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NEED REFERRAL FOR A GOOD CONSTRUCTION ATTORNEY

kimbalee

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Anyone have any recommendations in SoCal (we r in Corona)? For a dispute with a Colorado steel building company.
 

Tooms22

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Could you give a broad summary of the issue?

I usually have someone I can recommend but I need a little better understanding of the issue.
 

Mandelon

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Jim Greer. Helped me out multiple times. He has office in Del Mar but now lives in Colorado. Not sure if that is a plus for your case or not.
1942 Broadway, Ste. 314
Boulder, CO 80302
Telephone: (303) 818-8422
 

kimbalee

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Could you give a broad summary of the issue?

I usually have someone I can recommend but I need a little better understanding of the issue.
Basically we bought a building in October last year, signed the contract, locked in our steel price and now they are demanding another $100k bc of steel price increases. Either we pay or forfeit the $50k we have already paid and walk away.
 

kimbalee

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Jim Greer. Helped me out multiple times. He has office in Del Mar but now lives in Colorado. Not sure if that is a plus for your case or not.
1942 Broadway, Ste. 314
Boulder, CO 80302
Telephone: (303) 818-8422
This may be an advantage. Thank you
 

bldrinker

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Basically we bought a building in October last year, signed the contract, locked in our steel price and now they are demanding another $100k bc of steel price increases. Either we pay or forfeit the $50k we have already paid and walk away.
Signed contract with a 50k deposit?
Unless there is more to the story that’s a slam dunk.
 

kimbalee

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Is there an escalation clause?
There is a paragraph in the terms and conditions that says if price increases due to deliberate BUYER DELAY, then they can put those costs on buyer. We never delayed anything but they are saying we did (do your business in email writing not phone calls). We shall see what the lawyers say. Thank you all for your recommendations.
 

Bigbore500r

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Basically we bought a building in October last year, signed the contract, locked in our steel price and now they are demanding another $100k bc of steel price increases. Either we pay or forfeit the $50k we have already paid and walk away.
The issue is that escalation of materials right now is being classified as a "force majeure" event.

Force Majeure - unforeseeable circumstances that prevent someone from fulfilling a contract.

Steel has escalated 25% +. We are a large contractor and have vendors hitting us left and right with these letters and cost increases. Covid supply chain disruptions that have rippled downstream and combined with other factors, escalated the costs of raw materials out of site, beyond what escalation is typically projected. Suppliers and vendors are saying they are unable to absorb and cannot fullfill orders or honor purchase agreement terms (contracts...)

May not be a slam dunk, despite you having a signed contract and deposit.
 

HB2Havasu

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If you’re contractor can substantiate the price increase (in writing) I might be willing to negotiate if there is no true escalation clause, but a $100K increase seems extremely high unless the steel building is ginormous? (You didn’t say the square footage?) The problem is deliberating this in court for years to get back $50K may end up costing you more in the long run. Good Luck. I feel your pain - Lumber Price increase just jacked up the construction cost on my home by $35K. Not an easy pill to swallow. 💊
 

Gonefishin5555

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Just a thought on this matter. You can hedge against price increase for most commodities these days? I know they do it for jet fuel. Lumber? Precious metals? Price fluctuations seems to be a foreseeable and regular occurrence so maybe suppliers should be on the hook for doing their job in a competent manner.
 

HB2Havasu

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Just a thought on this matter. You can hedge against price increase for most commodities these days? I know they do it for jet fuel. Lumber? Precious metals? Price fluctuations seems to be a foreseeable and regular occurrence so maybe suppliers should be on the hook for doing their job in a competent manner.
Suppliers cannot control the Commodity Markets. Ultimately the end user is going to be on the hook for cost increases. Your only other alternative is to have your builder either walk away and take him to court or file bankruptcy. Either way your totally fucked!
 

kimbalee

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If you’re contractor can substantiate the price increase (in writing) I might be willing to negotiate if there is no true escalation clause, but a $100K increase seems extremely high unless the steel building is ginormous? (You didn’t say the square footage?) The problem is deliberating this in court for years to get back $50K may end up costing you more in the long run. Good Luck. I feel your pain - Lumber Price increase just jacked up the construction cost on my home by $35K. Not an easy pill to swallow. 💊
This is exactly what we are afraid of. The bastards literally have us by the balls and there is nothing we can do but pay unless we tie it up in court/attorneys for $1000s & months. It is a big builiding (7,000 sq ft) but to double the cost with a 25% commodity increase is absurd. As a last resort I emailed the company owner this morning and I will be giving James Greer (colorado atty) a call this afternoon. Thank you all again.
 

