View Full Version : Licensing and Quality of Construction
06-27-2004, 11:06 AM
In another thread Dick and I are in a pissin’ match over licensing for contractors. Now being a homebuilder I am referring to the licensing of homebuilders, not electricians-plumbers-HVAC people who are and need to be licensed, but just plain ol’ contractors. Dick seems to think that strict licensing is the answer to all of mankind’s problems, I frankly don‘t have a strong opinion either way except to comment on the way things are, not the way things should be.
The main reason licensing is not a big issue to me is that there’s is nothing I can do about it, and I really don’t see it as a solution to a problem, primarily because I DON’T THINK THERE IS A PROBLEM! In fact, I think, except for a couple of areas, houses are built better today than at anytime in our history. Of course there are exceptions, I’m sure someone can point out some sloppy construction they’ve seen, I know I can, but I contend on the whole homes are built better today than 50 years ago.
My challenge to Dick and anyone that wants to answer is this:
1). Give me an example of a state where strict licensing for builders has made a real, tangible difference in the quality of construction.
2). Tell me if I am wrong in my opinion that homes are built better today that 50 years ago. I’m sure someone can point out one or two areas where this is not true (I can), but I mean from an overall standpoint.
If someone could give me an example where licensing has made a difference in the quality of homes being built, I say so what. What am I going to do differently tomorrow because Oregon has a strict licensing law for homebuilders? I am going to continue to build new homes, I am going to continue to sell them, if laws change here I will conform, life goes on. Does it make a hill of beans difference to me how laws are in another state? No.
06-27-2004, 11:37 AM
I don't know that licensing makes much difference, especially in a state like WA where you just sign up.
As far as the '50 years ago' thing goes, I'd venture to say that there are tons of materials out there today that are designed to make building cheaper, easier, faster, and shorter lived. Some things have improved--I like romex better than knob and tube wire, and I like plywood sheathing more than board sheathing--but there are tons of cheap, plastic, glued-together-sawdust kinds of products on the market and I try to avoid as many as possible.
I was watching a guy put a tiled shower in a $2M house the other day, using Denshield. No poly or felt behind the board, just slap it up, seal the screw holes, and it's good for... 50 years? 5 years? 5 minutes? Oh no wait, make that ten years because that's the new home warranty period. You couldn't give me that stuff.
I'd also venture to say that a lot of today's tradesmen are less skilled than those of the past. Maybe I'm just romanticising it, but it used to be a respected career path to be a tradesman. Now it's what you do when your PO says you have to get a job or go back inside.
06-27-2004, 11:46 AM
Allan, shouldn't that state that you and Dick are in a pissing match again (Or maybe even still). LOL
IMO the only single thing that can and will improve the quality of construction is competition. In heavily regulated states the consumer is well protected by the state and the contractor immediately has the credibility of the state built into his business. Therefore he must be good if he is licensed by the state. Nothing could be further from the truth.
Several years ago our State Home Builder's Ass'n had a 5 state convention. Washington, Idaho, Oregon , Montana and Alsaka. We all had a good time and the golf was great. One day at lunch we had a discussion about the licensing/registration laws in our states. Montana was absent. Washington and Oregon have contractor registration, Alsaka has very onerous licensing program and Idaho has none. It was determined, by consensus, that Idaho had the least amount of problems with contractor/consumer relations. Items such as unfinished work quality of work, payments and liens were all discussed. WA and OR had the second most problems and Alaska with it's strict rules had the most problems. When we allow the government to "protect" the consumers we in fact make the situation worse. We all pay the price, in more ways than one, for addditional burdensome regulations.
My vote would be to get rid of all licensing/registering and let the consumers decide, thru free market competition, who are the best contractors and who should get the most work. This would not be a perfect situation but I feel the best over long periods of time.
Thomas O. Maynard
06-27-2004, 11:58 AM
I have built homes in New york state, PA., Utah, and now Montana, Utah has a relitively strick lisc. program.Having built in states with out lisc. and in states that require lisc.I would say
yes lisc. does seem to improve the level of quaility.
I personaly feel however, that to work effectivly though that every individual, of every trade working on a construction site test out.
As a general I may never step foot on a site. Testing me would have less of a positive impact on the quaility of a project that testing of these individuals.Also I think it imperative that there be a plans examination/ inspection prosses.
My test in Utah was two part, buissness and law, and code or science related. Of the twenty or so testing that day, only a couple passed. Outside after the test I talked with one Individual that did not quite make it. His flustration with the buisness and law portion stumped him. Overhead, Payroll, and work comp. all that crap had him confused. (imagine that?)
Wages seemed considerably better in utah,The quaility overall seemed better, and as far as running a buisness this enviorment seemed considerably better. When contractors mentioned overhead not everbody looked up.
The bottom line here is from a structual and mechanical point the consummer is by far better served in markets that require constructors to be quailified through testing. Obviously the consumer can control the visualy Quailities of a project.
Anoughther point is, I feel I can lower my cost of doing buisness in an enviorment where there is a more stringent quailification prossess as I do not have the ovehead labor of chasing projects that get sold to the inferior producer.
The economical impact of knowing what you are doing in this buissness may be more than this country could bear however imagine if we lost half of our work force just due to ingorance>
As far as the rest of the states with out any testing or lisc. that I have build in, ugly, ugly, ugly. It was only up to the individuals own integrity or the lack of it in many cases.
Just some of my observations.
06-27-2004, 12:03 PM
1) I can't answer this question because I live in a state that's always had licensing, since I believe 1935, so I have no basis of comparison.
2) While I believe that most houses are built better today, I believe that's due to building codes (important to us who live in earthquake country) and not necessarily to licensing. I have worked on old mansions that were built much better than we build today, because the level of craftsmanship was much higher than we have today. These mansions predate both building codes and contractor licensing, but were built in the days when craftsmen took pride in their work. Kitchens are built much better today, because of the better materials that are available to us now, on the other hand baths may be prettier today, but many are not as good because the level of tile work is not as good in most, because of the prevalence of newer, easier to install, products such as backerboard as opposed to mud beds behind the tile.
What licensing does right:
It professionalizes the industry and eliminates some of the poor quality contractors that give the good quality contractors low price competition. It creates a "club" that becomes more difficult to enter and allows the better builders to make more money with less low-price competition. This is also the main reason for licensing doctors and lawyers, to protect those that qualify so they can keep their standards and income up. I am also in favor or requiring both an architect’s, and structural engineer’s seal on any project valued at more than $500, that is pretty much required around here now (at least the engineer’s seal) with our latest codes. It is virtually impossible to get any plans approved under the prescriptive standards of Chapter 23 of the CBC anymore. BTW, I think the IRC is so simplistic that it’s a joke compared to the UBC/CBC.
What licensing does wrong:
It gives the public the false impression that anybody licensed is just as good as anybody else that is licensed. I have gotten the comment in the past: "Why should I pay you more than Joe Magee? He has the same license you do." This is not as important in spec housing, because the consumer can see what he is buying, in fact as I have said many times before, I am in favor of eliminating the licensing of spec home builders. If someone wants to buy a lot and build a home, then the public can buy it on the open market, just like an existing home, we have building codes that supposedly control the hidden facets of the house (although I am in favor of eliminating the bureaucracy of public inspection and going to private inspection, preferably by the architect who carries liability insurance, since public agencies are immune from liability due to the doctrine of “Sovereign Immunity”).
It creates yet another bureaucracy populated by civil servants whose only goal in life is a steady salary, medical benefits, and that all-important 100% (or more) of last wage penison at 50-years of age. Public servants are risk-adverse individuals who have no business playing policeman with out lives, that's one of the reasons I do pro-bono work for the state license board, to bring the perspective of the working industry to the table.
06-27-2004, 02:51 PM
Peter, I agree 1000% with you, competition is the American way of maintaining quality. I may be a little burned out after 30 years of this meat-grinding profession we call construction, but I eat-drink-sleep building houses (OK, I admit I’m no fun at parties), and my focus is on how I can build better than the next guy. I am always trying to improve quality because I’m afraid my competition will catch up with me. Competition is much more efficient at quality control than any gov’t regulation (licensing). .
David, I mentioned there were two areas where I thought homes were better 50 years ago than today, and you mentioned one of them: craftsmanship. Today's’ workers, while still some great talent out there, is just much more production oriented and paid less than previous generations. But that’s just the reality of the world we live in today. The other area: quality of all wood products. Lumber in particular just isn’t what it used to be, wood isn’t dried like it should, new growth vs. old growth, lesser grades have become more acceptable. Of course one reason for this is there is just so much more construction now, it’s hard for growers and mills to keep up with demand. Having said that, structural engineering has improved tremendously so that probably more than compensates for the lesser quality wood. How many homes built in the 30’s-40’s-50’s had structural steel components or glue lam beams or solid plywood sheathing?
Dick, I am glad you agree with me on this, you are finally coming around to my way of thinking. Yes, codes have done a lot. Screw licensing, some of these small towns I build in have unbelievably tough building codes.
06-27-2004, 03:42 PM
Maybe it is not licensing but rather some other type of "something" to control builders/remodelers. Here in the Northeast (MA) just my opinion, but the licensing system here is a joke. The license you need is called a "Construction Supervisor", it is an open book test, pass it and you never have to be tested again, as long as you keep paying your licensing fee to the state(revenue maker) they are happy. The other "license" the State came up with is called a "Home improvement" license(again, revenue maker) which you are supposed to have to pull permits to remodel. The joke is if you have a Supervisors license, you are granted the Home improvement license free, if you don't have a supervisors license all you have to do is pay $100.00 and you have a home improvement license. The licenses are an attempt to some what control legitimate contractors, also, you have to show proof of workers comp. to obtain a building permit. The easy way around that is a lot of "scumbags" who think they are builders/remodelers just have the homeowner pull the permit and avoid the license and the insurance all together anyway, but that is probably for another thread.
Thomas O. Maynard
06-27-2004, 04:40 PM
The reason you are no longer fun at partys is be cause you have lost your respect for anything buy yourself. Allen, it is all about YOU! No wonder you did so well as a clone to the builders "20" "the me club" of America) (the NHAB). I bet you keep your close on when they open the hot tub? Not Dick! it is every which way but loose with him.
Dick is probaly is out doing some good honorrable deed right now, at 7:00 mass, helping an elderly lady across a streeet, Teaching sunday school, or offering a better soloution to todays construction related issues, "Good men" never stop or rest, other wise he would be all over you.
It is obviouse to all readers, you have built your buisness on the backs of others. They who slave to build your volume, thier compensation? (nothing) . Only some delusional statement from you, related to how in the lose of time so do the salaries of those who build your monument go with it!
Thomas O. Maynard
Author of "Team work for the building of better homes, Interity, Honesty and Value, (it is about "US" )not just about me")
06-27-2004, 04:44 PM
“Licensing eliminates some of the poor quality contractors that give the good quality contractors low price competition.”
What states (CA excluded) have any kind of licensing with real teeth in it to keep out poor quality contractors?
You mentioned that states you’ve built in with licensing had better quality homes built, can you give a few examples of specific things done in relation to construction that aren’t done in the non-licensing states?
By the way Tom, I’m going to ignore your last post and just assume that you are having a bad day. It’s really not worthy of a response.
06-27-2004, 05:52 PM
Its a shame you need to isolate yourself rom nahb. Everyday of the year NAHB is fighting to keep you in business regardless or not if you pay dues. There are an average of 400 bills presented evey year to the legislature in va.that impact our business. And every year builders from local assosciations take off work for you and drive to the capital of the state to make sure the glue gets removed from these bills. I know this same situation exist in every state, builders fighting for your right to make a living. If they didnt do this then who is ? You? If you wish credibility then leave NAHB out of this .
06-27-2004, 06:51 PM
Quite why, in a land founded on the principles that government shall have limited and enumerated powers should this discussion be taken seriously. The notion that any tradesman --yes! including plumbers and electicians -- should be granted by the state an indulgence to engage in their business should surely be held in utter contempt by any liberty loving person.
06-27-2004, 08:01 PM
On the MA Construction Supervisor's License, the test is 4 hours long, and last time I took the test a while back, you had to get a score 40 correct out of 50 questions. I recall scoring 45. There are two license levels, restricted to 1 or two family dwellings, and the unrestricted license, which allows work on any building up to 35,000 square feet. The test for the unrestricted license is more difficult than the restricted one.
Granted it's an open book test, but the MA building code is 2, 4" thick books. I've found that when applying for permits in MA, one gets more respect IMHO, from the building inspector vs just having a Home Improvement License. Renewal of the CSL license in MA also requires you take courses in construction to obtain a certain level of continuing education units, as part of the renewal process.
Unfortunately, as mentioned more and more homeowners are pulling (or not pulling) permits and/or hiring contractors with no licensing nor insurance. Another problem I've seen is people with CSL licenses pulling the permits, and having someone else do the work, a violation of the building codes.
FWIW, RI and CT are more stringent on licensing, and require liability insurance, period, or no license.
06-27-2004, 08:36 PM
1). Give me an example of a state where strict licensing for builders has made a real, tangible difference in the quality of construction.
I can see both sides of the issues regarding licensing. Professions are licensed in order to provide some protection to the consumer. The real question is does strict licensing provide any real protection to the consumer? My opinion is, yes it probably does. Are houses built better because of strict licensing? I don't think so.
