On paper, it was a perfect match. A wealthy homeowner and their family want to build their dream home. The owner’s spouse knows the spouse of a small local builder. The owner and builder meet after their spouses connect them. They hit it off.
They quickly reach an “agreement.” The construction begins with excitement. The builder receives the first few progress payments. The process seems to be humming along.
But then, things take a turn for the worse.
It turns out the “contract price” was really a budget. Each selection the owner makes, including roofing, siding, windows, doors, cabinets, and flooring, is more expensive than the “allowance” in the budget, so the price increases weekly.
The honeymoon is over. There is palpable tension. The owner and builder barely speak.
Adding insult to injury, the owner catches mistakes. They ask for changes to bathroom 6, but the builder forgets. The subcontractors seem incompetent. Wrong plumbing fixtures are installed. Electrical outlets are in wacky places.
The owner is so worried that they audit the invoices. They find discrepancies. They hope it’s negligence but are concerned because each “mistake” benefits the builder.
Construction limps toward completion. A certificate of occupancy is issued.
The owner and their family finally move in. But the home took twice as long to build and cost twice as much as promised. Even worse, more problems emerge.
Those wood doors facing the sun the owner insisted on, despite the builder’s warning they’d warp, begin to warp. The home automation system never works. Cooling bedroom 4 to a comfortable temperature turns bedroom 5 into a meat locker.
The first rains come. The roof and windows allow water to pour into the home.
The owner insists the builder immediately fix everything. As a precaution, the owner withholds final payment. The builder then stops responding to complaints. That causes the owner to go ballistic and instruct their personal lawyer—who has no construction law experience—to file a lawsuit.
The owner and builder are now engaged in a kind of litigation—high-end home construction litigation—that is notoriously difficult to resolve. Here are four reasons why.
Emotions run high.
The parties to a high-end home construction lawsuit tend to be emotional. These emotions will cloud their judgment and trump logic.
Owners will be emotional because they will feel betrayed. For one, owners often believe their builders violated the trust the owners put in them by hiring them to build a home. Additionally, when owners build custom homes, they’re building their dream homes. They’ve invested time and money in developing a concept that feels personal to them. After all, it is where they will live with their families and where they’ll entertain their extended family, friends, and business associates. When builders get something wrong, owners may feel like the defect is an affront to them personally because of the close connection we as humans have to our homes. No matter how unrealistic their expectations may have been, owners are likely to feel defrauded if their builders do not give them exactly what they wanted.
For these reasons, experienced …….