I have been discussing how building owners can protect themselves when their building contractor stumbles. But in some cases, the client is a willing participant.

Some firms have recognized that current economic conditions have led to the cheapest building prices in years. These owners are driving the hardest bargain possible, and if the contractor takes a project for too little money, not their problem. Often the thought is, “The contractor should have known what they were getting into.” While this is a true statement, it is only a good deal if the contractor completes the project for the amount agreed upon.

Several years ago, we were asked to provide assistance to a building owner who had paid  $150,000 for changes to his contract. When I reviewed the documents, it was clear the additional items the owner was charged for were in the original contract.

This building owner also requested we inspect the building to ensure it met the contract drawings and code requirements. The most glaring defect: the roof insulation and metal roof were incorrectly installed. Both needed to be removed and replaced.  The attorney and client said that when the contractor was confronted, he responded that the client knew he could not build the building for less than its cost. Unfortunately for the client, the contractor had filed for bankruptcy. The only comfort the client had was a cheap building for a cheap price.

The old saying was true years ago, and it is still true today. “If it is too good to be true, then it is probably is.”