Hansen Homes

HANSEN HOMES, LLC

XXXXX ***

***, Alabama XXXXX-XXXX

February 12, 2020

VIA FACSIMILE (XXX-XXX-XXXX)

VIA EMAIL (***@csal.Revdex.com.org)

Mr.

Dispute Resolution Specialist

Revdex.com

P.O. Box XXXXX

***, AL XXXXX

Re: Case # *** ("Owner")

Dear Mr.

Hansen Homes, LLC ("Builder") is in receipt of your letter, which included the Complaint from the Owner. In response to the Owner's Complaint, Builder offers this letter, together with the attached Certificate of Occupancy for Owner's residence, and the Contract signed by the Owner. Prior to the issuance of the CO, Builder conducted a walk-through of the finished project and also addressed any "punch list" items identified by the Owner during the walk-through.

Builder contracted with Owner to build a custom home. Builder presented Owner with a standard cost-plus contract, which Owner signed. The Contract states that the price of construction is the actual cost of all labor and materials for the job, plus a 15% builder's fee on all labor and materials. The estimated cost of the project was $341,000. The Contract states:

"The contract price of the project shall be set at the sum of all cost incurred during construction of above mentioned structure plus 15%."

The Owner made many changes to the scope of work during construction. Builder tried to comply with all of the changes requested by the Owner. The changes requested by the Owner increased the cost of construction, requiring additional costs for labor and materials. Although no written change orders were used, the Owner specifically requested all of the changes. The Owner did not direct Hansen Homes to stop any of the changes. The Owner never stated that they required a written change order. In other words, it was customary throughout the construction of the Owner's residence that changes were requested by the Owner and then implemented by Builder without the use of written change orders.

Despite having not been paid the total amount owed by Owner, Builder finished construction of the dwelling, and obtained the attached Certificate of Occupancy on December 27, 2019. The final cost of the completed dwelling, including labor, materials, and the builder's fee, was a little over $378,000. Builder did not even charge the Owner the 15% builder's fee on several thousand dollars' worth of materials that were supplied to this job.

As of December 6, 2019, the Owner had paid Builder about $264,000, leaving a balance due of just over $114,000 (about 30% of the total construction cost). Builder does not want "extra money," as Owner alleges. Builder, like any business, does want to be paid for the work that was actually done at the Owner's request. Builder has lost substantial money on this job by having to pay its labor and material costs that have not been paid by the Owner.

Builder cannot return to the Johnsons' residence to "finish the job" for "the agreed amount" for at least two reasons. First, the job is finished as evidenced by the attached Certificate of Occupancy. The Owner has moved into the residence and is living there now. Second, the Owner has demonstrated that he does not intend to pay the "agreed amount" for the work by Builder. The "agreed amount" of construction is the cost of labor and materials, plus the 15% contractor's fee. The exact dollar amount changed based on the demands of the Owner, and also on the actual cost of labor and materials supplied to the job site. The "agreed amount" was not the estimated cost. In any event, the payments by the Owner to Builder as of the date of this letter do not even meet the estimated cost ($341,000).

The Owner has previously been made aware that the amount owed to Builder for finishing the construction of the Owner's residence is $114,273.78. Builder expects Owner to honor his contractual agreement and to pay Builder the balance owed of $114,273.78. Upon receipt of this amount, Builder will remove its Contractor's Lien and will consider any workmanship issues raised by the Owner which may be covered by the Warranty in Article 13 of the Contract (Owner previously voided the warranty by moving into the house without paying Builder the Contract price).

Thank you for your assistance with this matter.

Sincerely,

Hansen Homes, LLC

______________________________

Hansen Homes is not willing to engage in further discussions unless Mr. pays the full amount owed for the construction of his residence.