Dear Ms [redacted] : We received your letter that was filed with the Hawaii Revdex.com We are very sorry that you feel that your concerns have not been adequately addressed by Honsador Lumber LLC While we disagree with the comments made in your letter, we always endeavor to satisfy our customersIt is not unusual for disputes to arise between contractors and owners during the course of construction With respect to the construction of your home, Honsador spent a great deal of time—at no cost to you—working directly with both you and the contractor that you selected for the construction of your home, to mediate and resolve disputes that threatened the continued construction of your home Early in the construction of your home, we were able to work with you and your contractor to develop a change order to resolve these disputes and get your project back up and running Like any contract, the Payment and Performance Bond sets forth mutual obligations and responsibilities of the parties to that contract In this case, the Bond represented a three-way agreement between yourself, your contractor, and Honsador, as the surety That Bond agreement was entered into freely by all parties, and all parties, including you, had an obligation to make sure they understood the terms of that contract Moreover, it is your contractor that had a statutory duty to explain lien and bonding rights to youWe acted consistent with our obligations under the Bond in responding to your concerns and worked with you and your contractor to complete the construction of your home Given that your home was completed by the contractor, lien free, then neither of Honsador’s obligations (to perform or pay unpaid subcontractors or suppliers) were or would have been triggered As you have not cited to any specific Bond provisions, we are not aware of what, if any, Bond obligations you are alleging that Honsador breachedContrary to the assertion in your letter, there is no conflict of interest by Honsador in selling construction materials and offering surety bonds Supply house sureties have long been a staple in Hawaii’s construction industry Banks, contractors, governmental agencies, and the courts, have all recognized the role that supply house sureties, such as Honsador, play in the construction process Furthermore, the reason why there is no conflict of interest in selling construction materials while also issuing bonds, is that Honsador, like other supply house sureties, do not condition the issuance of the bond on the sale of construction materials There is no contract term in either your construction contract or in the bond that obligates you or your contractor to buy materials from Honsador in order to get a bond As to your comments about the indemnity agreement, it is within our business judgment to determine whether an indemnity agreement is needed from either the contractor or the owner in connection with the issuance of a bond It is not illegal to do so If in exercising our business judgment, we determine that an indemnity agreement is necessary from the owner, it is our standard operating procedure to inform the owner that they should seek independent advice regarding the contractual obligations under the agreement before signing it It was not Honsador’s duty to make sure you understood the indemnity agreement before you signed it You agreed to sign it because you wanted the benefit of the Bond We also need to point out that you were not asked to perform any obligations under the indemnity agreement that you signed, and Honsador did not impose any obligations on you You have complained about having to sign the indemnity, yet you were not damaged in any way by it No one has made you do anything or pay any money under that indemnity agreementWe regret if there was any confusion on the timing of the disbursement of final payment However, all funds that we disbursed were for the construction of your home No monies were diverted, misappropriated, or overpaid To the best of our knowledge, no liens have been filed against your property, meaning that all funds were utilized to pay for all labor, materials, and equipment furnished, just as they should beWe understand that your home has been substantially completed and that you have moved into the house To the extent that you and your contractor are still working through responsibility for addressing limited warranty matters, we have continued to work with both of you to amicably resolve these matters Over the course of the last several months, our team has had multiple conversations with both you and your contractor to discuss whether certain items that you have identified are covered under the construction contract and/or are the responsibility of your contractor to complete Given these discussions and our continued efforts to work with you and your contractor to mediate and resolve your differences of opinion, we were very surprised to read your allegation that Honsador has not been working with you As we have informed you, we are committed to continue to address these matters with you and your contractor However, Honsador’s obligations to you and your contractor are not open ended—they are dictated by the terms of the Bond, which you agreed to Our obligations have been honored in good faith, and we stand ready to remedy any legitimate discrepancy that you wish to bring to our attention As with the prior resolution of the dispute between you and your contractor, thank you for giving us the opportunity to address the issues raised in your complaint to the Hawaii Revdex.com, and we look forward to promptly addressing any other concerns you haveSincerely, [redacted] ***Senior Vice President
Please be advised that this complaint has incorrect statements according to our records and we disagree with the accusations As the statements are potentially damaging to Honsador we will be preparing a response with our advisor which will take some time Please contact our CFO, *** ***, who is copied on this email and in charge of responding to this complaint for any questions.Regards, [redacted]