The way I see it, in states that have strict license requirements and testing, chances are the contractor will probably be around longer to service the customer and it is easier to hold someone accountable. The contractors that pass the business and law portion of the tests have at least heard the term "overhead", so maybe they understand a little more about business and can make a decent living in this industry.
As I stated above I don't think that licensing alone gives the consumers a better product. As an example where I live electricians are NOT licensed while roofers ARE licensed. I don't know this for sure, but I think that roofers are licensed to protect consumers from fly-by-night guys with a truck and ladder, nothing more. I haven't checked for sure, but I have heard that it only costs $250 to get a roofing license. You have to show proof of insurance and buy a bond and you are a roofer.
I live in a town of about 65000 and all that is required for electical contractors is an inspection. No testing, no license, no registration. Do these contrator provide a lower quality product? I don't think so.
By the way, you might be suprised which state I live in, home of the 3rd largest city in the us.
2). Tell me if I am wrong in my opinion that homes are built better today that 50 years ago. I’m sure someone can point out one or two areas where this is not true (I can), but I mean from an overall standpoint.
My fingers are tired, I will answer this later.
06-27-2004, 09:07 PM
State with third largest city? Illinois?
I agree that licensing might offer some protection to the consumer but I also agree it probably doesn’t add quality to construction. But which states even have licensing laws with some real teeth in them?
It seems that cities might have some tough licensing aspects too, I know Houston has fairly tough tests for master licenses for the mechanical/plumb/elec trades.
06-27-2004, 09:26 PM
Don't kid yourselves, licensing was initiated by contractors' lobbies to protect contractors from unwanted competition, under the guise of protecting consumers, just like doctors and lawyers.
Today I went out to see a potential customer, he wants to add 10 feet to his master bedroom, for about a 200 square foot addition. I told him that it was going to cost somewhere between $200,000 and $300,000, or something over $1,000 a square foot.
I explained that I would have to employ a licensed architect to come up with a preliminary design. The architect would then have to consult with the City planner who would discuss incorporating her design ideas into the architect's drawings. After a few meetings with the planner, and satisfying her concerns for the betterment of the community, the City would send out notices, incorporating small versions of the drawings to all homeowners within a quarter mile radius of the home. If no one expressed any concerns we would proceed, but if they did (and the odds are that someone is going to protest) I would send over some carpenters and erect poles around the area of the second story addition and string yellow caution tape around the poles so the addition would be clearly visible from the valley floor. A meeting with the affected homeowners would be held on the valley floor with the architect present, and the architect would make any alterations necessary to mitigate any damages that might be suffered by any homeowners in the vicinity. Once the homeowners are satisfied, if they are, the architect would make a Power Point presentation to the Design Review Commission of the City, he would then incorporate any changes they suggest into the drawings. Once approved by the Design Review Commission I would retain a licensed structural engineer to design the foundation upgrades and shear wall detains to carry all shear loads down to the newly reinforced foundation. We would then apply for a building permit and, depending upon their workload, we should have the approved plans out in a few months. I also estimated the time for the design phase to be 6 months to a year.
What are his choices?
1) Hire me and just pay what it costs. (he did by the way)
2) Look for a cheaper insured contractor. (very few insured contractors will even do a small job like this), but this is his only other viable option.
3) Find an uninsured contractor. (if the house burns down, or falls down in an earthquake, he's out of luck because his homeowners' policy won't cover him for a construction related losses)
4) Hire his own architect and engineers, pull his own permit, as a homeowners’ permit, hire all subcontractors to build the job, and get insurance certificates from each one of them. (on sale he would have to disclose the fact that he did the job without a licensed contractor, probably reducing the sales price more than what I am charging him)
I wouldn’t work in a state that didn’t license contractors, simply because I couldn’t make any where near as much money as I can make here negotiating the bureaucracy, a bureaucracy that limits my competition. I get a high price and pay my men and my subcontractors more money, architects and engineers all make money. Everybody wins, the customer pays more but is assured of getting a good job. When I read on these forums about the low prices that contractors get in other areas, I am appalled that anyone would work for so little money. BTW, I read that a house on Pebble Beach just sold for $6,000 a square foot, I think that’s a new record, we are looking at $1,000 a foot as the holy grail in building now, that is if we could find a lot that they would let us build on.
Thomas O. Maynard
06-27-2004, 09:48 PM
I think you may have jumped in the boat as it passed over the bridge. Had you followed some post from previous threads maybe you would understand my direction.
I have been involved with the local home builders asscociation. As a president for 1 year, board of director for three years, several other commitee positions, attended builders group clubs. (I refeer to them as the greedy 20 club). Participated in stategic planning sessions, I am familiar with their efforts at the state an national levels. I have witnessed their, (our) legislative efforts, I have supported many of them. I am pro building. Thank you nahb,
I have been exposed to this subject for some time and have formed what I think is a Educated opionion.
I have one beef with a specific local issue. This issue has caused our local organization a lot of grief. (greed)
As I stated in an earlier post it is not about the good of all but about the good of a few.
I witness a remark in an earlier post from a gentelman that reminded me of a phone seminar produced at the national level "teaching builders how to get rich"
The dialog and coarse study dealt specifically on how to make the builder prosper. Specific direction was given to how to minipulate your subs pricing. Out sourcing for cheap labor. There were other examples on how to get around paying living wages to ones employees. Eliminating benifits. This relentless dialog of 50 ways of exploiting others for your own personal gain went on for an hour.
Finaly several of our assosiate member (specialty contractors) who paid to attend this seminar finially got up and walked out. In shock and disbelief, what they thought to be a group team business building seminar turned into "Mutiny on the Bounty"
Educational seminar? I was so embarresed I formaly called up these individuals and apoligized. So Andrew I am not just picking up rocks here an winging them aimlessly. I do have some direction. I do appoligize how ever if I have offended you and or the nahb.
06-27-2004, 10:19 PM
First I think homes are not built as good as fifty or even twenty years ago. I can only speak for those built in my area. We only do home repair and maintenance. We rarely work on homes more than fifteen years old and most are less than eight. Worked on one last week that is less than five. These by the way are not starter homes. The main issues I see are cheap materials, incorrect flashing, and moisture intrusion. Craftmanship is rare anymore. Just get it done and get paid.
I think liscensing is good when fair and enforced. I have never understood why they liscense an electrician, but not a carpenter. I am liscened, but it really just means I took that time to fill out some paperwork with a few references. I personally would be ok with stricter liscensing for GC's and builders. Some basic knowledge of building science. construction details, etc. I think it is the same way with codes. The are only good if enforced across the board.
06-27-2004, 10:40 PM
When contemplating the issue of occupational licensing it is important to remember that, above all, we want to do what's best for the consumer. The main argument for licensing is, afterall, to protect the consumer.
Let's suppose we want to ensure that builders are competent by testing them individually, in order to protect the consumer from shoddily built houses. Only those who pass the test will be permitted to build. Those who do not pass the test cannot legally build.
We will consider both extremes -- a very difficult test and a very easy test -- and will see how the consumer fairs with each.
First let's make the test very difficult. The test will cover every single aspect of homebuilding. The prospective builder must know and understand structural engineering, soil engineering and foundation design. He must be an electrician and a plumber and a mason. He must be an expert framer and an expert trimmer. The test is difficult enough that only three builders in state X can pass it. But make no mistake about it, a house built by one of these three builders is a well-built home. The three licensed builders become swamped with work. What happens when you get a ton of work? Your prices go up. Way up. The question now arises, are the consumers of building services in state X better off with only three (high quality) builders? The answer is no. The consumers in state X will now face shortages and high prices. That is precisely what we DON'T want for consumers.
Now let's go to the other extreme. We make obtaining a license incredibly easy. One dollar buys anyone a license to build for ten years. No test at all. Anyone can get a license. Once again we ask, does the consumers benefit? The answer again, is no. But note that the consumer is better off here than he was when the license was very difficult to obtain.
What about somewhere in the middle? What if we make the test difficult enough so that only half of those who attempt it pass? The consumer is still worse off. If we restrict the number of people who may enter a particular business, we hurt the consumer by limiting his choices and raising prices. The moment we restrict even *one* person from entering the field we begin to hurt the consumer. It doesn't matter that we have good intentions. What's best for the consumer is the maximum number of choices and you only get that in a free market -- and that means no occupational licensing.
06-27-2004, 10:43 PM
No I did not follow your other posts and its a shame that one seminar would disrupt an entire assosciation. It happens and I remember when the EIFS mess started, things were a little slow for remodelers and all of a sudden there was this buffet of work everywhere. Unfortunately i was chairing the remodelers council and quite a few members were grabbing 6 figure EIFS repair jobs and the attorneys for the buyers were going after builders in court. Well of course now you have builder vs. remodeler situations , so I know what youre talking about. There are alot of people who post and ask for help here who can get every answer right from the NAHB bookstore except the really specific stuff that this forum can produce. No offense from my post. Dick gets a 1000.00 a foot and makes a living and here a good job is a 150.00 a foot so it gives everyone a good understanding of the entire industry. I dont know Dick Seibert, but he gives a look in to what the future is on this side of the country. We dont have huge comp prices and bureacracy beyond belief nor do we have wages for skilled labor above 20.00 per hour but when the attorneys here figure it all out Im sure that will all change. I am not a member of NAHB anymore but it was the only place to find the right stuff to start a business. I am glad to post here because I enjoy seeing guys starting and asking the right questions and if I can help them skip a few of the bad turns that I took,that is my reward.
06-28-2004, 06:11 AM
I would assume that you believe this applies to doctor's and other professions too. In your example I would opt something in the middle.
I personally don't want a mentally handicapped police officer, a blind school bus driver, or a fireman who is missing both legs and arms. I also don't want a doctor who never went to medical school or a lawyer who lives in a bar, but never passed the exam.
The consumer is best benefited by as many qualified choices as possible.
06-28-2004, 06:19 AM
Big difference between doctors and builders. One is health related with life and death implications, one is the movement of goods and services in a free market economy. I totally agree with Manny, as I think most state legislators do. In fact, Manny brings up a great point in that it’s really not what’s best for contractors (as Dick mentions) but what’s best for consumers. Why don’t we regulate Wal-Marts, or travel agents, or computer companies like Dell or Cisco? Because it’s the movement of goods and services and we want that as unregulated as possible.
Some basic minimal standards are best for the consumer, but those are usually handled by local building codes.
By the way, I’m going to answer your post later about quality of homes today vs. 50 years, ago, I think in almost every area they are better today.
06-28-2004, 06:29 AM
In spite of what Tom says the Builder 20 Clubs have been one of the most successful program ever by the NAHB. I’ve personally never participated but I know some builders that have. It’s a great concept whereby like sized/type contractors from across the country meet and correspond and discuss what’s working or not working for each contractor. You compile your financial information in NAHB format and share it with other builders for critiquement, meet and share ideas, and communicate to just discuss what's working or help with problem.
I have found the resources available from the NAHB for home builders just unbelievable. I know of no other organization that supports and educated builders like the NAHB does. Almost everything I’ve learned about managing a builder company I’ve learned thru the NAHB. I would encourage every builder to belong and partake in what they have to offer.
06-28-2004, 07:52 AM
You are right about the NAHB, they continue to offer many contibutions to the building industry, many of which also help the unlicensed, uninsured and tailgaters only because of trickle down. As a member of my local NAHB it provides me with not only meeting other members, both green and old, but also makes available a subcontractor pool that in itself almost self-regulates because if you are not competant and fair, you basically only hurt yourself. Now as a builder director, I also get to help on a local level make some of the decisions that create the direction our local decides on; charity causes, training programs, etc. Unfortunately I don't at this time have the time to help on a state level.
As to licensing....We have it in Connecticut, and it's not the most stringent effort to protect the owner from the contractor. We have both New Home Builder and Home Improvement Contractor licenses. However, the intention is valid in that you need the proper insurances to be licensed and renew. I am not aware of any recourse if the insurance lapses in between renewing, which is sad. But the one portion of the licensing I do like is CT has a fund a homeowner can apply to for reinbursement of problems caused by "licensed" contractors, when other efforts to mediate or repair fail. THIS IS NOT AVAILABLE TO THOSE WHO HIRE AN UNLICENSED CONTRACTOR!
As to today's quality of homes, there is no doubt in my mind they are better. However, that better is created by a builder's balancing of todays best products and technolgy and the requirement to make a profit to stay in business. Not every buyer can afford the top quality of every item necessary to build a house. As an example I still find it hard to believe that a contractor still uses 2 x 10s for floor joists instead of any I-Joist product. The cost, time, weight, spans, etc., etc...all say stop using something that isn't as good as a product that uses resourses that otherwise would be thrown into the landfill.
06-28-2004, 05:13 PM
I will list areas where I think improvements in homebuilding have been made, feel free to disagree.
1. Overall design is better, homes are larger (even starter homes).
2. Subdivisions are laid out better, many have amenities for families, better drainage.
3. Foundations are designed by engineers, more geotechnical testing, structural fill. When I started building we actually used welded wire mesh!. Engineers inspect now.
4. Frames are also designed by engineers, sheer walls, 2x6 walls, structural steel, solid plywood sheathing, glue-lam beams, etc.
5. Electrical is light years ahead of 50 year old homes, GFI. arch-fault circuits, smoke detectors, bigger wire, tougher code, etc.
