By Barry Stone
Dear Barry,
Our new home is currently under construction. Everything was going smoothly until we received a document that was intended for the bank that is financing the work. This paper contains a breakdown of all material costs for the project. Of concern to us are several items that are not included in the construction but are being billed to us. The builder says that this paper is for bank reference only and that we should not have been given a copy. This seems outrageous to us. We are the ones borrowing the money from the bank, so why shouldn't we receive copies of all cost breakdowns? Don't we have a right to know what we are paying for? In short, how should we deal with our builder? Robert
Dear Robert,
Your builder's way of doing business appears very suspicious and leads one to believe that the construction costs are being unscrupulously inflated. If the builder is unwilling to provide full, straightforward disclosure of all expenses related to the construction of your new home, you should discuss the matter with an officer of the bank and request that all pertinent building costs be reviewed and that their accuracy be verified. Additionally, you should get some advice from a real estate attorney. The builder is obviously misleading you with regard to your rights in the transaction. As a general safeguard against such abuse, no one should ever buy or build a home without some form of competent, professional representation.
Before remitting final payment for the construction, all uncertainties should be satisfactorily resolved, all questions should be thoroughly addressed, and no details pertaining to the project or the transaction should be withheld.
As a final precaution, don't close this deal without hiring an experienced home inspector. A competent inspector will definitely find defects, and the builder will be obligated to make corrections. Discoveries after the sale can be costly and painful. Protect your interests while you are still in the driver's seat. After the sale, the builder is unlikely to be interested in your problems.
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