Complaint: [redacted] I am rejecting this response because: In response to my original complaint of unfair and predatory business practices by Honsador Lumber to the Revdex.com I received a phone call from Honsador Lumber’s attorney [redacted] on January 18, She told me that Honsador had not closed my Construction Bond I told her that I had an email from Honsador that the Bond was closed and all funds in my Bond account dispersed to [redacted] Construction Ms [redacted] then said that Honsador had a right to close the bond days after the completion of work She wanted to settle things outside the Revdex.com saying that Honsador could handle the problem with [redacted] Construction I told her I wanted the Revdex.com to handle the matter; that Honsador had a conflict of interests I also felt it was inappropriate since I had a complaint against Honsador as well In Honsador’s rebuttal to my complaint on them, they maintain that Honsador was of help to me I will go over the facts of my complaint again to show that what they did was harmful to me, not helpful Before signing the construction agreement with [redacted] Construction I asked Honsador Lumber of Maui to bond I told Honsador I wanted protection incase [redacted] Construction could not perform I asked them to go over their bond papers with me [redacted] at Honsador Maui who was handling it told me that the papers were Honsador’s standard documents and that she did not understand them herself so could not go over them with me Honsador does not refute the fact that they did not go over their Indemnity Clause with me Later when [redacted] Construction walked off the project because of a mistake he made on the concrete foundation, which he could not afford to fix, I was told by Honsador’s bonding agent, Mr [redacted] , that I was not bonded and that they would do nothing because I had signed their Indemnity Clause He said that banks know not to sign Indemnity Clauses, but individuals do not In my opinion indemnity clauses should be illegal as they go against the direct intent of a construction bond and are unfair to consumers The Clauses can be used as leverage against the consumer Mr [redacted] in his rebuttal defends this practice; a practice that can only be defined as predatory Since Honsador was refusing to bond, I consulted a construction attorney who reviewed all the documents, including construction blueprints, and said that Honsador had to bond He told me that Indemnity Clauses are considered so heinous by the courts that they will award triple damages if the Clause was not gone over with me Both Honsador and their attorneys chose to completely ignore the construction blueprints I sent them that showed [redacted] had made a mistake on the foundation The Performance Order, which is referred to as a “Change Order” by Mr***, was that I would pay half and that [redacted] would pay half to fix the concrete foundation, even though none of it was my fault During negotiations I said that Honsador should pick up the other half if [redacted] could not afford it since they were bonding and they said no I agreed to pay half because I could not afford to have the project stalled any longer At the meeting, [redacted] of [redacted] Construction told Honsador that he did not have enough money to complete the project Lengo then went on to cut corners on the construction of the house, did not provide adequate oversight, and worked other jobs, going many months over his second deadline, which was already moved months back to accommodate the long delay in resolving the foundation problem due to his walking off the project and Honsador’s stonewalling Honsador did nothing to keep [redacted] on schedule When bonding Honsador is vouching that he will complete on time Lengo Construction recently advertised in the Maui News as building Honsador Lumber’s Model Kit Homes for them Mr [redacted] is one of Honsador’s best customers in purchasing building suppliesMost of the building materials used in the construction of my house came from Honsador There is a conflict of interests when it comes to Honsador protecting the homebuilder when [redacted] fails to perform as general contractor They will protect [redacted] Construction first Some States do not allow building material companies such as Honsador Lumber to give construction bonds because of conflicts of interests In my opinion this is a good direction for Hawaii to follow At the very least, potential conflicts of interests such as those with Honsador Lumber and Lengo Construction need to be disclosed to consumers before bonding Honsador went on to release almost all of the final payment to [redacted] in advance of completion, leaving so little in the Bond that there was no incentive for Lengo to complete or fix damaged and improperly installed items With under $5,left in the Bond’s final payment, I again contacted a construction attorney to find out if I could move into the unfinished house, as the house had been under construction over two years, on a contract that was originally months The delay was causing hardship and added expense to my family, which Honsador was aware of The first check I wrote to Honsador to begin construction is dated 06/27/on their Bond Detail Report The attorney told me to write to Honsador telling them my intentions, and not to release the remaining money before the items were fixed and home completed, and to send Honsador a list of the problems This I did and then moved in later on 10/06/14, only to have Honsador go on to release all of the remaining money the day I moved in without telling me, despite the work that had not been completed, work not done according to plans, substandard work done that needed repair, and no final walkthroughThe attorney said their action was illegal Sincerely, [redacted]
Dear Ms. [redacted]: We received your letter that was filed with the Hawaii
Revdex.com. We are very
sorry that you feel that your concerns have not been adequately addressed by
Honsador Lumber LLC. While we disagree
with the comments made in your letter, we always endeavor to satisfy our customers. It is not unusual for disputes to arise between contractors
and owners during the course of construction.