6. Plumbing: copper is better than galvanized pipe, plastic better than cast iron (not sure about that?). Tougher code.
7. HVAC-much better, heck in some houses it didn’t even exist 50 yrs ago. Tougher code.
8. Better appliances, better fixtures overall.
9. Hardi products-improvement over wood.
10. No lead paint, other dangerous substances eliminated.
11. Granite counters pretty standard everywhere now.
12. We would all agree homes are insulated better today.
Warranties are better too. Manufacturers on fixtures and appliances give longer warranties, builders must warrant for at least a year, in some cases 10 years on M.S.D. Loans are easier to get, money is cheaper. Probably other things I’ve left out, but since I got involved in mid 60’s I’ve seen a lot of improvement in the quality of homes, I agree with Jim.
06-28-2004, 06:13 PM
I generally agree with you; however, I have worked on many mansions from the '20s that were built with craftsmanship that is unavailable today. I have noted things with my finish carpenter so we could attempt to duplicate them in our new homes. To name just one, the differing shapes of plinth blocks at the base of our door casings. I am sure you have some fine homes in Houston, my attorney is from there, and when he returned form a recent visit he said that he stayed at a friend's house that was so large that he could fit his 5,000 square foot, 3-story California house in the garage of his friend's Houston house. He says what he sees in Houston is some very fine quality on one end, and a lot of junk being built on the other. Apparently there is a double standard in Houston.
I disagree with you on #9, Hardie products. I wouldn't put any of their products on a doghouse. Their tile backer board is no substitute for a mortar bed, As an arbitrator and Expert Witness I have had many complaints on it because the tile follows the studs, and there is no way to keep the tile even and flat without floating a wall with a mortar bed. I am also seeing failure at 15 years in showers that are used on a daily basis, with water saturating into the surrounding sheetrock as the backer board fails to dissipate the water. Most of this is occurring when the stupid TC recommendation is followed to caulk the bottom joint of the tile, this effectively seals the water into the backer board and causes failure. There siding is pure junk, it expands and buckles on the walls, requiring caulking in the joints, and then the caulking has to be dug out and replaced every few years as it dries out. Fibercement has failed miserably as a roofing product, actually soaking up si much water that it is collapsing many roofs; if it has failed on roofs I don't think it is acceptable on walls. There are now complaints from installers coughing up blood, and the legal industry is watching it as possibly the next asbestos gold mine. It's a cheap substitute for wood, totally unacceptable in my opinion, and I tell that to courts when builders install it. I know that second growth wood is not anywhere near as good as first growth, but I still prefer to stay with redwood and cedar no matter what it costs. Hardie products *may* be acceptable on housing under a million dollars, but certainly not on anything nice. The example below is on a $700,000 PUD. Most of our design review commissions require real wood or stucco, because they think fibercement degrades the community. I have been contacted by the head of an Historic Preservation committee in Portland Maine to get help in forbidding the use of fibercement in the restoration of the older homes. I am doing this one for nothing because one of the houses in question is the house I was born in! I bet you didn't realize that there were any buildings that old in this country.
Below is a picture of Hardie siding in a case I am now involved in, I hope the nail the cheapo builder good on this one. The thumbnails below aren't very good, try this: http://www.fototime.com/D479306A9955D6D/standard.jpg
Now don't tell me you would install warped, buckled stuff like this in your homes would you?
06-28-2004, 07:00 PM
I will try to reply as briefly as possible. First let me say that I can only testify to what I see everyday. Sure the houses look and function ok for the first year or two, but after that they are a repair company's dream.
1. Design in most cases suck. Very small overhang on homes especially two story allows water to drain down the side of the home especially over the windows just looking for a place to go in. Roofs are steep and extremely cut up. A flashing nightmare and five times more costly if a repair is needed.
2. I agree subdivisions are laid out better, but they have to have common areas because the yards are so small. The amenities certainly are nice.
3. Engineer's don't inspect around here only the building inspector. Lots of soil and drainage problems even on larger homes. Very few houses on conventional foundations and or deep piers.
4.OSB sheathing, grade C framing material both suck. Glue lams and other advances are nice, but to me more of an advance of technology not craftmanship. Something has to be installed properly for it to be better.
5.Electrical is generally ok. Mostly because of strict liscensing and tough codes. Again most of what you have listed is driven by new technology.
6. Copper is better than galvanized. Pex is the new wave and we will see what the future holds for it. Cast iron was good, but a pain to repair. PVC is real nice and does last a long time. I agree with ou on this one. Also an area where good codes and liscensing make a difference.
7. HVAC is more advanced, but with the new mold problems I am not sure if anyone is better off. I do like the fact that you can zone a house and only pump air where it is needed.
8. Appliances and fixtures have more features, but better might be a stretch. My grandmother had the same refrigerator for thirty years. Your lucky now to get 15 out of one. Not to mention the fact that it takes a computer programmer to work on them.
9. Hardi products are an improvement. Along with new exterior PVC trim, fiberglass doors, aluminum clad windows, triple pane vinyl windows, etc. I agree with you on this.
10. We did get rid of lead and asbestos. God only knows what all these new things will cause. But I agree that the goverment has placed stricter testing standards on products installed in homes and it makes a difference.
11. Granite is common, but not in every home. Formica is still a great product for the money although it doesn't look very good.
12. Most homes have alot of insulation in them. Whether ornot it is installed correctly greatly changes how good it is. I personally like cellulose.
13. Warranties may be better on products, but do they really mean anything. With all the fine print I doubt they do. Thirty years ago you didn't need a ten year warranty on your water heater. It was going to last at least twenty years. Same on appliances and fixtures. I think most warranties on products are advertising gimmicks. Warranties on homes in general have gotten better, but only because the goverment forces it.
Again I think alot of the things listed are advances in technology. Whether or not they make a house better is determined by there proper installation. This is where lack of craftmanship shows up. Lets not forget EIFS.
06-28-2004, 10:27 PM
Regarding the Home improvement contractors license, I have had mine renewed at least 3-4 times already, never had to produce any credits or continuing education, infact the last 2 times I renewed with my fax machine and was mailed my new license for free. I don't think I am doing anything different than anyone else. I still think the whole process is a joke, granted the 6th addition of the MA State building code is 4" thick, it is still an open book exam. If you are any type of student and are at all familiar with the code book, you can find the answers in a heart beat, lets not make it sound like rocket science.
Thomas O. Maynard
06-28-2004, 10:44 PM
The Quaility of todays homes:
If it were not for my involvement in this industry for 25 years I may not be abble to analyze the changes over the past years.
Having worked as a carpenter then a master carpenter since in the 70's I have seen the changes in the technical ability of the staffing of constuction projects fade considerably.Inversely I have seen a considerable increase in the profitability of todays builders.
More buisness minded individuals have entered this industry A lot from different walks of life. They may not know how to build a home but they know how to make money doing it.Belive me these individuals have a firm grasp on what it takes to make money.
Yes, tecnology has improved immensley over the past several decades. The market is constantly seeing an introduction of new products.
We have integrated a bettter desing prosses. Planning prosses. Inpections. all cost that have to be burdened somewhere.
Homes have a greater deal of componets that of homes some 30 years ago Mechanical and structural changes are also ever changing. Hvac, Whole house ventalation, Indoor plumbing, Door bells, Bidets,(some with warm water) Media rooms, faux finishes, Granite, Gold, Silver, Hot, Cold, Soft, Spaciouse, Plush, etc. etc.
Our grandparents may have had none of these, As Practical, hard working people, less wastefull than todays culture. Many of which if alive today would surly question the practicallity of such products. Form, function and durability were elements of their era. None the less we continue to evolve.
Andrew makes a statement about the perfomance base deficiancies in todays homes from the stand point that the technicians of yesterday are gone. A valid point.
Why have we loss the Quaility, and replaced it with Quanity?
To afford these luxuries And expanses in spacealy quainity we have had to find a source of revenue to fund these additional creature features. Or use a series of cost cutting measures to lower the direct cost of the projects we build.
Where does this revenue come from come? The quaility fund, Essentially, the labor sorce used to construct todays projects are also the ones funding them.
The use of marginally skilled & trained staff has been placed in the positions where years ago were a compentant skilled work force that brought a stable, reliable quaility to the homes being built. Construction Employers have failed to impliment good educational programs and financial incentives to attracted good people.
30 years ago the trades was a proffession of choice. A carer that required a decipline, commitment, and desire to be a master of ones trade. A journey of many years.
The "economy of scale" is prevalant as Allen states, in todays homes, larger more coplex in features and design. Yes this is true. The burden of affordability once the sole burden of the individual('s) name who's mail box set directly in front of a given home, has been transfered to those down steam of the builder. Subs and Employees now share This financial burden in the form of inadequate salaries. Recent a popular financial magazene paid focuse to just this subject.
As an additional burden, today the lost of percieved quaility and the legal ramifacations associated with it has effected the cost of all goods and servises. an increase by some (20%-25%). if this is true a $ 200,000.00 home would be burdened by some $35,000.00. Does lisc. of contractors help? good question.
Are home built better (not bigger or more complex or with more creature conforts) we are asking are they built better than years ago?
06-29-2004, 05:56 AM
Thanks for your post. You have been in construction longer than I have been alive so your opinion carries a little more weight.
I totally agree with you. Homes are nicer, fancier, larger, more complex, but is the average homeowner better off. I personally don't think so. I rarely work on a home that is more than fifteen years old. And when I do it is rarely poor craftmanship, but lack of maintenance that is the cause.
06-29-2004, 08:39 AM
I’m going to answer your list of answers to my points. I disagree with you that designs aren’t better (I’m not talking overhangs), I am referring to floor plans being better in regards to how people really live. Older homes (in general) had no imagination, had small closets, tiny bathrooms, no studies/media rooms/gamerooms, were dark with few windows, etc.
As far as ALL foundations not being designed/inspected by engineers, yes, I’m sure it’s not 100% across the country but it’s a lot more than the 40’s-50’s-60’s and the trend is in that direction.
The OSB vs. CDX debate? I actually use solid 1/2” CDX as an exterior sheathing on all of my houses, sometimes I even use 5/8”. I think in all reality OSB is as good as CDX, one is a bunch of veneers glued together, one is wood chips glued together. Neither is designed for prolonged exposure to water.
Andrew the HVAC systems of today are light years ahead of those past, higher SEER ratings, better duct systems, setback thermostats, better designs, and many homes built years ago did not even have “central air” systems.
Codes are stronger, homes are larger, as far as them being “more complex”, I say great, I hope they become even more complex because those complexities are improvements. You can give credit to technology or the gov't or whoever, but in whole consumers get a lot more for their money today.
Andrew, I remember a starter home we bought in 1955. The quality was not that great. A starter home built today is much better that the one we bought in 1955, and I know since I’ve been building houses have improved tremendously.
06-29-2004, 08:51 AM
Dick, I’m glad you agree with me. No doubt there will be exceptions in regards to some of the old cornice/moldings that were intricate and maybe hand carved, but heck, you can buy that stuff today from Enkeboll. You ever buy from them? http://www.enkeboll.com/
As far as the Hardi backerboard, I use all mudset tile, so I can’t comment. But I strongly believe the Hardi siding is a good product. You mentioned redwood and cedar, in my climate those will not last as long as Hardi, I‘ve actually seen even clear heart redwood start to rot in 3-4 years. I don’t use much Hardi siding, but when I do it’s over studs 16” OC with solid plywood sheathing over the studs. I’ve had absolutely no problems with it.
Tom, didn’t follow all of your points, but yes, builders today are business people, as well they should be, after all this is a business!
My point is this, the argument that we need stronger licensing so quality will improve, is not valid. First, quality is not that bad, overall it’s actually better than previous generations. Secondly, there is no proof that licensing has any direct bearing on quality, as pointed out here by others. I am still waiting on a specific example where licensing has had a significant and substantive effect on quality of construction.
I think what would help is strengthening the building codes, they have more impact on construction than licensing. For example, why aren’t window pans (another improvement to today’s homes) required for all windows? I’ve been using them for a while voluntarily and they remove the water penetration aspect of windows almost 100%.
We can debate certain aspects of construction, but the over whelming evidence is that the consumer gets a lot more value for their money today than in past generations (as with many products today), and this is reflected in the sheer volume of homes being built and sold.
06-29-2004, 09:36 AM
I agree, I buy my moldings as well, but I try to emulate older mansions. Thirty years ago I had much better carpenters in a union environment, but have to personally supervise a lot more today because of the less skilled carpenters available to me. This isn't true of most other trades; I actually find the plumbers, electricians and HVAC men to be better today. Painters seem to have totally lost the skills of 30 years ago, I had a German painter that mixed all of his own colors to the owners’ satisfaction, the customers loved him, today all they know how to do is buy pre-mixed colors from a paint store, and most people are less than thrilled with their paint jobs.
I applaud you for using mortar beds behind your tile, and not backer board, this is truly one of the hallmarks of a quality builder and will certainly pay off in customer satisfaction and your own reputation. If you feel you must use fibercement products, try to stay away from the siding and take a look at their shingles, I've never seen a problem with them because they are "spaced" leaving room for expansion and contraction. Anybody that does use the siding should leave gaps at the butt joints and don't fill those gaps with caulking. I don't use caulking anywhere; caulking is a fraud and the hallmark of a poor quality builder. The best of it dries out in a couple of years and has to be "periodically replaced". My biggest concern with it is that it's used by poor carpenters to fill the gaps in poor quality work. If you do use fibercement products, be sure the workers cut it with shears, and don't allow them to saw it. You don't want to get hit with a lawsuit for lung cancer down the road.
