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Cancelled construction conundrum

August 11, 2017
By ERIC FEICHTHALER - Real Estate Law , Cape Coral Daily Breeze

Mr. Feichthaler:

Last year my husband and I came to Cape Coral and visited several model homes. We decided to build a custom home with a local builder on a lot we already owned. The contract provided a proposed budget of $250,000, and required a 5 percent deposit ($12,500) to be paid in advance. The builder agreed to prepare architectural plans and engineering, a final budget and agreed to do so within 30 days.

The builder completed its initial work in 40 days, and provided us the plans. The final budget showed $270,000.00, which is 8 percent over their estimate. The contract said they expected the final budget to be within 5 percent of the proposed budget. The contract also said the 5 percent deposit would be retained if we did not go forward with the house after the plans were completed.

During this process, I had found another builder I liked more, so I gave him the plans and he pulled permits. I feel I should get my deposit back since their final budget was much higher than initially stated.

- Emma D.

Dear Emma:

That is great you have decided to join many others who have built new homes in Cape Coral over the past few years. We have many great builders with long track records of quality, and hopefully you have chosen one of them to build your home.

The initial deposit on custom homes are generally designed to pay for the plans and other overhead the builder may have in preparation of construction. Five percent is a reasonable deposit for that purpose. First, the 10-day delay in providing you the plans and budgets would generally be considered reasonable. Second, the final budget coming in over 5 percent also is likely considered reasonable as well. As you noted, the contract provided that that budget was expected to be within 5 percent. On a $250,000 custom home, having the final budget come in $7,500 over the 5 percent amount is not uncommon, and the contract language protects the builder. Due to the fact that the builder did actually prepare the plans and budget, and expended time and expense in doing so, I do not believe you will be able to obtain your deposit back.

I did have concerns about your comment that you took the plans and built with another contractor. Depending on how the contract is written, you may not have ownership of the intellectual property contained in these plans. If the original builders see that one of their custom designs is going up without their knowledge, they may take legal action against you. A full review of your facts are needed to give definitive advice, but it appears you may not want to pursue the builder on this, especially since you received value for the payments made.

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On an unrelated topic, tens of thousands of Cape Coral children have gone back to school this week. We urge everyone to drive carefully in areas known to have bus stops or bicycle riders heading to class, especially during dawn. Always stop for busses with flashing lights, and give our kids a chance to fulfill their dreams.

Eric P. Feichthaler has lived in Cape Coral for 28 years and graduated from Mariner High School in Cape Coral. After completing law school at Georgetown University in Washington, D.C., he returned to Southwest Florida to practice law and raise a family. He served as mayor of Cape Coral from 2005-2008, and continued his service to the community through his chairmanship of the Harney Point Kiwanis Club KidsFest from 2011-2015, which provides a free day of fun and learning to thousands of Cape Coral families, and funds numerous scholarships. He has been married to his wife, Mary, for 14 years, and they have four children together. Recently, he earned his board certification in Real Estate Law from the Florida Bar. He is also a Supreme Court Certified Circuit Civil Mediator.

This article is general in nature and not intended as legal advice to anyone. Individuals should seek legal counsel before acting on any matter of legal rights and obligations.

 
 
 

 

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