Finding Errant Builder
Ask the Real Estate Lawyer: Real Estate Law Q&A
REM #LAW 665
By Ilyce R. Glink and Samuel J. Tamkin
Summary: The reader has purchased and closed
on a new condominium. Not only did the builder not finish the landscaping, the
town is now demanding a correction in the grade of the lawn. Ilyce and Sam discuss
how to track down the builder and determine if they have any recourse.
Q: Our problem is with the builder of the condominium we purchased last year.
(article continues below useful links)
We were promised a yard that had been laid with sod before we closed and the
builder kept giving us one excuse after another to delay the installation.
The town that we live in has demanded that the builder correct the grade elevation
on the property surrounding our building. The builder has been notified twice
and hasn’t responded to the town. It is now months later and we still
do not have a proper landscaped yard.
We have heard that the builder's limited liability company has disbanded and
our warranty with the builder is up in two months. What should we do?
A: I suspect that your builder has fallen into hard times and now doesn’t
have the money to complete the landscaping for your condominium building.
You may want to investigate a bit to see what’s going on. In this modern
age, you can search your State’s registry of companies to determine if
your builder’s company has been dissolved.
If it has not been dissolved, the information you heard may not be true. If
it has been dissolved, it would indicate that the builder either failed to pay
required fees or failed to make required filings to the state agency that administers
company documents. In either case, it’s a bad sign.
Frequently, you can search company records on the web site for your State.
To find the proper site you can do an internet search for your state’s
Secretary of State’s Office or Department of Financial Institutions.
Depending on what you find out, you may wish to contact the building department
in the town in which you live. They may have information about your builder
and other projects he may be working on right now.
Once construction on a home has ceased, the local town, city, or village municipality
will inspect the home and issue a certificate to indicate that the home can
be occupied. That’s the certificate of occupancy. In some cases, the certificate
is issued without everything being complete, particularly exterior work like
But of more importance to you is that some municipalities require builders
to deposit a payment with them to insure that certain improvements, like sod
and grading, are properly in place after a municipality has issued a certificate
In exchange for the issuance of the certificate of occupancy early, the municipality
holds funds to insure that the final grading and sod are installed at a later
time. If the builder does not install it, the municipality won’t release
the funds to the builder.
If your local municipality has held back funds, you can try to work with them
to release the funds to your condominium association upon completion of the
sod and grading.
Finally, you probably have tried many times to contact the builder without
success. Unfortunately, the construction industry offers too many examples of
situations in which consumers are left holding the bag after a builder closes
his or her doors and moves on to another state or opens his or her doors under
a new company name.
If you decide to hire an attorney, you will need to find out how much the whole
process of grading and sodding the property will cost you and your condo association
and what your chances are to recover any money from the builder.
You may find that the cost of hiring an attorney combined with the risk of
getting nothing in return after paying for additional expenses may lead to the
conclusion that you’re betting off finishing the work yourselves.
If you decide to do it yourself, you should at least file a complaint with
the city or state agency that regulates contractors. Some cities require contractors
to be licensed and if the local building department has a complaint about a
particular contractor or company, it may restrict that individual’s ability
to do business in that community.
If you find out that the builder is still doing business in your community
and seems to be in good financial shape, you should pursue the builder legally
and have him or her honor the commitment to complete the work at your building.
Samuel J. Tamkin is a Chicago-based real estate attorney. Ilyce
R. Glink’s latest book is 50 Simple Steps You Can Take To Sell Your
Home Faster and For More Money In Any Market. If you have questions for
them, write: Real Estate Matters Syndicate, PO Box 366, Glencoe, IL 60022
or contact them through Ilyce’s website www.thinkglink.com