Building a home is a significant undertaking and it is important to enter into the process with a solid plan and clear expectations of all the parties involved in the construction process. Good communication is essential to ensure the property owner, the general contract, subcontractors, suppliers, architects, and other involved parties are on the same page.
When it comes to contractors, quality and integrity are critical. Contractors that don’t perform quality work usually carry their reputation around with them. An example of this is the case of Wisconsin home construction company Felicity Homes LLC, which is the subject of over 50 filings in Wisconsin Circuit Court over unsatisfied mechanic’ liens for unfinished work. The value of those liens, filed in less than two years’ time, is over $210,000.
The company defends itself by saying that final payments from customers are often used to pay off subcontractors and suppliers. The court filings speak for themselves, though. In addition, the company admits that it has stopped taking on new customers so that it can complete numerous unfinished products.
In Wisconsin, homeowners who purchase a home with unpaid liens are often responsible when the general contractor fails to pay subcontractors and suppliers. Homeowners may avoid liability, though, if they sign a waiver stating they are not responsible for payment on unfinished work.
Consumer advocates recommend not only that customers shop around for homebuilders, compare homebuilders’ insurance coverage, check on homebuilders’ bonds and licenses, and obtain a lien waiver before paying the general contractor in full. Another important task is to make sure the construction agreement identifies clear dates for completion and remedies for resolving disagreements on delays.
In a future post, we’ll look a bit more at the issue of sorting out construction delays and the importance of working with an experienced attorney in these disputes.