I don't think licensing does much for the consumer, I don't even look at it that way, its main purpose is to reduce our competition and allow us to make more money so that we can afford to build better. I'd guess we get about double for a house compared to what you get in Houston, and a large part of that is due to licensing.
06-29-2004, 12:31 PM
There is no doubt that some carpenters (maybe most) of today are not as skilled as in past generations, particularly in the millwork area. It has become more production oriented, but that’s just the world we live in today. But there are still some outstanding carpenters out there, I’ve seen some Hispanic carpenters that are pretty good. And it has become specialized too (framers-millwork), that's taken up the slack. Besides, most of today‘s homes are designed so that the emphasis is not on ornate millwork.
I don’t think legislatures create licensing laws to help contractors and I doubt contractor’s organizations like the NAHB push for them to help contractors either. But I do agree if they are over the top they can increase prices which may help contractors. I'm not sure CA prices are double what Texas’ are but they are considerably higher, and probably higher than most of the country. I don’t think it’s only the licensing that’s added to your high prices, it’s probably the total highly regulated border line socialist gov’t and do-gooders you have.
You mentioned painters quality, painters in previous generations had lead paint to use, made for better quality but of course is toxic. I use to actually supply paint for my paint contractors because I wanted to control the quality of the paint. It seems that every paint supplier has different lines of paint, and I wanted to buy the better lines and didn’t want to worry about them watering it down when I wasn’t around. But just got to be too much hassle, so I went back to them supplying material. What line of paint do you think is best, Pratt & Lambert? Martin Senyour?
06-29-2004, 12:54 PM
The main component of our high prices is the unavailability or buildable land, we actually have plenty of land, but the environmentalists and NIMBY'ers have stopped us cold at this point, and it takes years to get anything approved. I met with an architect yesterday whose specialty is getting things through, he did one nearby a few years ago, had a very hard time from all the neighbors, estimates a year in the approval process, and recommends a court reporter be present at all meeting with affected homeowners to take down notes of what everybody says so the notes can be used in the hearings if the homeowners change their positions. Another major component is the building code requirements for building in Seismic Zone IV, just looking at a house being framed today you can see that it looks nothing like a house did even a few years ago, it seems that there is as much metal as wood in a house today. The legal climate has also caused us to be much more careful about what we do, because you have to plan on being sued if anything goes wrong down the line. Insurance requirements have now become a component changing the way we supervise and build, they are dictating how and what we do now. High prices are good though, the more it costs, the more we make, I'd hate to go back to what we tried to do when we were building for $100 a square foot. When I was starting out I was buying lumber for as low as $20 a thousand and building for $10 a square foot, now lumber is $500 a thousand and we are getting $400 a foot, so it’s all relevant and we do make a lot more money today. BTW, you mentioned recently that you bid one at close to $400 a foot, did you get it? Sounds like you are catching up!
I hate painting, it was a pleasure when I had my "perfectionist" German painter, but now it's very difficult to satisfy people with any painter I can find. Most painters want to use Kelly Moore around here, but I usually specify Benjamin Moore, that is unless the customer wants the lower price.
06-29-2004, 01:10 PM
Hey old timer stay away from Kelly Moore paint, it's crap. Ben Moore has best exterior paint.
Have not heard from the architect on the $350/ft bid, they did come back and change several things and asked for new bids, I didn't feel like spending the time so my lack of interest will probably keep me from getting it. Plus they wanted to use AIA contract, I said "absolutely not, my HBA contract is the only one I will use, and don't even think about retainage."
I don't expect to get the job, which means I probably will.
06-29-2004, 01:25 PM
There is nothing wrong with the AIA contracts, in fact I like them. Contracts are only for going to court, absolutely nothing else, sign it, file it, and hope you never have to look at it again! Contracts don't mean what they say in plain English, legal meanings can, and often are, contrary to the layman's understanding.
An AIA gives the contractor the advantage, because ambiguities are interpreted in the contractor's favor, you use your own contract forms, and ambiguities are interpreted against the contractor. A lawyer's job is to find, and exploit, the ambiguities, and any dumb lawyer can do a pretty good job at that.
The big advantage of AIA contracts is that they neatly break down the work into the 16 CSI categories (like them or not, they are ths industry standard), so when you use AIA subcontract agreements the subcontractor agrees to assume all of your liabilities, relevant to his portion, under your contract with the owner. Of course, there can be, and are, things that fall between the cracks, but it takes mush of the risk out of the project for the general contractor.
06-29-2004, 02:24 PM
I agree with your second sentence. Nothing else. I think it is terribly slanted toward the owner and architect, has retainage which I don’t like, and can be used against you like a club. Have we had this discussion before?
By the way, other ways houses are better today, they are safer:
Safety glass laws
Stair way codes for treads/risers-wall rails-handrails
Motion detectors on garage door openers
Spring loaded hinges on doors house to garage, same for pool fences.
Fire blocking in walls
Thomas O. Maynard
06-29-2004, 03:21 PM
Dick and Allan,
Ther is no disputing the German painters and crafts people had it together. One of the best carpenters I ever had work for me was this old Pa. Dutch guy Named "Dutch", He built one heck of a house. Built a darn nice daughter also. I married her. Now she is a full time professional painter.
06-29-2004, 07:20 PM
An AIA contract is *the* professional industry standard, and the clauses are all well litigated. A contract of your own, or a contract drafted by your attorney, has clauses that are "clauses of first impression", each clause can cost hundreds of thousands to litigate, they litigate such things as whether the clause is contrary to public policy or unconscionable. A simple clause throwing the responsibility for mold over to the owner (like NAHB contracts) can render the entire contract null and void as being contrary to public policy *and* unconscionable (unless there is a clause that states that if one or more clauses are found contrary to public policy, and/or unconscionable, the entire contract won't be thrown out). A sneaky attorney trick is to draft a contract for his client so that it is expensive to litigate, they make a little money drafting them, and make a lot of money defending them (they all know this), a good attorney always advises his clients to use an industry standard contract. Of course, by now I should know better than to try and tell you anything about the law, you know it all (and you were the one that recently told me that my essay proposal on the legal part of contractors' examinations was overkill).
What's so bad about retentions? It is the industry standard in commercial, industrial, and architect designed residential construction. A responsible contractor is capitalized enough to carry the retentions, and he has the huge advantage of passing the same retainage percentage downstream to his subcontractors. 99% of the problems I have had are due to subcontractors; so holding retentions on my subcontractors is a huge advantage to me. Only the small, undercapitalized (Mickey Mouse we call them) subcontractors will object; to the adequately capitalized subcontractors retentions are a fact of life, and they accept them without question. If your subcontractors object, you probably don't have experienced, adequately capitalized subcontractors.
06-29-2004, 08:02 PM
I think we’ve fought before about the AIA, I’m really not up to it now but I will say I would not use it. As far as retainage, I’ve done it, I don’t like it and I’ve made a decision to not enter into contracts (AIA) where there is retainage. I would guess that 90% of the contract homes built in Texas are non-retainage.
Dick, subs will not stand for retainage, and I would not even ask one to, and I would not consider a sub “Mickey Mouse” because of this. Margins are slim for all of us and to wait 9 months for you profit (whether as a gc or a sub) in my mind is not fair.
06-29-2004, 08:29 PM
If you refuse to sign an AIA contract containing retentions, you pass on all architect-designed work. It would be nothing short of malpractice for an architect to agree to remove the retention clause because of his fiduciary duty to the owner, and he would probably be held liable for the contractor’s malfeasance, or misfeasance. What protection does the owner have if something comes up during the retention period and the contractors have been paid in full? If the owner isn't holding some money, what happens if a subcontractor or material supplier files a lien? Retentions are just plain good business and an architect would be remiss if he didn't require them.
I wouldn't disagree with your 90% figure in Texas, by now we all know that things are done differently in Texas. The figure may have been that high in California as well, but any bank financed project has a final payment of 20% held for 35 days following final acceptance by the owner; however, that is harder than the standard 10% retention because it can't be passed downstream to the subs like retentions can. If a subcontractor wouldn’t accept retentions I would dismiss him as non-professional. Frankly, I think most of them just pump their bids up 10% anyway, so the retention money is looked on as a bonus.
I only passed on one job with retentions. There was a Flight Service Station going out to bid at the Oakland Airport and I really wanted to build it for bragging rights to all my pilot friends. I passed though, the landscaping was included in the specifications and there was a one-year retention clause, I couldn’t see myself replacing dead pansies for a year.
We are going to be seeing a lot more retentions, simply because an architect's seal is virtually required now, since a structural engineer's seal is required and most SE's won't work on plans not designed by an architect.
06-29-2004, 09:06 PM
I'm able to get an engineer to do structural on non Architect designs, and I'm sure its not uncommon in our area. I think your "California" (Arnold's Pronunciation) is even more "California" than my area.
Thomas O. Maynard
06-29-2004, 10:08 PM
I think a lot of contractors accept retainage as a part of conducting buisness today.@ 10%?? On my draft I like To see 5% retainage with sign off at each draw. The sign off should suggest "in contractual language" a satisfied acceptance of work for each phase. With previouse retainage paid in full upon acceptance of "substaincial completion" of following sequence of work( I think I Know what I said )?? what do you think??
06-29-2004, 10:10 PM
I have heard engineers argue about this a lot. Their licensing statutes forbid them from stamping any plans that were not: "Prepared under their supervision and control". Most engineers take this literally and refuse to seal anything that hasn't actually been prepared by them, or by their office (note that the architect prepares and seals the “A” sheets, and the SE prepares the “S” sheets, the SE doesn’t seal the “A” sheets). Some other engineers question the semantics of "prepared under their supervision and control", claiming that once they review the plans, do the calculations, and return them to the whomever drafted them for modification, they are supervising and controlling the preparation of the plans. Personally I agree with the former interpretation, not the latter, and believe that the engineers should limit themselves to working on architect-designed plans, or at least actively supervise major modifications of those plans before they affix their seals.
Fred asked me a question in a PM, and I am answering it here for all to see. Fred asked if he should sign an AIA contract that contains the AIA's standard Indemnification clause.
The answer is unequivocally YES. Don't even question it, just play dumb contractor and sign the damn document without reading it. If you start crossing out clauses you don't like (if they even let you) then you have been presumed to have read and understand everything there. You want this to be an adhesion document, a document that was presented to you to sign without the opportunity to have any input into the document. You have all the advantages of the dumb consumer if you just sign a document presented to you, particularly an Industry Standard document. If there is litigation (the only thing a contract is [or should be] used for), you get all the advantages, everything becomes ambiguous with a smart attorney, and all ambiguities are construed in your favor by law. So, sign the dumb thing and build the damn building, if you ever see it again it will be in a deposition and you will win in the majority of contract dispute issues.
If you succeed in knocking one clause out of that contract, you will have defeated the adhesion contract status of the document, and you will probably lose because the wording in the contract favors 1) Architect, 2) Owner, and 3) Contractor, but if you sign an adhesion contract the advantage goes 1) Contractor, 2) Architect, and 3) Owner.
06-30-2004, 11:48 AM
Dick, things are not different in Texas as in other states (except maybe CA), we are very typical of any robust state with a healthy economy and a good housing market.
I don’t like the AIA contract, I’ve managed quite well using our HBA contract for several years, it has served me well. We have 300 builders locally using it. I also disagree with you that a contract serves no purpose. My contract deals with several substantive issues very relevant to building homes.
Subcontractors will not stand for retention for the length of the job (several months).
Tom, your concept of retention (5% until the next draw) is not what the AIA calls for, it’s 10% until the job is completed, maybe even 30 days after completion. Take a 12 month job, maybe a new house, 1 million$, homeowner keeps $100,000 of your money until after they move in. I’ve done it, never had a problem, I just happen to be in a position where I don’t have to do it anymore so I choose not to.
06-30-2004, 12:08 PM
Whether you happen to like it or not, retention is the industry standard for all architect designed work. Subcontractors that do this kind of work accept it as a fact of life, they may not like it, but they have to accept it. I doubt that you could get many architects to agree to allow you to not use the AIA forms, or to cross out the retention clause if you did use it.
Putting so-called "substantive" issues in a contract usually clouds the legal issues, better to prepare a separate document and incorporate it by reference into the contract. Contracts that contain clauses of first impression are extremely expensive to litigate.
06-30-2004, 12:24 PM
You know Dick, we really have a very small sampling of contractors of any type/size that participate on this forum so I doubt we can answer this question with any accuracy, but I would bet you a good bottle of CA over-priced wine that 98% of residential subcontractors in this country will not do retention of 10% of their money for 8-12 months.
First of all, a lot of custom work is not with AIA architects, in fact most isn’t. My architects typically present the AIA, but take the position that contractual issues are really between the parties.
Thomas O. Maynard
06-30-2004, 01:07 PM
Dick & Allen,
I think your right about the small sampling of contractors on this post. Somthing else, given the diversity of contracting services among this post, I bet there are very few that have worked under an AIA contract.
Lookes like a good canidate for a new thread. Contracts.Short form fixed, Medium form fixed, Long form fixed,Cost plus a fixed fee, Cost plus a percentage,Labor only agreement,Short form sub contractor agreements, And on and on. Right down Dicks alley.