Done-it-again

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This is exactly what we are afraid of. The bastards literally have us by the balls and there is nothing we can do but pay unless we tie it up in court/attorneys for $1000s & months. It is a big builiding (7,000 sq ft) but to double the cost with a 25% commodity increase is absurd. As a last resort I emailed the company owner this morning and I will be giving James Greer (colorado atty) a call this afternoon. Thank you all again.
Something is wrong...... they are asking for an additional $100k for a 7k sq foot building?

Or does this include the concrete work and install?
 

dspracing

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This is exactly what we are afraid of. The bastards literally have us by the balls and there is nothing we can do but pay unless we tie it up in court/attorneys for $1000s & months. It is a big builiding (7,000 sq ft) but to double the cost with a 25% commodity increase is absurd. As a last resort I emailed the company owner this morning and I will be giving James Greer (colorado atty) a call this afternoon. Thank you all again.
Steel has gone up much more than 25% depending on what you are dealing in, more like 2-3x. My steel costs have gone from $0.45/lb on average to $.85-$1.80/lb depending on the item.
For example -
1.5" steel angle, was $10.50, now $15.45
2.5x3.5x3/16 steel tube, was $93, now $305
3/16x48x96 steel tread plate, was $108.20, now $421.05

If your building was $100k and it's now $200k and you can't prove you didn't cause any delays, It sounds like the best you can do is sit tight and wait for the prices to come back down. If you were to get your $50k back would you be able to get a competitor to build for less than the $200k? I doubt it....
 

Rye

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Sorry you’re having problems. Similarly this just happened to me on a steel building but on a much smaller scale, $4300 increase on a $65K building. I wasn’t and still not happy paying it but I’m already 9 months into permits, earthwork, foundation and building being delivered. Building was delivered yesterday. 👏
The company that designed/brokered my building accommodated me very well as far as customizing it, no one else I talked to would vary much from their norms. My only consolation is I got what I wanted. I’m expecting a $20/CY increase in concrete from what I budgeted, in this case I don’t have a quoted commitment so I’ll have to eat that too.
I wouldn’t stand for the kind of increase they’re trying to stick you with and question whether the manufacturer can even justify that large of an increase. Hopefully a call from a reputable lawyer will bring them to their senses. Anyway, I hope you’re situation has a happy ending.
 

grumpy88

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Excuse my ignorance but i thought a contractor was only allowed to take 10 percent down ?
 

NicPaus

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Excuse my ignorance but i thought a contractor was only allowed to take 10 percent down ?
Up to a $1000. So if he paid 50k I would of expected them to purchase the building at that time and lock in the current rate. But not sure of the contract law in Colorado. A 50k deposit is a hefty commitment without them purchasing anything at the time.

I hope he gets it figured out.
 

HB2Havasu

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This is exactly what we are afraid of. The bastards literally have us by the balls and there is nothing we can do but pay unless we tie it up in court/attorneys for $1000s & months. It is a big builiding (7,000 sq ft) but to double the cost with a 25% commodity increase is absurd. As a last resort I emailed the company owner this morning and I will be giving James Greer (colorado atty) a call this afternoon. Thank you all again.
Not sure where your getting that there has only been a 25% increase? Steel prices have more than doubled in the last year. I don't think your builder is trying to rip you off. I couldn't morally or ethically expect my builder to eat the cost increases alone. I personally would wait until the end of summer unless you MUST have this building done now? Retail prices for steel and lumber are going to drastically fall by September/October timeframe. Building Permits have hit a low - Material Pricing usually follows the trend a few months later when retail inventories start to stack up and there is no demand at the Mills. So unless your in a rush to get this building started now I would either eat the cost increases or wait out the market to get over all this panic buying. Attorneys should be your last resort - not your first. Just Saying! Good Luck.

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kimbalee

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Steel has gone up much more than 25% depending on what you are dealing in, more like 2-3x. My steel costs have gone from $0.45/lb on average to $.85-$1.80/lb depending on the item.
For example -
1.5" steel angle, was $10.50, now $15.45
2.5x3.5x3/16 steel tube, was $93, now $305
3/16x48x96 steel tread plate, was $108.20, now $421.05

If your building was $100k and it's now $200k and you can't prove you didn't cause any delays, It sounds like the best you can do is sit tight and wait for the prices to come back down. If you were to get your $50k back would you be able to get a competitor to build for less than the $200k? I doubt it....
That is exactly what we are probably going to do. Wait until the supply/demand balances out - exactly what HB2Havasu recommended.
 

kimbalee

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Not sure where your getting that there has only been a 25% increase? Steel prices have more than doubled in the last year. I don't think your builder is trying to rip you off. I couldn't morally or ethically expect my builder to eat the cost increases alone. I personally would wait until the end of summer unless you MUST have this building done now? Retail prices for steel and lumber are going to drastically fall by September/October timeframe. Building Permits have hit a low - Material Pricing usually follows the trend a few months later when retail inventories start to stack up and there is no demand at the Mills. So unless your in a rush to get this building started now I would either eat the cost increases or wait out the market to get over all this panic buying. Attorneys should be your last resort - not your first. Just Saying! Good Luck.

