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In Trouble!!!!!


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My brother and sister in law bought a house that had been sitting vacant for over 30 years (they liked the location). They had to gut the house and rebuild so they took out a construction loan and took bids. They decided to go with the lowest bid. They knew someone that used this contractors work and they also got a referral from him from the lumber store.

Flash forward 6 months later...........the contractor hardly ever showed up on the site. He sent 2 other boys to complete the work. The flooring is not finished, the roof is uneven, the work that was done on the house was really shoddy. My brother in law fired them (basically told the kids on site to go home) but the contractor he hired has never called him back and this has been ongoing for 3 weeks. The house is not finished and definitely not liveable. They are nearing the deadline for completion of the house. They fear they are going to have to let the bank have it back because they gave these contractors nearly all of their money. They have very little money left.

We are in the state of KY, does anyone know where to turn or what to do?

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Start by researching their state's laws. Most states regulate contractors, requiring them to be licensed and insured, possibly bonded. There should be a state agency...The first step would be to contact that agency, make a complaint and ask for advice there.

They should also be in contact with the lender, since that entity has a vested interest in getting re-paid. Ultimately, your brother and sis-in-law are responsible for the loan, but maybe the lender can bring pressure on the contractor.

They should also pursue all other avenues: BBB, AG, local TV consumer reporters, newspapers, etc. They might also want to go ahead and file suit against the contractor, so a local attorney might be helpful.

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Thanks, I hadn't thought about some of those things.

They did speak to a local attorney and he told them if they did sue then the contractor would probably take bankruptcy and they would never see a penny. They might of been told something else but they have really been too devestated to speak about it!

Really sad situation, brother and sister in law just lost their jobs, have a newborn and a seven year old. Living in a cramped apartment and were really looking forward forward to being in their first house. :( :( :( :( :(

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Our hearts go out to them. They can let themselves be paralyzed by frustration and fear or fight.

The contractor may file BK to avoid a judgment. No one knows the future. IMO, your relatives should sue anyway. They may need proof that they are pursuing all available remedies in order to avoid being sued themselves.

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  • 2 weeks later...

They are basically screwed...

In accounting lingo, it is called "percentage of completion"...

You pay out only when milestones have been reached... General contractors and sub-contractors rip people off all the time when they are paid up front...

I used to be an accountant for a homebuilder and we always got screwed every time we did that even with the reliable sub-contractors... There are so many horror stories from friends and neighbors about that for even small stuff... A neighbor up the street paid a sub contractor $400 to build a brick retaining wall up against his house. The sub already done good work for him before but this was the first time that the neighbor paid him up front. He took the cash and disappeared...

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  • 2 weeks later...
They are basically screwed...

You pay out only when milestones have been reached... General contractors and sub-contractors rip people off all the time when they are paid up front...

Yup so do realtor's and brokers.

A very unfortunate fact of life.

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