06-30-2004, 01:35 PM
In our area architects design most work now, because you have to have a SE's seal on the drawings to get the permit (a small square box would be about the only building that would qualify under the prescriptive standards of Chapter 23) and most SE's won't seal drawings that aren't prepared by an architect. The licensing board that licenses engineers prevents them form sealing drawings that are not prepared under their control and supervision. As the developing areas (as the building inspectors refer to them) come into the 21st century they too will have these requirements.
Both your and Tom's comments about the small sampling on these forums is certainly true, it amazes me that we have such a small representation form contractors that do high-end architect designed work. Maybe the guys that do high-end work are too busy to fool around on these forums? It's too bad that we don't have more input from the types of contractors that really build professionally designed projects. We have very few contractors that even do commercial and industrial work, I had hoped that when Bob took over his forum that it would attract commercial and industrial contractors, but it hasn't happened. I think the term “light construction” has something to do with the participation here. I don't see much participation from Jason and Richard anymore either, our only two architects (both Bay Area architects by the way).
06-30-2004, 02:10 PM
I have absolutely no interest in commercial or industrial work, if there was a big interest or participation it should have it's own forum. I wish there were more pure 100% homebuilders here, I don't care if they are custom-semi custom-tract.
06-30-2004, 04:06 PM
And some people have absolutely no interest in custom home building, you are in a minority here. The vast majority of participants are residential remodeling contractors.
Monday I met with the architect in our area that has the best track record, among his peer group of other architects, of getting projects approved. I asked him about new custom homes (I have seen his presentations when I served on the Design Review Commission for the City of Piedmont in 1979, and they are good), and he says he hasn't had a custom home to design in 2 years, and doesn't really anticipate getting anymore, all of his work is now commercial buildings and residential remodeling.
As a custom home builder you are as much of a minority as the commercial and industrial builders. Dollar-wise, I have done a lot more commercial and industrial work in my career than custom homes, although, I must admit that my first love is building high-end, architect designed, custom homes. We just aren't allowed to build many of them anymore.
06-30-2004, 05:24 PM
You keep saying you aren’t “allowed” (what does that mean?) to build homes, but who’s building those 100,000 in CA I’ve read about? That’s a million homes in a decade. I’m sure deep in the heart of San Francisco there are few lots, but you live in a big state and from what I’ve read there’s a lot of residential development going on.
I realize I am in the minority here, most of the other contractors here are remodelers, with a few subcontractors and repair/handymen thrown in. I would think there’s more similarity between remodelers and homebuilders than remodelers and commercial/industrial contractors. If there were enough participants an ideal forum would be to have a site for each sector of construction.
06-30-2004, 05:38 PM
Of those homes you read about there are only a handful of custom homes. Those are merchant built tract homes that are built 100 miles out on farm land that has taken 5 to 20 years to get approvals, and then sold off in muilti-million dollar chunks to tract builders. The last new home I built took 8+ years to get the permit, many builders here die trying. Steve Price, one of our better builders on these forums, recently gave up and moved to Phoenix, saying it had become impossible.
City of San Francisco? To get anything through there you need a "Permit Facilitator" to navigate the system, their minimum fee is $10,000. The average architect doesn't stand a chance, he doesn't "know" the right people.
06-30-2004, 07:21 PM
I am a State Certified General Contractor in Florida which requires passing a 2 day test (open book). The State is mostly interested in your personal finances as well as the company you are going to qualify. If you have past credit problems related to construction you will be held up from being licensed. Quality is more of a professional thing that most licensed contractors strive for but there are many licensed contractors in this state that dont have a clue what quality is.
07-01-2004, 12:56 PM
I apologize for not posting my reply sooner. I agree totally with you that there are amazing new products on the market in the last several years and that these products for the most part are a huge improvement over things put in homes built twenty - fifty years ago. I also agree that codes and other forms of regulation have gotten much tougher and have helped to build safer homes to consistant standards. This is one area I think the goverment has a vital role in.
I have worked on new homes from the ground up, remodeled homes 20,30,50,even 80 years old, been in the repair business for the last couple years. Again I can only speak form my personal experience and about the area I live in. Homes today (the avearge home) offer a lot more technology, better interior design, and more creature comforts than any home in the past. However, craftmanship, attention to construciton details, and overall quality is not near the same as it use to be.
07-01-2004, 01:10 PM
I forgot to answer one of your other questions about liscensing.
Liscensing of any profession is an attempt to to keep the standards of that industry high, ensure that only qualified individuals are allowed to perform a certian task, and a way to hold those individuals accountable if they do not meet those standards.
Maybe comparing doctor's and builders is not a good example. However there are many professions that move goods and services that require liscensing. Stock brokers, real estate agents, car dealers, etc. Again the same reasoning as I mentioned above.
Good common sense liscensing would help the industry not hurt it. It would also protect the consumer by only letting qualified individuals perform the task. I also believe that part of applying for that liscense would be proof a liability ins. and workers comp (where applicable). Certificates would be shown every year at renewal. It doens't have to be complicated or intrusive to hold people to certain standards.
I have actually talked to the president of our local HBA and some of my local legislators and they agree that liscensing for homebuilding and remodeling needs to be improved. In fact one of our local builders from the southern part of the state is now president of NAHB. Not sure what his take would be.
By the way, I also use window pans anytime we do a window replacement. Should be part of code.
07-01-2004, 02:31 PM
In my opinion all windows should have nailing flanges on all four sides, and in such cases sill pans are a waste of time and money, because the flashing seals the entire window into the code mandated weatherproof barrier. Many doors, sliding or swinging, don't have flanges, in which case we cut kerfs in the top and sides and install a soldered sill pan in the bottom. I recently got some Canadian wood window named Loewen, they had flanges on the top and sides but not the bottom, so we installed a sill pan under them.
Sill pans must be soldered with 4" minimum legs soldered up the jambs to do any good at all, those prefabricated slip-joint pans that you put sealant into the slip-joints are only good for a couple of years, because sealant is only good for a couple of years.
Some window manufacturers still manufacturer windows with no nailing flanges at all, they should be outlawed, they worked in the old days when the walls could breathe, but now that we seal our walls up with plywood, and trap water in the insulation, the '30s (and prior) methodology of letting water into the walls to be caught in a sill pan no longer works.
07-01-2004, 02:31 PM
If you look at the totality of what consumers receive today in value when buying new homes it far exceeds what previous generations received.
I see no direct correlation between licensing and quality of construction, that was my original point of this thread. I’ve asked for examples of where licensing has improved quality and in what specific areas, yet to see an example. I am certainly not against licensing, I just haven’t seen an instance where it’s helped.
07-01-2004, 06:49 PM
I don't think there is a good example of a state that does liscensing well enough to effect the quality of homes being built. I think it could be done and should be done.
You original statement was not that homes are a better value than years past, but that they are built better. That was what I disagreed with and I think stated my point clearly. I personally don't think buying something that is built incorrectly is a good value.
07-01-2004, 08:01 PM
Guess it depends on what your defintion of "better" is, but homes are "better" today any way you look at it. But hey I've only been doing this since the mid 60's so what do I know.
07-01-2004, 09:49 PM
I see no direct correlation between licensing and quality of construction, that was .........
Licensed or unlicensed.
Sometimes we do well, sometimes not that well.
For as long as our intentions are good the end result will turn out fine. True professionals stand behind their work.
I bet that the guys who built that bridge knew their trade well.
Someone misread the print or the engineer hit the wrong key on his computer while designing the bridge or the inspector didn't catch it and the bridge support almost ended up between the two bridges.
But, because of the great respect I have for the people who design and build our bridges and freeways I give them the possibility of the doubt. I want to believe that the bridge support is there "by design" not by mistake.
Besides that, we all make mistakes. Sometimes big ones, sometimes small ones.
Click on the thumbnail .
07-01-2004, 10:54 PM
People have drivers licenses don't they? Does that make them excellent drivers?
In my life I have been dissapointed by someone in every professional group that you can name. Doctors, lawyers, clergy, law enforcment - you name it, and I've been let down by someone in those fields.
It just comes down to people. Just because you have a license for something in no way makes you good at it. A quack is still a quack - even with MD, DDS, Phd, LLC, CEO, etc., behind their name. All it means is that they spent a lot of time and money in school. And that goes also for titles in front of their names like "Sargent" or "Father".
There was a time in my life when I gave a professional person a certain amount of blind respect. Not any more. I've seen and been through too much. Trust no one but yourself and keep a good eye on you.
07-02-2004, 12:04 AM
Licensing appears to work out that does divide the contractors into two different categories, those that cannot properly provide for the public as the public apparently so desires, and those that can. It is simply a tax doing what taxes ultimately do, divide and list. How many of us cannot say we did not spend more to stay in a certain tax category regardless of the tax? Unfortunately, the greatest dissenter appears to be the general public with their hiring of the unlicensed. We the contractors become and are simply the players. We are market driven.
When contactors become perfect, we will not need implied or written warranties. The professionals will work together to correct whatever until that time arrive. The rest will run like hell.
Primarily, our remodeling previous work completed by true professionals is great. Ranges vary from that point downward to the basic weekend warrior disasters.
Problems on our homebuilding from the forensics during remodels appear to be when a true building system is violated. As long as a true system was followed through with no modifications, we generally find few if any problems, FYI.
Allan, I looked at the calendar just now. It is indeed the next century. Where did all of those years go? When do we start to claim we knew anything? Do I choose the '50s or the 60s or now? It is probably not relevant anyway because it all depends if we have maintained our education in our selected field, and if we were properly educated before.
Licensing, membership in a related professional association locally, etc all add up to being accepted with some blind trust. You can trust yourself to check them out without wasting time in the yellow pages.
For the most part, I think it hurts the very people that installed the laws in the first place, or in fact the purpose. The free market place appears to sort out things very well. Think about the suppliers you use to compare.
Are the laws necessary? Probably...
In the end, I think the laws have divided the contractors into different groups. Originally, we worked together to be better. Not well, but the trades standards were much higher. Hacks in a hurry did not stand a chance. We could produce well, and quality was just not a concern for the overall view of the GC as it is nowadays.
Do we build and remodel a better home today than we did years ago? I see yes and no for this answer. Years ago, if we built by the 'complete' system suggested, it worked as it does today. Today's building systems are much better. Unfortunately, we cannot clone Ed's standards enough times to gain the competent help that we have to have.
07-02-2004, 07:09 AM
I am not against licensing, in fact I think every group of people in any profession want some standards so their “standing” in their line of work is seen as meaning something. I just don’t think it has much bearing on the quality of workmanship. I think building codes actually have much more impact.
Dick mentioned it gives consumers a false sense of security that all’s well as long their contractor is licensed, and of course this is far from the truth.
07-02-2004, 10:45 PM
This morning I went to the ENT to have a spot removed in the roof of my mouth. My long time ENT has retired (about 10 years younger than me, the lazy bum) and a young doctor had taken his place. While waiting for the Novocain to take effect, I commented on the Georgetown Medical School diploma on the wall, asking him if he was from the Washington DC area. He said no, that he's originally from Houston. With that I had immediate visions of some illegal alien with a rusty knife cutting up my mouth, so I screamed HOUSTON, I don't want a Houston doctor operating on me, they subcontract everything out to illegals; I know, a friend of mine is a builder in Houston and he subcontracts everything out. The young doctor assured me that he was going to cut on me personally, and that he never subcontracted out anything. Allan has me paranoid at this point.
07-02-2004, 11:18 PM
I think we will just have to disagree on what we mean by better.
I could find you any number of people who have been building houses (both with hammers and with pencils) since before the sixties who would take my side. Just a difference of opinion.
I think you make a good point about building codes and quality. I think any valid way of liscensing should require a basic knowledge of building codes and building construction. That is how good liscensing could make a difference in quality.
07-02-2004, 11:24 PM
In our state, licensing is followed by financial responsiblity. Most will place a blank check, (letter), in Nashville. If licensed are not financially responsible, the abused party can surely cash in for a jackpot.
Locally, they are following quality with assurances from licensing when that scant few do insist. If we could get away with doing something by code, I feel we might even have support from many of our customers. They have not gotten the message yet that the codes are designed to protect them. In fact, they appear to resent the codes.
Dick though in may set oddly with you, I moved to all subs because I insisted upon quality. All those that I trained we becoming subs because we could not pay more with the mess going on with WC at the time. As I moved to this new way of doing busines for especially well trained artisans, so we could deliver quality, the only ones left were the drug addict employees whose tools were in the pawn shop or the small sub.
Think about it, quality or druggies? If all your employees quit tomorrow with no hard feelings, and become subs because you could pay no more per, where would you go? I bet you would also go to those trusted individuals that you knew can deliver quality so your tail does not get twisted in a liability. This is exactly how we got to be an all sub based GC. I did not, nor do not now have any patience for a hack in a hurry to buy the next crack or whatever the latest abuse. If it means I have to teach someone to learn the Southern language, so what, I have the quality on the jobsite, and that is the only way we will fly.
At some level, please do understand that we have reasons for considering CA the left coast and therefore, quite unstable where we imagine $500 hammers exist. We have the opportunity to learn more because the apparent prominent line of thinking is so different.
07-03-2004, 12:08 AM
You operate in several states don't you? Do you have to carry different GL insurance for every state you operate within? Are you restricted in your percentages of subcontracting in any (or all) of those states?
