Because she gave her word.
I would definitely tell the parents (and the kids if they will listen) "This is NOT a house I would flip because (1) bad bones, (2) money pit, (3) bad 'hood and even if that doesn’t scare you (4) it’s all going to be made worse by the kids trying to live in it/“help.” If either of the parents are any kind of professionals, remind them what a “help” it is when the clients want to do some of the work themselves to save money. [Or another analogy what it’s like when kids like to help with baking…longer, messier, less tasty etc.]
Crossing my fingers they go for the fix to sell —but also if you open it up and find stuff then it has to be disclosed right?
“Because she gave her word.”
Did you read what I wrote?
“Why don’t you only give free advice but let go with the project and have them to sign contracts with your “employee”. I did just that with my cousin’s renovation.”
Is there a way to structure the project so a decision can be made to bail out on a beautiful kitchen remodel and downscale to a fix up to sell?
For example looking under floors and into walls before picking out materials?
On top of all that, there are the legal risks. Acting as a general contractor without a license has all sorts of draconian legal ramifications in California, including (but not limited to) criminal prosecution (it’s a misdemeanor). This is on top of the unenforceability of any contract that we’ve previously discussed; you likely won’t get paid if things go wrong.
I know you are taking the position that you are not acting as a contractor, but how confident are you in that conclusion? In addition to whether you are acting as a contractor, there are all sorts of legal questions surrounding the subs; are they yr employees? What ramifications flow from that? What if they don’t pay the subs? Are you going to pay them?
At a minimum, I’d run these issues past a lawyer to ensure you fully understand the risks.
At least then you’ll be in a position to weigh the potential upsides (small fee, favor to investors) against the downsides if things really go south. You’ve been very good to your investors; it is not like they haven’t made money off your deals. They should do you a favor and let you off the hook on this job.
You could easily say that having looked over the project in more detail you realize that it really requires a general contractor and then provide a recommendation. You could still serve as a design consultant.
Yes, I read what you wrote. That is not what she agreed to do.
In my state unlisc contractors cannot sue to recover unpaid amts.
So, @Consolation, if CB determines that the scope of work really puts her in the position of having to act as a general contractor on the job, and acting as an unlicensed general contractor is illegal, do you really think she is honor-bound to proceed?
@notelling, we cross-posted. I was responding to artloversplus, not you. His reasons for bailing were solely financial, not legal.
I agree with all of your points regarding the legal pitfalls.
Apparently it was not a good decision to agree to do the job on these terms in the first place. I think everyone agrees with that, including coralbrook. But it is one thing to insist on restructuring the deal because it is actually illegal and could have huge personal and professional ramifications, and another to do so or pull out because you could make more money elsewhere.
IMHO, yes, the latter would be dishonorable.
CB, your integrity is evident throughout all of the projects you’ve posted here, so I understand why you feel compelled to follow through after having agreed to help.
However, the legal ramifications seem daunting, and the likelihood of reaching the end of this project with happy homeowners and parents seems slim to nil, given the many challenges you’ve noted. This project seems like a red flag version of Whack a Mole, where another red flag will pop up just as you evade the previous one.
Your good intentions could backfire, resulting in the loss of an investor for future projects. I hope you can bring your expertise and negotiating skills to the conversation with the parents and convince them to bail on this project.
I hope this does not become a lose-lose. Situation. No good deed goes unpunished.
I’m not personally worried about the legal ramifications because I did this same thing for the parents…the PB townhouse. Everyone clearly understands that I am acting as Project Designer/Manager and take no responsibility for work performed.
They are paying labor directly.
I’ve asked for another meeting to try to convince them to clean up the house and move on
As a matter of curiosity, what is the difference between a “Project Designer/Manager” and a general contractor in a case like this?
I don’t practice in this area of the law, but a quick Google search shows that “contractor” is defined in relevant part under California law as:
So it sounds like CB is a contractor by virtue of being a consultant?
legally, a general contractor in Calif is supposed to have a license issued by the state. I seem to remember that cb stated a while back that she did not have a general contractors license.
Uggghh…I didn’t know that. I would be finding subcontractors for them. That is the single fine print I could get in trouble
That’s a question for CB to ask an atty who practices in that area of the law in a privileged setting.
CB, I want to stress that you shouldn’t draw any conclusions based on what we say here; a quick consult with a lawyer will tell you whether you can structure the deal legally. I have no idea whether there are exceptions to that statute, for example. My point is just that you should run the deal by a lawyer with expertise.
The reason I even entertain these side jobs is because it is extremely important to keep my core crew employed.
I would not be able to stay in business if my carpenter found another job. He would have no choice but to find another project if I told him we have no work for 2 months. I could buy dozens of great properties but then I would just be standing there going “Now what?”