Everyone’s a “Friend”
Just before beginning Vercetti Enterprises, one of our team members was approached by his close friend whose family was in the beginning stages of constructing their new dream home. Prior to beginning the actual construction he was seeking to entertain a separate builder in order to review the construction documents, provide a professional opinion, and potentially even build the home. Unfortunately at this time Vercetti Enterprises had not yet been developed and was unable to take on such a task, even for a close friend. This friend ended up contracting an architect who is a friend that lives in their current neighborhood and a general contractor who was an acquaintance that was referred by a mutual friend. Months after beginning construction and with Vercetti Enterprises fully developed, he asked if we could take some time out of our schedule to come take a look at their project as he was having some doubts regarding the team he hired. We took the time to pass by later that week as we were looking at other properties in the area to potentially develop. Immediately upon seeing an empty site with little formwork and rebar in place, we knew that only a limited amount of work had been performed outside of demolition and that the project was moving at a snail’s pace. We did not want to jump to conclusions but brought up some of the critical elements we were able to see after our very limited review. Nonetheless, the owner was still excited with the prospect of having his dream home come to fruition and continued to move forward with construction with his new friends.
About a little over three months after our brief discussion with the owner, the homeowner’s family requested to meet with us immediately as the son and wife were frustrated and deeply concerned that matters were getting out of hand. They believed that the project was beyond the homeowner’s experience and that the architect and general contractor may be taking advantage of the situation. We met at the jobsite only to see about three months worth of work completed with over six months of time passed from receiving the Notice to Proceed and eight months of time passed from receiving the Notice of Commencement. During our meeting at the site we saw a foundation completed, ground floor slab poured, concrete columns poorly poured half-way, a dirty job site, and a surplus of rusted rebar tossed to the side. What was completed at this time was at most 20% worth of work. The owner immediately began to quickly discuss the details of him managing the project and how the majority of the design and finishes have been selected. I asked him how he was providing the deliverables to the general contractor and he responded with an answer consisting of phone calls, text messages, and emails. I then asked if the architect was involved and he responded that the architect did not want to perform the Construction Administration portion of the project as he was more of a designer. He also mentioned that there has been multiple change orders since the beginning of the project. We began to discuss the key issues much more in-depth which led to the owner providing us with the timeline of events and what each party is performing. We were surprised to find out that the general contractor was contracted to a sixteen month schedule and was paid 30% upfront. Shortly thereafter, we were told that the general contractor was more of a project manager and that the concrete shell company hires the subcontractors, manages, and performs the work. It turns out that owner actually sees his construction crew on different sites and has to beg to receive man power on his site. During our in-depth discussion, the owner realized that his gut feeling was correct all along and that the project had become a mess from all angles.
The homeowner is a successful professional who is one of the best at what he does. Unfortunately, that has built an additional layer of ego that lead him to believe that he could solve any problem, especially the ones pertaining to his home. The architect should not have left his client high and dry by not performing the construction administration. He at the very least could have referred someone to perform that portion. The general contractor, who turns out to really only be a project manager, should have provided a realistic schedule, not shop his work out to a shell contractor, and definitely not take a 30% deposit for a project that is well over $1m. The owner knew the drawings were not completed but figured with his new “friends” that they could figure it out as they go. He had a gut feeling about the designs, contracts, deposits, and performance but choose to proceed anyways. Quite frankly, it was difficult telling a friend in front of his family that they made a mistake but it had to be done. Now they are faced with an even more difficult decision on trying to figure out how to proceed from here. Lesson learned, follow your gut feelings, get a second opinion, and remember that you are hiring a professional not just a “friend.”