Breach of Contract? HOA has uncompleted work by contractor.

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Latest post Mon, Sep 26 2016 9:36 AM by ca19lawyer2. 2 replies.
  • Sun, Sep 25 2016 7:48 AM

    • PATinNC
      Consumer
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    • Joined on Fri, Mar 7 2014
    • NC
    • Posts 24

    Breach of Contract? HOA has uncompleted work by contractor.

    Thank you in advance for your contributions to our situation.

    We are a HOA located in North Carolina. We signed a quote and were invoiced in April, 2016, with a construction company to perform the following work:

    Obtain NC commercial building permits.

    $1,700.00

     

     

    Remove the existing wood railing around the walkway and replace with heavy duty aluminum railing.  Remove and replace walkway deck boards with #1 kiln dried cox wood.  Install bench seating along walkway adjacent to pool house.  Patch cracks on the concrete slab.  Install 12x16' wooden pergola on concrete slab.  NOTE:  if staining the new deck boards is requested, an additional $400.00 will be added to the final invoice.

    13,520.00

     

     

     

     

                            TOTAL OF MATERIALS AND LABOR:

    $15,220.00

    The cost of the pergola kit is included in the work as evidenced in the clarification of another email.

    We also received a quote for a stick built pergola from the same company which totaled $14,920.00. We choose to go with the kit as we thought it would be easier.

    In May, 2016, the company proceeded with the work and replaced the decking. In July, 2016, the railings were completed.

    The company has since informed us that they were unable to obtain a building permit for the kit pergola from the building department.

    Additional information: This project is part of a City Grant program for which we applied and were awarded.  We repeatedly requested that the construction company provide us with contact information within the building department so that the Grant department could interact on our behalf to assist in the project.  That information was never provided. Our original contact at the company no longer works there.

    We have received a final invoice from the company in the amount of $10,090.00. This broke down to $960.00 for permits and $9.160.00 for the walkway and railings.

    The cost of the pergola kit is $4,290.00. They have taken $4.360.00 off their original invoice.

    The HOA approached the company and asked that they complete a stick built pergola at the contracted price for the kit. They are refusing and have provided the following as their reason:

    Per our conversation of this morning, I have reviewed the invoice, estimate and invoices for materials and labor. While I do concur with you regarding the amount of the credit given, I have found that the cost of materials and labor that we have in this project just covers the work we performed.  In discussing this with our sales team, it was our intent to install the pergola while we had crews there doing other jobs at a minimal cost with no profit. Therefore, the cost reduction we have provided covers all we had for that item.

    We really need a pergola to close out our Grant with the City. We have obtained 2 estimates that range from $6,000 - $7,800. The community is not in a position to add additional funds to the project and feel that the amount billed for the walkway and their explanation of “while doing other things” is not acceptable. Fortunately, we have only paid $5,000.00 in progress billing towards to work done.

    Are we justified to pay in full an amount reduced by the cost of building a pergola? If the time came, would our reasoning hold up in small claims court?

    Since we are a HOA, and the work was on community property, I really can’t see them placing liens on 144 units to secure any of the debt.

    Any guidance or comments would be greatly appreciated.

     

     

     

     

  • Mon, Sep 26 2016 8:31 AM In reply to

    • Drew
      Consumer
    • Top 10 Contributor
    • Joined on Thu, Mar 30 2000
    • PA
    • Posts 51,370

    Re: Breach of Contract? HOA has uncompleted work by contractor.

    I d be down in person to building dept and find out what it takes to get relevant permit , if such is feasible ....it's possible kit is not " to code " but  I suspect you find other issues ....which you might be able to solve ....



  • Mon, Sep 26 2016 9:36 AM In reply to

    Re: Breach of Contract? HOA has uncompleted work by contractor.

    PATinNC:
    We are a HOA

    No you're not.  I assume you're a person who owns property that is subject to the authority of an HOA.  You might even be a member of the HOA and/or a board member.

     

    PATinNC:
    We signed a quote and were invoiced in April, 2016, with a construction company to perform the following work

    I assume you mean that someone acting on behalf of the HOA signed the quote (as opposed to whoever "we" are all having signed the quote as individuals).

     

    PATinNC:
    Are we justified to pay in full an amount reduced by the cost of building a pergola?

    As far as I can tell, the contract called for several discrete items, one of which cannot be completed.  Therefore, reducing the contract price by the cost of that item would be reasonable (unless the contract says otherwise).

     

    PATinNC:
    Since we are a HOA, and the work was on community property, I really can’t see them placing liens on 144 units to secure any of the debt.

    The lien would be against the property where the work was done (apparently common areas).

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