You’re building a new home. As the work progresses, you’ve noticed that the materials and supplies your builder is using don’t look like what you and your architect pictured when you worked on the design for the house. In short, the materials look cheap. Are they? And, if they are, what can you do about it?
First, you’ll need to remind yourself of what materials were intended to be used in your project. Your construction loan documents should include a builder’s package that, in turn, contains a line-item cost breakdown, a materials list, and your contracts with the builder. The line-item cost breakdown and materials list are based on your architect’s construction plans (or, if you don’t have an architect, on the builder’s construction plans).
These lists are ordinarily very detailed. Wherever possible, the list will specify the type of material, a brand or authorized dealer, if applicable, size, weight, or shape, and any other identifying detail that will ensure that the architect’s or the builder’s intentions are exactly met.
If materials or supplies appear on the construction site that don’t appear to match the materials list, then ask your clerk of the works (for most jobs, the architect) to confirm that the builder is using the right materials. If you don’t have an architect, then you should ask the bank’s construction loan manager to review the materials and supplies the builder is using.
It is as much in the bank’s interest as your to be certain that the quality and durability of materials and supplies used during construction, as well as their cost, are what they agreed to when the construction loan was approved. (The bank wants to ensure that the value of the property is what it projected when making the loan, so that the completed structure serves as sufficient collateral.)
For the typical residential new construction project, the gain to a builder in using materials or supplies that are different from the materials and supplies specified in the materials list, say, asphalt roofing or hardwood flooring, is not great enough to risk an entire building contract and the resulting loss of reputation within the banking and construction communities. For this reason, you should be able to easily persuade the builder not to cut corners after you and your architect or construction loan manager sit down with the builder to carefully review the materials list.
However, your builder may prove intractable – perhaps it’s a point of pride or just plain pigheadedness. You may have to resort to the conflict resolution provisions of your contract with the builder. The contract may specify mediation or arbitration for resolving disagreements about matters that are not expensive enough to justify litigation and the attorney’s fees that go along with it.
Cutting corners on materials can have a corrosive effect on your relationship with your builder. If you can’t trust your builder to stick to the materials list, you may begin to doubt the builder’s competence or good intentions in other areas, as well. If you’re at the very beginning of the construction process and you've lost confidence in your builder, you may want to talk to the bank’s construction loan manager about replacing the builder with another one.