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.
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