We contracted ***** ************ at Bayou Homes gave a deposit and when the bank that he recommended turned down HIS credit we asked for a full refund
We first met with ***** ************ owner of Bayou Homes by Design early in January and discussed him the possibility of building a home on our lot. At that time we discussed our finance options. We met with him a few more times and then we entered a contract with him after agreeing on the price. We gave him a check for the down payment of $10,000 on 2-17-2013. He directed us toward Suntrust Bank where he stated he had connections and soon thereafter we applied for a construction loan (3/11/2013). We were approved for the construction loan in May but on X-X-XXXX Suntrusts' mortgage underwriting department turned down ***** ************ and Bayou Homes by Design down as the licensed building contractor based on "information on his background and credit check." For that reason on 6-5-2013, we requested in writing that our entire deposit (less any documentable expenses) be returned. We also requested a complete accounting for the time he allegedly spent. On X-XX-XXXX he finally returned by mail a check for $2838 to us and sent no explanation or accounting for the $7162 that he kept. None at all. He completed exactly zero work on the building site and the paperwork as far as preparing the bid I am told is not usually billable to the Owner. Another licensed building contractor and a real estate attorney have both informed us that contractors do not usually and customarily bill the owner for time it takes to prepare a bid or to fill out bank forms. We have asked him for a complete breakdown of his hours both on X-X-XXXX via email and again in a demand letter dated X-X-XXXX but still have not received it yet. We did receive a response to the demand, but he did not furnish us with any accounting for the hours of his time he is charging for.
He told us that he knowingly CHOSE not to mention his foreclosure to us because he thought we were paying cash. After the bank exposed them to us he admitted to having a foreclosure. In our opinion, this amounts to theft or a calculated attempt on his part to defraud us out of the majority of our down payment money.
We would like the full refund of our deposit less any documentable and verifiable expenses, including primarily that of his time which we believe he is highly overestimating not only the hours but also the value of. Also, he overcharged us for the builders risk insurance and then did not give us credit for the full refund which we have proof from the insurance company that they sent him a full refund for the full amount of $650. He has a different version of the truth, again without the documentation. If industry standard is to not charge the owner to prepare a bid and complete bank forms then I don't feel he should be trying to deduct that time spent from our deposit. Basically, all that he actually did work on would be the permitting preparation for the building permit from the City of Dunedin. According to the profit schedule that he prepared for the job, permitting amounts to only 3.28%of the total profit & overhead which would be $458 total for his time spent on that task. We are agreeing to pay any REASONABLE charges, but in our opinion he is trying to rob us. If he can show he did any work actual work that benefitted us that is usually and customarily charged to the owner he needs to show us a time sheet for that.
He is trying to state we had agreed to settle for the amount that he sent us but honestly, we cashed the check because we were sure, now that we have seen his true colors, that he would not hesitate to keep that as well.
He has already threatened us twice both verbally and in writing that he will file a lawsuit for slander, although we have not made any untrue statements. We are here to tell the public who may be doing a building project that we have a very bad opinion of him and his ethical standards for business, (as did the***************) I just hate to see someone get away with our $7000 with, in my opinion, absolutely nothing at all to show for it.
Refund in full based only on reasonable charges. In the likely event that arbitration is required I expect to be reimbursed for fees to file for the American Arbitration Assoc.
WE have learned to have a real estate attorney review any contract. Give no down payment until the bank approves the contractor. Keep good records. Report any bad contractor on this website.
Business' Initial Response
This response was provided verbally to BBB:
The customer started off with another builder and had a dispute with them. He wanted us to take over but we could not use the previous plans that were trademarked by the previous builder. We put the plans in to permitting and made the changes it needed. In between this process the customer decided he wanted to finance the construction through a bank. There was a problem in doing this and I explained it to the customer. He understood but his bank wanted to run the application through anyways. We filled out all the paperwork and it came back declined. The customer asked me for a back up plan and I contacted another licensed representative to get the financing approved. She did get it approved and I was going to superintend the job. The contract was under her name and I was honest with the bank about being the superintendent and the bank cut off financing to the customer. He asked me how much was the cost break-down of expenses in to the build. I had a ton of time in to this because the build was supposed to be a cash deal and then the customer wanted to change to financing. I met with the customer at my home for about 2 hours and we had an agreement for reimbursement. I cut a check to him and he cashed it. Then about a week later he sent a request for about another $300, I sent him a check for that amount and he ripped it up and sent me a picture of it. Then he started sending threatening emails and had filed multiple complaints with agencies and the police department. I have done everything we agreed to and he has made it very clear he has plenty of time to try and wreck my business.
As far as I am concerned we had an agreement, I sent him a check for the amount we agreed upon and he cashed it. In fact, I sent another check for an unexpected credit we received from the builders bond ($103), it was his money so I sent it to him.
Consumer's Final Response
In response to ***** comments and allegations Dated 8/21;
The dispute with the previous contractor was because he increased his price to build the day before closing on the loan by more than $20,000 and broke the contract. This was not due to my actions that caused this breach in contract. A total loss of $3,942 for no fault of my own...
As for deciding to finance late in the deal, that is completely untrue. We had an approved construction loan with ************ prior to meeting ***** and we always wanted to finance it. In fact the second meeting with him on Jan 28, just six days after the first meeting, we discussed financing and he gave us the contact at********* of ************ and I proceeded in applying for the loan. All of this done with *****'s knowledge. Plus, it all took place before the contract was executed with a deposit on Feb. 27. Our phone records show multiple calls to the contact number at *******t we received from *****.
He says he explained that there may be a problem in him getting approval with the bank early on. The fact is we didn't know there would be a problem until he was turned down by *******t on April 17 when the bank called me. This dispute would not exist if he had been honest with us up front.
As for me asking about a backup plan, I did offer to look into financing the project myself after he failed to qualify and asked if he could provide me with a construction schedule to assist in weighing my options as time would be an important factor. That should have taken about an hour to do. His plan B consisted of hooking us up with *************** for which the underwriters deemed would create a straw builder situation. After which I decided against it totally.
When I went to *****'s house on June 12, he says "we had a gentleman's agreement and he cut me a check", I actually intended to pick up a book that my wife had lent him and ended up discussing the situation.. I never agreed to his $5,100 labor bill among a few other erroneous charges he presented me with his cancelling contract letter.
He sent me a bill for $8,202.98 filled with charges that I had already paid cash for and things that I never received. Here's a fact that in my opinion shows deceit, he charged me $700 for a policy that cost $650.06 and he received a full refund after cancelling the policy at my insistance. And he's only refunded me $158 to date.
This has been a costly adventure that I have not wanted or asked for.
I have always been acceptable to allowing him to keep $4,000 for his time and expense which means he still owe me $3,161.53.