Whistleblower: Repair headache drags on

Richard Sennott, Star Tribune

Jeff Nelson’s Monticello home was damaged during a storm in May 2008, but it has sustained even more damage after a contractor didn’t complete the repair job.

Jeff Nelson's Monticello house isn't fixed yet, after 17 months, two contractors and an overflowing Dumpster.

By Lora Pabst, Star Tribune

Last update: October 24, 2009 - 11:43 PM

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LIEN WAIVERS: PROTECTION FOR HOMEOWNERS

Suppliers or subcontractors can file a mechanic's lien against your property if a contractor fails to pay the bills. A lien is a legal claim to a portion of your property.

You may pay any subcontractor or supplier directly and deduct the amount from the contract price. You can also request a lien waiver, which relinquishes a supplier's right to file a lien.

In the absence of waivers, you can withhold payments to the contractor for 120 days after all work is completed.

For more information go to www.tinyurl.com/yhncxxr, or call the Department of Labor and Industry at 651-284-5069 or 1-800-657-3944.

JANE FRIEDMANN

Jeff Nelson wakes up every morning to a big green Dumpster in his driveway. He never knows what might have been thrown in overnight by someone driving past. He has found furniture and steel poles. Even a stolen wallet.

Nelson's contractor brought the Dumpster to his client's Monticello house this year to collect debris from a construction project. Nelson was supposed to get a new roof, siding and windows after a storm blew through in May 2008. What he ended up with is a bungled repair, a Dumpster he can't get rid of and a lien for almost $6,000 on his house.

Nelson thought he did his homework by hiring a licensed contractor. He paid almost half of the job's $46,000 cost, but the timetable stretched from three weeks to six months. Then he discovered that Todd Gratrix, of Gratrix Construction Inc., hadn't paid a $5,896 bill for supplies or the bill for the Dumpster.

Gratrix admits he didn't pay all his bills, partly because he needed to cover other business expenses with Nelson's down payment. His plan was to pay the supplier once Nelson got more of his insurance money. He said the work on Nelson's house was delayed because the payments came more slowly than expected.

Charlie Durenberger, head of contractor enforcement for the state Department of Labor and Industry, said he sees many once-successful contractors struggling in the down economy.

"Some of these guys get into a situation where they're operating almost as a Ponzi scheme," Durenberger said. "They're robbing Peter to pay Paul, and customers at the end of the line get stuck holding the bag because now there's no more money left to pay all the bills."

The perfect storm

The storm that swept through the north metro in May 2008 broke most of the windows on Nelson's house and left dents in his roof and siding. Right after the storm, contractors descended on the neighborhood. He hired one, but the guy never did any work, so Nelson fired him.

He signed an agreement with Gratrix to take over the job on Jan. 26 and finish it by Feb. 16. Gratrix required a down payment of about $8,000, which he told his client he was using to order the windows and doors from Big Lake Lumber. Nelson paid the contractor, but unknown to him, the money didn't go to the lumber company.

Bad weather delayed construction, so Gratrix wasn't able to start taking off damaged siding and putting up house wrap until March. Things fell further behind when Nelson's mortgage company temporarily withheld some of his insurance money while awaiting proof of progress.

By the end of the summer, with the work still unfinished, Nelson found another problem. Some of the material protecting the eaves was crooked. Then he got an alarming letter from Big Lake Lumber explaining the lien on his property. He called Gratrix and discovered the construction materials were never paid for, so he told Gratrix he was off the job. Nelson couldn't get rid of the Dumpster because the rental company hadn't been paid by Gratrix, either.

"I had no clue he didn't pay for the material," Nelson said. "That was the last straw. We wanted the project to get moving."

Nelson called Gary Anderson, the Monticello building official, who said the house wrap wasn't sealed properly and a sliding door appeared to have been installed upside down, creating an opportunity for water damage.

Gratrix told Nelson that he would fix all of the problems, but he said Nelson wouldn't let him back on the site. He said he hasn't seen the sliding door, but he questions whether it's really upside down.

"I take full blame for (the door), if that's the case," Gratrix said. "Unforeseen issues just turned this job into a nightmare. It's not indicative of my business."

Nelson has moved on. While he said he trusts his new contractor, who has agreed to get the Dumpster hauled away in the next couple of weeks, Nelson isn't taking any chances. This time, to protect his house in case somebody doesn't pay their bills, any suppliers or subcontractors will be required to sign a lien waiver so they can't take action against him. Gratrix guaranteed he didn't need one.