07-03-2004, 08:02 AM
Andrew, there are still a few people who think we never landed on the moon, or the holocaust didn’t happen, or that Elvis never died. I’m sure you could find some old geezers who think everything 50 years ago was better than today, but if you look objectively at each aspect of construction (see my previous list) the over whelming majority of them are much improved today than in past generations. There may be an exception or two but as other experienced contractors here have stated, in total, houses are better built today. But, you are entitled to your opinion, I just think as years go by you will see the same continued improvements I’ve seen.
Ode, I agree that quality is actually enhanced by using good subs who focus on one narrow aspect of work. Day in day out, doing one thing, they become specialists at what they do.
Hey Dick, a little rust never hurt anyone, but now that you mentioned it the medical profession has been subcontracting for years. Long gone are the days when you just had a family doctor. Now, everybody specializes in one narrow field, just like construction. By the way, what's wrong with illegal aliens becoming doctors?
07-03-2004, 11:43 AM
If the subs were like Ed, and hired their men by the hour, then specialization could lead to more expertise, but the problem is that subcontracting is used by unethical contractors to insulate themselves from employment laws, and the subcontractors make money by piece working their so-called employees whose primary emphasis is doing the work as fast as possible, to make as much money as possible, as opposed to doing the work as well as possible. I hired some house cleaners and found that something was broken every time they were here, first an adding machine (oh well, throw it away, nobody needs an adding machine any more), then a hard-of-hearing telephone (oh well, throw it away, it's time had come and gone), then a vase (oh well, things happen), then a headset (oh well, they are all build out of cheap plastic anyway), then my $700 toilet seat (the last straw). I came home one day to find three of the girls sitting in the car waiting for the other two to finish up, I asked why they didn't go in and help the others. I found that each girl was a piece worker; one did bathrooms, another vacuumed, another dusted etc. I asked the "contractor" why it was being done this way, and said I wanted to pay by the hour, not the piece, no matter how much more it cost me, she said her girls wouldn't work that way, so I fired them and got someone that would work by the hour. It doesn't work in construction and it doesn't even work cleaning houses.
My old law school Remedies teacher, Brad Seligman, has brought several major corporations to their knees, the largest so far is Lucky Stores, which after his settlement with them was forced into a takeover by Albertsons. He is taking on Wall Mart now, and says he isn't settling, he fully intends to get 600 Billion out of them! After this one gets going he intends to hit them on the subcontracting issue, and if he gets a precedent set on that, I hope I have him convinced to go after the tract builders on the subcontracting issue. The money isn't in building anymore; the money is in suing the unethical builders and taking away their ill-gotten gains.
Evil builders like the Centex's and Pulte's of this world deserve to cough up their ill-gotten gains (and I want part of them!).
07-03-2004, 11:56 AM
The practice of subcontractors subcontracting, while I’m sure does happen, I don’t think is a rampant as you suggest. Granted, it probably does happen and the IRS should go after those that do this, but I would say less than 10% of subcontractors follow this illegal practice. Furthermore, a subcontractor can legally subcontract work. Say an electrician has hourly employees, but for underground service he subcontracts to a separate company who trenches for and installs service lines, that would be perfectly legal. But if he routinely subcontracts all of his work to full time people and pays them contract labor that is illegal.
Dick, you communist liberal. I can’t believe you are sitting on the sidelines cheering for these gouging cheating plaintiff's lawyers to suck billions out of shareholders pockets and destroy American companies who provide jobs for millions and keep our economy propped up. These parasites suck blood out of entire industries and destroy people’s lives, buy off politicians, and provide nothing worthwhile to our society.
07-03-2004, 01:46 PM
Allan, you right wing reactionary, I think carpentry subcontractors piece-working their workers is the norm around here. If Ed is listening, didn't he say that he has competitors that piece-work their employees? BTW, I can proudly say that I have never voted for a Democrat in my entire life, I despise Socialism, and don't even believe in Social Security. Oddly enough, in my area I am considered a right wing reactionary, you wouldn't believe the number of Honda drivers that are flipping me the bird everyday since I am driving the Hummer.
There must be some check on the corporations that suck the life out of communities, whether it's Enron, Wall Mart, Home Depot, or a large tract builder, they steal money out of people's pockets, and it's only fair game that the good lawyers take that money from them. That's how the system works. Don't you believe that the builders that have built those houses on the slab on grade post-tensioned slabs that are settling all over the place should get sued for everything they are worth? Don't you believe that those builders that have sheathed their moldy houses with OSB, wrapped them in House-wrap, and covered them with EFIS should be sued for everything they have accumulated from their inferior building practices?
07-03-2004, 01:53 PM
I think there is more piece work going on down the ladder than you may think. The last house I built (3 years ago)was my own, plumber, roofer, plaseter , lathers, blocklayers, some electrical were all double subbed. I had to dig around to find this out on the jobsite. But when I did find out ,I held these guys feet to the fire on everything. The quality sucked even though these trades knew this was a builders own home.This is an exploiting way for someone to add to their income and they deserve any recourse that happens to them for doing it. Nobody was licensed or insured at this new low level nor did they have any proffessional behavior about them. I did most of the rest of the work myself, I think this thread reminded me why I made that the last time i would represent subs who cant represent themselves and that was the last house I would build. I dont agree with Dicks theory about everyone suing, what would cure a lot of this is to get rid of time and a half pay over 40 in seasonal construction, journymen certificates on job, lazy ass city inspectors check trades paperwork when they inspect jobs, get rid of state registrations and give the money to local permit offices where monitoring can take place, have business license officials go to jobsites ( if nothing else go to the bank parking lots on a Friday afternoon, it looks like they are having a free crack cocaine giveaway out there with money being passed through cars and trucks and workers sitting out there drinking 40s), get rid of the line on a w-9 that allows a social security number if you dont have a tax ID no., W.C. and G.L. need to cross reference licensing and registration and credit scores and allow the legal system to penetrate the builder to the sub on every lawsuit, my three cents worth not in a very good order.
07-03-2004, 02:10 PM
I think the IRS is starting to do this, the last time that I had an IRS audit they audited nothing but the names of the subcontractors and checked my records for Federal ID numbers on them. The auditor then told me that every sub was getting audited for compliance.
07-03-2004, 02:24 PM
I think is perfectly OK for consumers to sue companies for damages, if Pulte builds a house and there is damage due to mold AND Pulte refuses to correct it, then they should be sued. I think the award should be limited to actual damages and attorney fees, and I think Pulte should be able to remedy any defects with third party oversight. That’s part of our law in Texas, and it keeps down frivolous lawsuits and exorbitant awards.
OK, so Andrew you think there is more double subbing going on than I might realize, you gave an anecdotal example. I don’t see it here, but maybe I’m wrong. However, there’s two ways to look at this.
First way: From a strict legal/IRS/tax/employer-employee relationship, if the second sub is REALLY an employee to the first sub and the first sub is paying 1099 wages to an employee to just avoid payroll tax/withholding, then that’s illegal, and I’m all for the IRS going after them to make sure everyone pays their taxes, BECAUSE, that effects me and everyone else who is paying their fair share. And the politicians need the money, but that’s another topic. HOWEVER, it is not my job or my responsibility to enforce tax collection, that’s the job of the Government. In fact, I don’t even think legally I can pry into someone else’s business. The gov‘t tells me my required documentation (941-940-W2-1099-I9) to report and furnish, I believe my responsibility stops there. But don’t get me wrong, I want everyone to pay their taxes because that’s FAIR.
Second way: From a practical standpoint of a builder, if someone is subbing to a sub does it effect my quality or price. If I am doing my due diligence as a quality custom homebuilder, which is to use the best quality subs at the best price, then do I really care if Ed the trim carpenter is subbing the installation of doors to someone? Again, I may not even know his arrangement, but if I’m getting good quality at a fair price do I care? No.
In the real world, at least for me, if I have 5 houses under construction and I use 40-50 subs per house, do I really have time to play detective and micro-manage what my subs do? No. The beauty of subcontracting is that I contract with Ed to do my millwork, I’ve only got one person to deal with, not 15 carpenters. If he is subcontracting out the trim, or if one of his employees is cheating on his taxes, or not paying child support, or running stops signs, or speeding to work, or not flossing his teeth, I may care about these things from just a human and a moral standpoint, but it really doesn’t effect or impact me from a legal standpoint with the government. If it does effect me or my company, that's a different matter, but if the work gets done correctly at the agreed upon price, everybody's happy, why would I care if there are 10 levels of subcontractors?
07-03-2004, 02:33 PM
I knew a builder who thought the same thing and when one of the subs subs fell fell and broke his neck neck he paid through the nose nose 280,000.00 (1984 money)
07-03-2004, 02:39 PM
So are you saying if the sub's sub was the sub's employee he would not have been sued?
That's why we all should carry the maximum amount of insurace we can, I know I do.
07-03-2004, 02:48 PM
What about a company like Boeing that builds airplanes. They subcontract to GE to have the engines built, GE subs to Pratt-Whitney to build a part of the engine, Pratt-Whitney subcontracts out a portion, on down the line. What’s the difference.
I subcontract to a turn-key foundation company. They subcontract to form setters, subcontract to diggers, subcontract to steel sub, subcontract to finishers.
07-03-2004, 02:49 PM
Thats what I was told, i was the framer for the builder and the guy who fell was a sub of a siding sub. I helped this guy move out of his house that he had to sell to pay this mess , wife left, a bad deal all around. My little group of framer peers all learned a lot then at this guys expense not to mention the neck injury , I heard this guy never recovered to be able to function. it stopped me dead in my tracks about subbing out some walls or a box or even sheathing back then to these mini subs...Nobody was being paid as employees without taxes withheld in any of these examples .
07-03-2004, 02:51 PM
I could be wrong but he if had been an employee of a sub, I don't think the builder would have any less liability.
07-03-2004, 02:53 PM
Why should a builder carry workers comp if subs all have it? Thats what happened here, builder had no employees but made everyone carry it. although he didnt have it. A man who feeds his family through framing or whatever falls and ends up drooling on himself for 30 years will find a lawyer to go all the way up the ladder.
07-03-2004, 02:58 PM
Some one gets hurt on the job, that person’s attorney is going after any and everyone, you can bet on that, including the builder, manufacturers of any equipment his was using, homeowners, everyone.
You just cannot minimize the importance of insurance. I carry WC-GL, builder’s risk, umbrella policies, I’m a sucker for any insurance out there because things can and will happen.
07-03-2004, 03:06 PM
I had a situation where a roofing sub of roofing sub i used did not properly tarp a house, (this in reply to your foundation guy) My customers 700 sq. ft. bungalow was completely ruined inside because of this idiot. The end result was this ,,,3 insurance companies carrying on three investigations , nobody stepping up to pay to relocate these people and I got sued in the meantime for all of it. I never got compensated for attorneys , deodorizing, bringing my employees to job at 3 in the morning to help, helping the people move and about a hundred other things. That slab cracks on your customers house and youll have the same experience.
07-03-2004, 03:23 PM
Our GL here (Texas-only one company writing) quit with Completed Product Coverage last year, and they no longer cover defects as a result of earth movement (slabs cracking) or mold. So I don't look for insurance coverage really on any defects (of course my homes are defect free). I am re-entering the RWC 10 year warranty program.
07-03-2004, 03:25 PM
07-03-2004, 03:30 PM
I haven't had any defects since 1983.
07-03-2004, 03:38 PM
I use to work with a architect who called himself a forensic architect,,,,,tools of the trade...high powered cameras to measure grout joints to the 100th of an inch , strings to pull across brick rows to determine what percentage need to be removed in a given line. scraping grout and analyzing sand granules in microscopes, measuring shingle courses for 1/4" exposure mistakes, 10' aluminum straight edges for walls. My job was to hold the tapes and rulers against everything so he could photograph. You could almost see the cells of my skin when my finger showed up in the picture. Think he found defects?
07-03-2004, 03:46 PM
Quality, it's all in the eye of the beholder.
Tolernence within 1/100"? No problem!
07-03-2004, 03:54 PM
Did those red and green balls just show up beside our names or am i missing something?
07-03-2004, 08:31 PM
You say: "do I really have time to play detective and micro-manage what my subs do?", that's the problem, and the problem as the insurance companies see it, if you are subbing you don't have the ability to manage the workers. In most states we are licensed as "general contractors", and the general is responsible for everything that goes on under him, he might be able to subcontract his work, but he can't subcontract his responsibilities. A general is responsible for everything the sub does, and that includes obeying all employment and safety laws. In Andrew's example of the builder losing his house, that's why we are required to get Workers' Comp certificates from all subs, and if the sub does not give us a certificate (and now actually name us [and our owners] on his policy for each and every job), we are assessed the Workers' comp premium for full amount of the subcontract agreement, because the general has to pay for the guy's medical bills and life time support if the sub can't. Somebody has to pay for the guy's broken neck, and if a general doesn't properly supervise and monitor his jobs *he* is responsible, as well he should be. If the general isn't able to pay, then the owner of the property is liable, ever hear of somebody tripping on a sidewalk and suing the owner for the crack, or somebody slipping and falling in a grocery store and suing the owner of the property the store sits on?
07-03-2004, 09:22 PM
I am responsible for my subcontractor's work, and I will gladly accept that. I am not responsible for what they do internally in their company's operation. If Ed subs from me, and Ed doesn't pay his taxes or Ed's employee's don't pay their taxes I am not responsible.
You are trying to tell me I can't do something I've been doing very successfully for 30 years.
