Inclement weather is just one factor that a builder or remodeler can cite for missing a deadline without suffering a penalty.
Q. We hired a contractor to do a major remodeling and expansion of our home, and the work was supposed to be completed by June 1. However, our area got some really heavy rain and even some hailstorms in May, so the workers didn’t show up for several days and the job still isn’t finished. Do we have any financial or some other type of recourse against the contractor because he missed the deadline?
A. Probably not. That’s because nearly all construction and remodeling contracts today include a provision for a force majeure, a French term for “superior force.” It allows a contractor or builder to avoid any liability if an unforeseen problem prevents a project from being completed on time.
For example, thousands of remodeling and construction projects were delayed by the high winds and heavy rains that Tropical Storm Beryl brought to Florida and other parts of the Southeast last month. Most of those builders can use their force majeure clause to avoid any penalties for not completing the job on time: Even those who didn’t have such a provision in their contracts could argue before a judge that the hostile weather made it dangerous or even impossible to do the work, so the judge would likely side with a builder if a customer sued for a missed completion deadline.
The hurricanes and storms that frequently slam the Southeast aren’t the only acts of Mother Nature that can trigger the use of a force majeure provision. Many other building projects are often delayed by heavy snowstorms, tornadoes and even earthquakes in other parts of the country.
It’s also worth noting that it doesn’t necessarily take an “Act of God” to activate a force majeure clause. Such a provision can be invoked by a number of other unexpected problems, including a labor strike or the failure of a supplier to get needed materials to the job site on time.
If, say, a contractor promises to finish a job by the first of the month but the needed custom-built cabinets or handmade tile that the homeowner demanded arrives three weeks later than expected, the contractor can unilaterally tack on three weeks or sometimes even more to the original completion date without incurring a penalty.
Q. We are getting ready to put our home up for sale, so we have interviewed three highly successful local agents. Two offered to take our listing for 90 days, but the third insists on a six-month contract because she says the sales market in our area is still slow and that a longer-term agreement will allow her to do a more thorough job of marketing our property. What do you think — 90 days or six months?
A. It’s usually best for sellers to insist on a 90-day listing agreement rather than a contract that locks them to an agent for a longer period of time.
A 90-day term is best because it gives an agent plenty of time to sell the home but allows the seller to cancel the agreement without penalty if the agent cannot find a suitable buyer within three months. A six-month contract can be hard to break, even if the seller grows unhappy with the agent’s services after three or four months have passed and the property remains unsold.
Q. I followed your longtime advice by creating an inexpensive living trust two years ago so my heirs could inherit my home quickly instead of spending all the time and money involved in going to probate court. I am happy to report that I am still very much alive, but now I am selling my house to move into a smaller home. Will the fact that my house is held in the trust’s name instead of my own cause any problems when my sale goes into the closing process?
A. No. Most people who form a living trust name themselves as its only “trustee” or as “co-trustee” if they are married. Either way, their role as trustee allows them to sell, remodel or refinance the property whenever they wish.
The closing process after the property is sold will be the same as if the house was not in a trust, except that you will sign the deed in your name but then add “trustee” behind it.
There’s also a chance that the company that provides the buyer’s title-insurance policy will ask for a copy of the trust, a task that you can easily accomplish by making a few photocopies. Ask the attorney or escrow agent who will oversee all the transactional paperwork for details.
REAL ESTATE TRIVIA: Exactly 127 years ago today, a French frigate named the Isere delivered a long-awaited cargo of 214 wooden crates stuffed with 350 preassembled pieces of iron pylons sheathed in copper to an aging military fort that sat on a small island in New York Harbor. Like a modern-day Lego set, those pieces were reassembled over the next year to form the Statue of Liberty, a gift from the French to all American citizens as a recognition of the relationship the two nations established in the Revolutionary War 100 years earlier.
Ÿ For the booklet “Straight Talk About Living Trusts,” send $4 and a self-addressed, stamped envelope to David Myers, P.O. Box 4405, Culver City, CA 90231-4405.
© 2012, Cowles Syndicate Inc.Copyright © 2013 Paddock Publications, Inc. All rights reserved.