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We could not agree with everything you just said more. Thank you very much. We spoke to Jim Greer (thank you Mandelon - what a first class and SMART guy) and he pretty much told us everything you just said so that is what we are going to do - the manufacturer has told us in writing that we can do that. We are building at 4800ft asl so won't be able to do anything in the winter anyway so will wait it out and hope like hell you're right and the steel prices come down! One question tho' - what market or commodity site/price should we be looking at the trend for to get an accurate picture of what the steel manufacturers are paying? I can't tell from your pic what your source was. I don't want to get bamboozled by them again.
 

HB2Havasu

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We could not agree with everything you just said more. Thank you very much. We spoke to Jim Greer (thank you Mandelon - what a first class and SMART guy) and he pretty much told us everything you just said so that is what we are going to do - the manufacturer has told us in writing that we can do that. We are building at 4800ft asl so won't be able to do anything in the winter anyway so will wait it out and hope like hell you're right and the steel prices come down! One question tho' - what market or commodity site/price should we be looking at the trend for to get an accurate picture of what the steel manufacturers are paying? I can't tell from your pic what your source was. I don't want to get bamboozled by them again.
I use this: https://www.marketwatch.com/investing/future/hrn00
 

kimbalee

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F N A

What are the details on this. Rough costs?
our contract was for $104k in October. Now they are holding us hostage bc of steel price increases and our cost is now $200k. That is why I posted to get the advice of a construction attorney. Turns out fighting them would probably result in losing our $50k they already have, massive atty/court costs (even tho signed contract, the damn scamdemic and affected commodity prices come into play), months/years delay and worst of all - we will never get our building so we are going to wait for the steel prices to hopefully go down, reduce the steel cost part (agreed by the manufacturer) and get the building delivered next year instead. It sucks but it is our best option at this point.
 

Hammer

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our contract was for $104k in October. Now they are holding us hostage bc of steel price increases and our cost is now $200k. That is why I posted to get the advice of a construction attorney. Turns out fighting them would probably result in losing our $50k they already have, massive atty/court costs (even tho signed contract, the damn scamdemic and affected commodity prices come into play), months/years delay and worst of all - we will never get our building so we are going to wait for the steel prices to hopefully go down, reduce the steel cost part (agreed by the manufacturer) and get the building delivered next year instead. It sucks but it is our best option at this point.
Why did you give them 50% down? In my opinion it should have only been anywhere from 5-20% down at most.

Depending on how you negotiated the contract and payment terms you should not have had to put any money in beyond that deposit until the material was ordered with an arrival date. That would have reduced your financial liability/risk had force majeure or material costs skyrocketed in this case.

If someone asked me for 50% down on materials without guaranteed deliverables of materials at the contract cost I would have said thanks but no thanks. The other option with 50% down I would have asked to see an order executed with the material cost locked in based on the contract value. That’s a lot of blind faith to give up 50% of the contract cost with nothing guaranteed.

Sorry to hear your in a bad spot with 50k out of your pocket. As you mentioned, not much you can do now but wait out the steel costs.

Hope to see the build thread here once you break ground.


Sent from my iPhone using Tapatalk
 

kimbalee

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It wasn't 50% down - it was 25% down and then the other $25k was for engineering, dormers, cupolas etc. - shit they don't tell you about when u sign the contract. Shady operators to be sure.
 

Mandelon

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I would sure stay in touch with them on the regular. Did Greer have anything to say about them holding the deposit for that long? That would kinda scare me.
 

Vib

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Since we are in the market for numerous steel bldgs right now, please let us know who the company is?

Were getting a lot of bs right now trying to complete the rv park. The locals just see us as a cash register 😒
 

kimbalee

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I would sure stay in touch with them on the regular. Did Greer have anything to say about them holding the deposit for that long? That would kinda scare me.
he did not and he advised us if there was a way they would agree to wait until the steel prices come down, to do so. Funnily enough, he kinda got bamboozled the same sort of way some years ago with a cabin that he had purchased. They got you by the balls when u don't have the building yet.
 

kimbalee

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Since we are in the market for numerous steel bldgs right now, please let us know who the company is?

Were getting a lot of bs right now trying to complete the rv park. The locals just see us as a cash register 😒
Whatever you do, do not do business with Armstrong Steel in CO. They have shady connections apparently to some company in Pittsburgh and somehow General Steel also comes into the conversation but they are straight up DISHONEST.
 
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