07-03-2004, 09:43 PM
If Ed doesn't pay his bills, or his workmen, then the property is responsible, that's why we have lien laws. If somebody is injured on a piece of property, then the property is responsible for the injury. You have a responsibility to the owner of the property to protect him from an obligations that the property may incur. If Ed didn't pay his taxes, you knew or should have known that he wasn't paying his taxes, and you benefited by his non-payment (like through lower contract prices) ,then you could be held liable for those taxes. In California we have to notify the state immediately when we subcontract work, so they can check and attach the payments, if we fail to notify them then we are responsible. If we notify them, then we are in the clear, it becomes the state's and fed's job to attach the money.
I think you have been very lucky for the last 30 years.
07-03-2004, 09:53 PM
"If Ed didn't pay his taxes, you knew or should have known that he wasn't paying his taxes, and you benefited by his non-payment (like through lower contract prices) ,then you could be held liable for those taxes."
That is an inaccurate and untrue statement. If the gov't instructs a GC to withhold from a sub, then you are responsible, but until then I am no more responsible for them than I am for you. The IRS expects companies and individuals to take care of their business and pay their taxes, not someone elses.
By the way, you don't do something successfully for 30 years thru luck.
Dick, you need to get out an meet other homebuilders.
07-03-2004, 10:06 PM
Doesn't Texas obey that Federal Child Support law that requires the states to require emloyers to notify the state immediately when subcontracting work so the state can garnish the subcontract payments (seems like we've been down this road before)? That's the vehicle that's being used by both the states and Feds to garnish back taxes.
07-03-2004, 10:12 PM
If the IRS wants to garnish wages they don't have to use child support laws, what about people not paying their taxes with no children or no child support issues? Think about it.
We've had this discussion before.
07-03-2004, 10:30 PM
Dick, I'm signing off, but here’s the bottom line. We’ve been around the world on this subcontractor issue. If using subs doesn’t work for you then by all means don’t use them. Hire carpenters, roofers, painters, HVAC, plumbers, electricians, masons, drywall finishers, tile setters by the hour as employees. If that is the best way for you to operate or you feel your liability is lessened or there’s an insurance issue then don’t subcontract. But understand many contractors and 99% of homebuilders sub almost all of their labor, and they do it that way because it’s most efficient and quality is higher. Most people don’t want to manage dozens or hundreds of trades people on a daily basis, they want to manage their businesses.
07-04-2004, 11:57 AM
Probably 99% of the merchant builders subcontract their carpentry, you are the only custom builder that I have ever known that has successfully transferred this methodology to custom home building. Why do we keep beating this dead horse? Things are done a lot differently in Texas, and the public’s expectations are a lot higher in California, and if not met they sue. I am sure if I was in Texas I would subcontract carpentry as well, because that’s the way it’s done down there, but that’s not the way good builders build around here. I had lunch with Joe Stoddard a week ago, and he mentioned that the Texas model was coming to Vermont, and they were having a particularly hard time accepting it.
The reason builders subcontract carpentry is to get the work done cheaper, take the risk out of the project, push the risk downstream, and unethical builders bid-shop their subcontractors to get lower prices. I had a long talk with my tin-man the other day, he works for about 30 generals, many of whom build in Ruby Hill, our only custom home subdivision that currently has home sites available for builders in our area. He says that of the 30 there are only 3 of us who don't bid-shop him (he recently did a new home for John Madden [not in Ruby Hill] and says he was bid-shopped on that one). Bid shopping was illegal here years ago, but apparently the courts have ruled that a contractor has a right to bid-shop his subcontractors, so now it's just considered very unethical, not illegal. I have to wonder if a clause in the subcontract agreement prohibiting the subcontractor from piece-working, might go a long way toward guaranteeing quality work, even though it probably violates the IRS independent contractor guidelines. When you subcontract anything you lose the necessary control, maybe the IRS guidelines should be reconsidered?
A contractor's primary job is to build his projects in the most professional way possible, running his business should be secondary to building properly.
We have found that quality is much lower when carpentry is subcontracted because the subcontractors try to rush the jobs to completion to make more money, rather than to take the necessary time to do the job as well as possible. In the view of most construction defect attorneys I know, the real problem is piece-working the people who actually perform the work, whether the piece-working is established by the builder or the carpentry subcontractor. Here in California piece-working is illegal unless the individuals doing the piece-work are themselves licensed as contractors. When you do get licensing in Texas, I am sure you are going to be playing a different ballgame (I want to thank Houston for beating Texas yesterday, putting us in first place).
Another thing is that subcontracting is looked down on by the public, at least in our area, the public thinking that the builder is completely unnecessary and nothing but a con-man ripping off their money, people want to pay those who actually do the work, not a "broker" taking money off the top to do nothing but manage the project. Contractors actually advertise "No Subcontractors", and contractors that subcontract carpentry are sued at a much higher rate than contractors that employ their own carpenters, hence the insurance company prohibitions.
07-04-2004, 02:05 PM
For the first time, I didn’t bother to read what you wrote, except for the first sentence, realized your are perpetuating same untrue garbage, so I didn’t read the rest. Every custom builder I know (many in other states) subcontract. Your problem Dick, is that not only are you not a homebuilder and possibly have never had a viable program but you are out of touch with the industry. Next January, if you are interested, I would invite you to Orlando to the 2005 and you can expand your horizons. http://www.buildersshow.com/
07-04-2004, 04:48 PM
If 3 out of 30 builders are the only ones not doing a practice then who in the world is judging it unethical? That is saying that you are doing business in a manner that only 10% of the other custom build contractors are doing it and you are saying it is unethical.
Also the statement that building should come before business? After all the numbers you toss around and claim that others shouldn't work for less than what you do?
I am not a custom builder so wish to stay out of the fray but none of that makes any sense to me at all. If you can't stay in business then you can't continue to build. And if all other contractors are doing business in a manner that you disagree with that is one thing but to refer to it as unethical, that is ridiculous. I guess it goes with your view of anyone shopping at Lowes or Home Depot as being unethical. DanT
07-05-2004, 12:41 AM
Nationwide the quality of construction has fallen, now even Consumer Reports has taken up the cause.
07-05-2004, 10:14 AM
If quality in new homes is so bad (which on the whole it isn’t), then why are people buying our product in record numbers? Markets respond to consumers demands, that’s the most basic of all economic principles.
As I’ve pointed out quality in new homes has improved tremendously, but as time marches on consumers demand more and more. This, coupled with the sheer volume of that demand, keep builders on their toes to continue to deliver more and more value. I am confident this industry will continue to meet that demand and meet the challenge of a demanding buyer. The fact that they keep buying our products in record numbers and at record prices validate prove we are meeting that challenge.
07-05-2004, 12:30 PM
The size and features of new homes have increased, but the quality of the workmanship has fallen drastically, particularly on the lower end. Here is a 4-year old link to a Florida situation where US Home (Houston based BTW) goes to Tampa and responds to the market with $135,000 homes. We all know that nobody can build a good home for $135,000, but they are building crap to fill a need. http://www.sptimes.com/News/031200/TampaBay/Dream_homes_become_ni.shtml
Here is a quote from the article: "Preslar may have fallen victim to the dark side of prosperity: full employment, a booming economy and a long run of low interest rates that propelled home sales to record highs -- but left builders facing fierce competition and a drastic shortage of skilled workers. To increase their market share and hold down costs, some of the area's 500 builders made their houses fancier, but reduced construction supervision, used cut-rate materials and paid bottom-dollar to subcontractors.
Then there is Suarez Housing, a homegrown company that woos buyers with old-fashioned building methods and prompt warranty work. Of 71 Suarez customers in the Times survey, just one reported a significant problem, compared with 33 of the 131 U.S. Home customers surveyed."
I assume that US Home being Houston based subcontracts everything and could care less about quality, and I would assume that homegrown Suarez Housing's old-fashioned methods are in-house carpentry.
Question: Should US Home continue to be allowed to build junk to fill the public's demand for cheap housing? Or will bad companies like US Home die off like the Yugo car?
Florida is supposed to have a good licensing program, so I would have to agree that licensing does no good, the only thing that works is suing the crooks. In the past I did a lot of Industry Expert and Arbitration work for the California License Board, I have given up because the Board is bogged down in it's own bureaucracy, suing the bad builders is a very expensive solution, but the only solution.
07-05-2004, 02:31 PM
I see it all over Dallas County.
I'll bet in 15 years the entire cities of Plano, Frisco, Allen, and other surrounding areas will be falling down.
All the quick builders work in those areas. They put up houses as fast as they can. The hell of it is I see them trying to move into the nicer areas of Dallas as well. We already have our share of "cut-rate/big-house" builders around the old established areas of Dallas. We don't need any more.
I blame it on an uneducated buyer. Not that they don't have an education, but they think what they're buying is a good product because these builders know all the right eye candy buttons to push.
07-05-2004, 02:36 PM
Since everyone hear respect your opinion I would be curious about your take on this subject. Do you think the average home is built with the same quality it was 20,30,40,50 years ago. Not are the featrues nicer, but does the average buyer get a better built home than they use to.
07-05-2004, 02:52 PM
Can't resist. I do primarily handyman work and light remodels. I also buy and rehab houses for the rental market. Town of 40k in central Ohio. The houses I buy are typically in what would have been called "working class" neighborhoods. Similar I assume to what the neighborhoods in the article represent.
I have found numerous building flaws on these rehab houses that is a product of when they were built. Limestone foundations that sunk or were too shallow. Basement walls caving in with no trees in the area, and our area is table top flat. One had a first floor bathroom that although built originally had the floor joist simply toe nailed onto the end of the main house joists. Needless to say the floor was sunk about 6 inches.
How about skip sheathing with more knots than wood? You don't think the craftsman of the past cheaped out when it came to hidden areas do you. And, out of 16 rehabbed houses I have found whisky bottles in the walls of 5.
In the early 1900's particularly the teens Henry Fords number one problem was not finding workers but keeping them sober enough to work 8 hours. And that was an issue country wide not just Detroit.
Quality homes, cars or any other goods for that matter have always been available. At a price. And most Americans can't or couldn't afford it. So they bought what they could or can with what they have. And the masses have always been fodder for unscupulous salesmen, craftsmen, manufactures etc.
The facts haven't changed, you have. Dick you pick and choose your information to prove your point. And frankly it is usually in the minority. Your ideals are noble but are not backed up by fact and I have said it before, your perception is one of a view from the top of the economic heap, not down with the commoners.
Want to really do something? Take and build a few habitat houses the way you think they should be done. Build a few houses "your way" and sell them to the average working guy and let me know if you make any money. I bet with all the pomp and pagentry you couldn't build a house that any of your subs or employees could afford. But there are hundreds of contractors who do so every day and even though it doesn't meet your standard they are providing a public service.
By the way I have a friend who builds houses one at a time. As we have discussed in the past my area is an inexpensive area to live in but I was curious. I called and asked if he could build a decent 3 bedroom ranch for 135k. He said sure, if is was a small lot, one car garage, few upgrades he could get it done and do a well built house. DanT
07-05-2004, 02:55 PM
Stopped by to see a friend who just moved into a new house today like the ones Ed described,,,,,house bricked up to first floor windows with rowlock terminating top of brickwork,,vinyl siding sitting in j channel, NO FLASHING on top of brick,,,pulled a lap back on the siding ,,NO TYVEK OR PAPER.....vinyl corner post terminated at top ,,OPEN TO WATER,,,,,,shingles on rake ...DID NOT COVER RAKE BOARD......back of house block foundation with vinyl siding.....ONLY 3" OF MILDEWED BLOCK SHOWING.......siding above brick mold over garage door...NO HEAD FLASHING.....gutter spouts terminated at inside corner of house...condenser unit sitting on a pad below grade and condensation drip line was installed behind condenser unit.....sidelight sills move when front door was close... sidewalk to side door of garage was pitched towards door.......No grass yet, nothing but burnt up clay in yard, ,,,,light fixture mounted to vinyl siding without a mounting block same with weatherproof receptacle...Sadly I did not say anything to them because they were so happy to have moved in to a new house........ED youre right these houses will fall down and I wish they would fall right on top of the building inspectors head. The rest of the house on the street had the same problems. What a joke
07-05-2004, 03:02 PM
Do you see licensing as the answer?
1) The problem with licensing is that it has a 4-year journeyman requirement (which presupposes 4-year apprenticeship), with no unions anymore, the very terms apprentice and journeyman are meaningless. How do you guarantee experience?
2) The problem with the legal system is that it costs too much for the average person to sue a builder.
I was at a License Board meeting a couple of years ago, and one of the members (a tract builder whom I know because I built a custom home right above his custom home and we had a drainage problem [resolved amicably]) made the statement (in reference to the plastic window retrofit problem): "We are not here to protect people from their own stupidity, the Yugo car came into the United States, fell apart, and the public stopped buying them, they'll soon stop buying these windows". The con-men are still selling plastic retrofit windows to the public. Synthetic stucco and fibercement siding are still going up, bad builders will do anything to lower their price to get more qualified buyers.
One of the areas that homes are built worse than years ago is the fact that I see walls on multi-million dollar houses rotting out in 10 years. The combination of fiberglass in the walls for mandated insulation, sheathing sealing the walls (plywood or worse OSB) for mandated shear, and housewrap over the walls, for mandated air-tightness (in some areas) is a recipe for disaster. Our material manufacturers have given us untested crap in a lot of instances, and we are the ones liable.
