Q: Do I have to pay a restitution fee to a General Contractor who was dropped after a month of negotiating his bid?
Over the past month, I have been in the process of purchasing a house using a Loan company that insisted on using a General Contractor. After negotiating his bids (several rewrites), I finally got him down to somewhat reasonable pricing for the jobs that needed to be done (required by loan company). Over the last 20 years I have renovated several homes and 2 churches (as a hobby) and know the cost of things. I've also been a landlord for over 30 years and know the cost of repairs quite well. That is why I insisted that his first bid of over $121,000 was ridiculous. I was able to get him to rewrite the bid down to $61,000 after several cuts. I did not sign any of the bids, nor a contract.
We have decided to purchase the house with cash instead of a loan. This has eliminated the need for a GC. He is now demanding that I pay him $3000 for his time. Is he allowed to do this? He is going to take us to court if we don't pay. Our closing date is Nov. 8, 2019.
A: There was no contract requiring that you pay him for his time. He did not suggest that he should be compensated for his time during the negotiations. He can file a lawsuit, but he should not be able to prevail.
Bruce Alexander Minnick agrees with this answer
A: The contractor planning to sue should know that all contracts involving land must be in writing to be enforceable. So unless there is some written document that a court could construe as being an enforceable contract you will win.
A: The term “restitution” makes me wonder if he has filed some criminal charge. If not, and if you had no contract, then no you don’t have to pay him. If the criminal court is involved, you should seek counsel.
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