papers, with just skimming over the small print, you may have a hard time getting out of it. Best bet right now is to get in touch with a lawyer. Good luck.

Are you sure it was due to BBB?

BBB has no jurisdiction and can't enforce anything.

You're right, the BBB can't enforce anything. They do however, compile complaints and ratings, and given a bad rating, consumers who view the BBB ratings can decide to go elsewhere. So just like yelp, it pays to view a business' BBB rating.

In my case, I filed a BBB report, and the BBB turns that report over to the business. Any reputable business should handle any complaint with care, which the cable company actually did.

I was as shocked as anyone!

In both cases, about 4 years apart, someone from the cable company contacted me very soon after the filing, and in both cases, I was granted what I had complained about.

Isn't a "change order" a change not covered in the original agreement?

Isn't a "change order" a change not covered in the original agreement?

Yes, and they should be presented for signature, with pricing, to the client prior to proceeding. And this is whether or not the changes were required (i.e., potential building code violations or uncovering a safety issue such as mold or asbestos) or client requested.

OP, when changes or adds occurred were you given a formal, on paper (or electronic) price quote? And did you give written, electronic or verbal approval to proceed with those changes or adds?

There is no halfway serious contractor in the world who would engage in a contract that required a signature for every change order. The only thing that would p1ss off a homeowner more than an expensive change order fee / minimum would be having to pay for the idle labor and equipment until they officially signed off on said cost. That said, there's what the contract may permit and then there's best practice, the latter of which would obviously include, at the very least, a "PS - you're getting docked another $5000." Trying my hardest to give the contractor some benefit, they may have assumed the designer to be the intermediary in addition to the contract likely provisioning that they can change the order as necessary, "necessary" typically encompassing compliance. But, again, that's me having to try pretty hard to defend them.

Not meant to pull the legs off the spider as there's obviously not much the OP can do right now absent having a contract lawyer to compare the costs to the contract, but as a message to the general public, for any sizable job, unless you're contracting with your brother's company or someone you really trust, I'd stay away from low bidders and go for a fair cost + fee with a reputable contractor.

I've been a construction secretary for many years and every add or change required at the very least electronic confirmation of approval for added work or proof that the client requested the added work. Otherwise, how could the contractor prove that the work was approved by the client?

We do have language in the change order form that states the price for the added work is presumed approved if the client fails to respond within 7 days.

Shoot, even the repair shop that fixes my car is required to call me to ask if I want whatever additional repairs they say the car needs. They cannot proceed unless I say it's OK.

I'm curious to know if the OP received any notification at all regarding added work and/pricing for the extras.

You’re going to need to review your contract. Also, consider hiring an attorney. Do not cave to the contractor without a fight. Believe me, they expect you to negotiate and if you do not, you are just giving your money away. No offense to contractors, but they can be pretty sneaky. They are very good at finding money, especially when their clients are uninformed. You will probably pay something, but not 20 grand—if you fight.

I've been a construction secretary for many years and every add or change required at the very least electronic confirmation of approval for added work or proof that the client requested the added work. Otherwise, how could the contractor prove that the work was approved by the client?

This is correct. A contract is a mutual understanding and agreement between parties. A change order is required for any contract modification, i.e. time, scope, or budget. A change order can be an additional cost, or it can be a credit. The client or the client’s representative must sign off on each change order. A contractor cannot alter the contract without an agreement from all parties. The client has a right to review and negotiate every change order. The argument can go on for months. I have a change order right now that has been revised twice since June, and the client still can’t make a decision. I’ve also seen a change order go from a $150k CHARGE to a $200k CREDIT to the client. A change order can also be rejected. If you or your representative did not review and approve these change orders, they should not have been excecuted.

Review your contract for fees associated with change orders and project management. Ask to see the change orders and check quantities and costs. Look for consistency in labor and time between similar tasks on other change orders.

Some of this will depend on project delivery type. Also, who was reviewing these change orders? You or an architect or a construction manager? Does the designer work for you or does she work for the contractor? If she works for you, hold her feet to the fire. You should not pay if she designed something poorly. MAYBE you should pay if existing conditions varied from the contract set, or if you changed your mind and wanted something different—don’t forget that some modifications can be credits.

They don’t have to get you to sign off on change prices - especially if it’s not specifically stated to do so in the contract. You should’ve been proactive and ask about the price of the changes.

Yes, they absolutely do. A change in the project budget requires a change order request.

There is no halfway serious contractor in the world who would engage in a contract that required a signature for every change order.

This is so completely wrong.

The only thing that would p1ss off a homeowner more than an expensive change order fee / minimum would be having to pay for the idle labor and equipment until they officially signed off on said cost.

Change order work can continue while price is being negotiated.

That said, there's what the contract may permit and then there's best practice, the latter of which would obviously include, at the very least, a "PS - you're getting docked another $5000."

Scratching my head over this.