I am going out now to take some pictures of a rotted building that I backed off bidding some years ago because of synthetic stucco with no way to flash the windows. All the stucco has now been ripped off and I can get the pictures to sue the builder, whose fault is this? The architect that specified the EFIS, the manufacturer that made the product, or the builder that installed it? Everybody is getting sued, and the courts will apportion damages, but the builder that installed it must have been pretty stupid, at least some of us knew it wouldn't work and backed out, so I think the builder deserves to end up in bankruptcy because his greed made him build something that any competent builder had to know was wrong.
07-05-2004, 03:07 PM
Tract homes, in my opinion, are crap. So is a Big Mac from McDonalds. However, in an era when a good automobile costs $50,000 a $135,000 starter home and a $.49 hamburger is pretty good value. A person paying $135,000 for a house will have a payment under $800, income under $30,000. That’s pretty amazing. This is a big country and I’m sure we can all point out examples of bad construction. But it’s all relative.
There’s almost 2 million homes built a year in this country, that’s 20 million in a decade. You can find plenty examples of bad workmanship given that number, but looking at the industry as a whole quality has improved. If builders build bad homes they will be driven out of business by angry consumers. That’s how the free market system works.
If consumers feel they are not receiving good value for their money they shouldn’t buy the product. Dick, I would give this advice to you and anyone else who thinks they can do better: if you see bad quality construction in your market area then you should immediately go out and build a better product for the money. The world is waiting. I know in my market if my competition builds sub standard that’s just more opportunity for me. Sitting on the sidelines and just be critical is a very easy thing to do.
07-05-2004, 08:15 PM
What brand of synthetic stucco did he use?
07-05-2004, 08:58 PM
I would say yes and no. Is that wishy-washy enough?
The building products are better if you use them. With spray-on insulation, you can get probably about an R-30 in a 5-1/2" wall. Better electrical, plumbing, HVAC, better windows and doors, better roofing materials, and better science all around for building a better home than they could in the 50's and 60's.
On the NO side:
Good consturction practices are gone except in the high-end market. The current tract house market is a joke. I live in a 1950 tract house. Pier and beam foundation, cast iron waste lines, hardwood floors, morter bed tile work, real brick veneer...It's samll, but well built. Most everything these days are built on a slab. I hate slabs. But they are here to stay. A lot of builders cut corners to get cost down or use bottom-feeding subs to keep cost down.
I agree with Allan that the only way you can make a difference is to build a better house than what's available on the tract market. It's not harder to build a house right, but it will cost more and the consumer won't know the difference. That's the gotcha in this whole mess. The consumer won't know the difference. They'll just see the same price for more square footage out in the burbs and think they got a heck of a deal.
Now, I'm not a home builder. I'm a trim and cabinet sub working for home builders. So I can't really hold forth on the cost of doing it right vs cutting corners. The builders that I work for do it right. They and I know the difference. If I was to suggest using MDF anything to save a few bucks, I'd lose a few builders off my client list. Only the best is what they want.
But the average Joe can't afford me or the builders I work for. So he's stuck getting what's available. And most of it looks good on the outside. So why do I live in a 1950 tract house? Because I won't buy the junk they're selling and I can't afford to hire the builders who can still build a good house. One of these days I'll buy a lot and build my own. But all the lots I can afford are in the burbs. Go figure.
07-05-2004, 10:14 PM
Exactly what I have been trying to say, but you said it much better.
07-05-2004, 11:04 PM
Sorry, I didn't mean to ignore your question.
No, I don't think licensing is the answer. It wouldn't hurt, but it's not going to fix the problem.
07-05-2004, 11:27 PM
Licensing does give the average owner some sort of redress, but it's pathetically slow and seems to do nothing more than perpetuate the bureaucracy.
The average person can't afford the legal system, that's why the tract builders get away with what they do; ironically, the builders most likely to get sued are the guys like you build for, and guys like Allan and myself where the customers do have the resources to go after us if they are so inclined.
In the 50's and '60s the average carpenter made more than the average policeman or fireman, now the craftsman makes significantly less and has no pensions or medical benefits like the civil servants do. The solution is to pay our employees a living wage so they were solid members of the middle class; however, we can't afford to do that if our competition hires illegals or other low paid help. If the immigration laws were enforced it would drive prices up so we could afford to pay more and give our employees the money they deserve and bring qualified people back into the trades. Wouldn't you love to get double what you get now, and pay your men double?
One of the quality problems we are having is that our material manufacturers are continually trying to come out with products that can be installed by semi-skilled help, knowing that the industry as a whole is employing less that skilled craftsmen. Look at backer board, the industry is providing a material that allows semi-skilled help install tile, it's becoming hard to find a tile setter that can even float a mud bed anymore. OSB and MDF are products that should have never been brought to market, and housewrap is a material that was originally designed to wrap a house without the knowledge of how to flash openings, and that one sure backfired. EFIS was an attempt to make stucco cheaper, and look what's happened there.
I am not lowering my prices or the wages that I pay my men, I'd rather not work than compromise the quality of my work, or the wages I pay my men. I guess I'll just to have to do only what I can get that pays well, and continue devote time to trying to rid our industry of the cheap builders that cut corners.
07-06-2004, 01:04 AM
It is a systems debacle for us to deal with in the future as we have done so in the past.
As I understand it, we are the kaki trades people whether we like it or not. As such, we are dealt with much differently such as the farmers are.
Every since the start of the Industrial Revolution, ‘they’ have been problemed with classifying us as blue collar or white-collar workers so that we may nicely fit into ‘their systems’, whoever they are? The once highly commissioned highly skilled artisans do not quite fit into any system for the industrialized social community.
If ‘they’ can ever figure out how or where to place us, it would settle the conflict. Unfortunately, the USA is not likely to do this in the near future.
Our basic problem is to concern our selves with communicating with each others as the blue and white collar workers have done so in the past many hundreds of years. This done, we will and are more of a problem because we do not fit into one of the selected blue or white collar workers classes, forbid we should ever be in the king’s classification.
Like it or not, we have to go to the basics to see how, and why.
Excellent posts, On target.
07-06-2004, 10:59 AM
We have to stop competing with each other on the basis of price, doctors don't, lawyers don't, why do we? Not only do we have to command more respect by charging more and making more, but the men on the front lines have to receive more respect by being paid more. The trend to simplify things so they can be done by unskilled, or semi-skilled labor has to stop. The Home Depot advertising campaign that sends the message that anybody can buy the pieces and do it himself has hurt us as well. When customers are paying a lot of money, and then the workers show up and look like they are being paid peanuts it hurts. If we are going to command professional type fees, we have to look and act professional. None of this applies to spec building, all people care about when they are buying a finished product is the quality and price (and not necessarily in that order), but when somebody contracts for a service, they expect, and should receive, professional looking and acting personnel. This is why it is so difficult to be both a spec builder and a contract builder (I have to give Allan credit, he seems to mix the two quite successfully, and that's rare).
An old joke: A guy calls a plumber to unstop his drain. The plumber does it and writes up his bill, the guy says: "My God man, you've only been here 15 minutes, I'm a brain surgeon and I don't get this much money per hour". The plumber says: "I didn't get this much either when I was a brain surgeon."
07-06-2004, 12:29 PM
“We have to stop competing with each other on the basis of price”. Unbelievable.
Competition is the cornerstone of our economy and in reality our entire country. Without competition the USA becomes the USSR. We should be competing on price.
As a producer I love competition, it makes me a better builder.
As a consumer I demand competition, because it gives me my goods and services at the lowest possible price. Dick, you should have mixed in a few economics classes with your law classes at Stanford.
By the way, builders doing spec homes and custom homes (like me) are not special. One is a function of your reputation, your people skills, your estimating skill, and your ability to sell your services. The other is a function of your balance sheet and ability to borrow money, your architect/designer, and your ability to meet market demand. But really, doing both is not special.
07-06-2004, 12:41 PM
Five real estate brokers attend a cocktail party. They start discussing their companies’ commissions rates, and someone suggest that they should all charge 6% and hold to that, thus they would all make more money. They did. They all went to jail for a long time. The Justice Department came down hard on them for price fixing. True story.
I know that’s not what Dick is suggesting, but the point is how seriously competition is demanded by our government. It is the cornerstone of our economy. If you can’t compete on price, then you shouldn’t be in business. What if all drug companies/lumber yards/car manufacturers/clothing manufacturers/grocery stores/gasoline companies/computer companies decided that they would not compete on pricing. We would be living in a socialists world.
Competition is good.
07-06-2004, 12:47 PM
I have always gotten significantly more than my competition, other than the old union days when I did commercial, government, and industrial work with competitive bids, and then everybody had the same costs. Statistically nine out of ten contractors go broke within the first 10 years, so the competitive level is the bankruptcy threshold.
No professionals bid competitively, doctors don't, lawyers don't, accountants don't. Spec building, yes, you are producing a product for the competitive market. Even so, when I buy something I usually buy the most expensive, thinking that chances are it's better than the cheaper products. There *are* people out there that think like I do, and *are* willing to pay more to assure higher quality. Every time I've bought something cheap, I've lived to regret it.
It's the type of thinking that you are espousing that causes builders to cut corners, build inferior products, and get sued in the process. You are right about one thing, I never took a course in economics in college, just never interested.
07-06-2004, 12:54 PM
“Statistically nine out of ten contractors go broke within the first 10 years”
Dick, 9 out 10 companies in general go broke, not because of competition but because of being under capitalized or poor business skills.
“No professionals bid competitively, doctors don't, lawyers don't, accountants don't.”
I disagree. They may not “bid” in the sense of how we do, but they have to price their services competitively. If not, they will have no business. If not, why can’t a doctor double his prices tomorrow? Because of his competition.
By the way, being competitive doesn’t mean you have to cut corners, it just means you have to work hard to be efficient.
07-06-2004, 01:24 PM
Wake up Allan! The whole world isn't looking for a bargain. The big watch is the Patek Phillipe, and you can buy a quartz watch for $19.95 that keeps better time; Here is a grey market dealer's listings: http://www.atlantictime.com/patek-philippe-grand-complications-watches.htm
Why do some pay so much for a Patek? The same reason that green copper gutters and flashings are the rage now on houses. My latest watch, and it's $42,000: http://www.ulysse-nardin.com/e/collection.e/watchdetail.e.jsp;jsessionid=6A1DE76BE78A7F9C7C8B9 82EAF1E3796.ajp13_3?ID_Product=10000J&ID_Group=100000&ID_Cat=100000 Maybe Stanford taught us to live in a different world? I don't know, there were a lot of Texas kids there. Maybe they are still down there, just waiting to spend their money.
07-06-2004, 01:38 PM
The whole world’s not looking for a bargain but they are looking for the most they can get for their money. If you could buy that $42,000 (geez Dick!) watch with the same quality for $38,000 would you do it? Yes.
No doubt, there is .001% of the population that buys strictly on name.
I know that as I watch my market, the people buying my 2 million$ homes are just as tight as those buying new homes for $200,000.
Look, I market myself as a unique, one of a kind, high quality builder. If you have to ask the price then you aren’t in my league. But there are other builders building in my price range saying the same thing. Same for the 4 million$ homes, and the 6 million$ homes.
Competition, bring it on!
07-06-2004, 01:56 PM
Try putting green windows in your houses, and then do all gutters flahings and chimney caps in copper and pre-patinize them. While you're at it, granite counter tops are out, put in Quartzite and see if you can't get a couple of hundred thousand more for your houses. People want status items and will pay for status. I had a dentist tell me how another dentist was bragging to all his dentist friends about how much copper gutters and triple pane windows cost, and how expensive I am. People want and will pay for bragging rights; get out of the competitive market! Nobody makes any money dealing with cheap people, even the stores are starting to realize that.
07-06-2004, 02:05 PM
My latest spec ($2,800,000) is clad wood windows Hunter Green in color, all my houses have copper flashings, most have 1/2 round or 1/4 round copper gutters, solid stone treads on stairs, stone floors, all hardwoods on the second/third floors (no carpet), frameless shower doors, Vantage Lighting systems, real slate or tile roofs, 11'-12' ceilings down, 10' ceilings second floors, all 8-0 Craftsman 1-3/4' interior doors ($1,000 each), glazed finishes on cabinets, wrought iron stair rails, concrete countertops in the kitchen (granite is out), outdoor summer kitchens with outdoor fireplaces and grills, spa rooms, media rooms, refrigerators in bathrooms, cedar closets, etc.
It's still damn competitive.
07-06-2004, 08:05 PM
Sounds beautiful, that's about the best we can do, how many square feet? Do you pre-patinize the copper?
07-06-2004, 08:29 PM
White, coppertone,avocado, harvest gold, almond, black, now it's stainless steel and white is coming back. I'm talking appliances. I'll bet these green windows will provide a lot of remodelling work in the near future. Down here granite countertops are being replaced. Do we all agree yet that licensing dosen't work?
07-06-2004, 09:18 PM
Just a discussion about what people who are filthy rich want in their house....most people in this world live in houses that the roof leaks every time it rains.
07-07-2004, 05:58 AM
House has 7700 sq ft, that includes quarters and third floor media room. Andrew, I sometimes add leaking roofs too, as an added feature. Biggest feature these days are wine rooms with chillers, redwood racks.
07-07-2004, 07:38 PM
There's nothing better than a planned roof leak that you can't trace down. Boy, talk about keeping your name out there. They'll tell all their friends!
07-07-2004, 09:38 PM
That's $356 a square foot! Looks like you are getting California prices down there, finally, now start paying California wages.
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