With respect to the construction of your home, Honsador spent a great
deal of time—at no cost to you—working directly with both you and the
contractor that you selected for the construction of your home, to mediate and resolve
disputes that threatened the continued construction of your home. Early in the construction of your home, we
were able to work with you and your contractor to develop a change order to
resolve these disputes and get your project back up and running. Like any contract, the Payment and Performance Bond sets
forth mutual obligations and responsibilities of the parties to that contract. In this case, the Bond represented a
three-way agreement between yourself, your contractor, and Honsador, as the
surety. That Bond agreement was entered into
freely by all parties, and all parties, including you, had an obligation to
make sure they understood the terms of that contract. Moreover, it is your contractor that had a
statutory duty to explain lien and bonding rights to you. We acted consistent
with our obligations under the Bond in responding to your concerns and worked
with you and your contractor to complete the construction of your home. Given that your home was completed by the
contractor, lien free, then neither of Honsador’s obligations (to perform or
pay unpaid subcontractors or suppliers) were or would have been triggered. As you have not cited to any specific Bond
provisions, we are not aware of what, if any, Bond obligations you are alleging
that Honsador breached. Contrary to the assertion in your letter, there is no
conflict of interest by Honsador in selling construction materials and offering
surety bonds. Supply house sureties have
long been a staple in Hawaii’s construction industry. Banks, contractors, governmental agencies,
and the courts, have all recognized the role that supply house sureties, such
as Honsador, play in the construction process.
Furthermore, the reason why there is no conflict of interest in selling
construction materials while also issuing bonds, is that Honsador, like other
supply house sureties, do not condition the issuance of the bond on the sale of
construction materials. There is no
contract term in either your construction contract or in the bond that
obligates you or your contractor to buy materials from Honsador in order to get
a bond. As to your comments about the indemnity agreement, it is
within our business judgment to determine whether an indemnity agreement is
needed from either the contractor or the owner in connection with the issuance
of a bond. It is not illegal to do
so. If in exercising our business
judgment, we determine that an indemnity agreement is necessary from the owner,
it is our standard operating procedure to inform the owner that they should
seek independent advice regarding the contractual obligations under the agreement
before signing it. It was not Honsador’s
duty to make sure you understood the indemnity agreement before you signed
it. You agreed to sign it because you
wanted the benefit of the Bond. We also
need to point out that you were not asked to perform any obligations under the
indemnity agreement that you signed, and Honsador did not impose any
obligations on you. You have complained
about having to sign the indemnity, yet you were not damaged in any way by
it. No one has made you do anything or
pay any money under that indemnity agreement. We regret if there was any confusion on the timing of the
disbursement of final payment. However,
all funds that we disbursed were for the construction of your home. No monies were diverted, misappropriated, or
overpaid. To the best of our knowledge,
no liens have been filed against your property, meaning that all funds were
utilized to pay for all labor, materials, and equipment furnished, just as they
should be. We understand that your home has been substantially
completed and that you have moved into the house. To the extent that you and your contractor are
still working through responsibility for addressing limited warranty matters, we
have continued to work with both of you to amicably resolve these matters. Over the course of the last several months,
our team has had multiple conversations with both you and your contractor to
discuss whether certain items that you have identified are covered under the
construction contract and/or are the responsibility of your contractor to
complete. Given these discussions and
our continued efforts to work with you and your contractor to mediate and resolve
your differences of opinion, we were very surprised to read your allegation
that Honsador has not been working with you.
As we have informed you, we are committed to continue to address these
matters with you and your contractor. However,
Honsador’s obligations to you and your contractor are not open ended—they are dictated
by the terms of the Bond, which you agreed to.
Our obligations have been honored in good faith, and we stand ready to
remedy any legitimate discrepancy that you wish to bring to our attention. As with the prior resolution of the dispute between you and
your contractor, thank you for giving us the opportunity to address the issues
raised in your complaint to the Hawaii Revdex.com, and we look
forward to promptly addressing any other concerns you have. Sincerely,[redacted]Senior Vice President
Please be advised that this complaint has incorrect statements according to our records and we disagree with the accusations. As the statements are potentially damaging to Honsador we will be preparing a response with our advisor which will take some time. Please contact our CFO, [redacted]...
[redacted], who is copied on this email and in charge of responding to this complaint for any questions.Regards,[redacted]
Complaint: [redacted]
I am rejecting this response because:
In
response to my original complaint of unfair and predatory business practices by
Honsador Lumber to the Revdex.com I received a phone call from Honsador Lumber’s
attorney [redacted] on January 18, 2015.
She told me that Honsador had not closed
my Construction Bond. I told her
that I had an email from Honsador that the Bond was closed and all funds in my Bond
account dispersed to [redacted] Construction.
Ms. [redacted] then said that Honsador had a right to close the bond 45 days
after the completion of work. She
wanted to settle things outside the Revdex.com saying that Honsador could handle the
problem with [redacted] Construction. I
told her I wanted the Revdex.com to handle the matter; that Honsador had a conflict of
interests. I also felt it was
inappropriate since I had a complaint against Honsador as well.
In
Honsador’s rebuttal to my complaint on them, they maintain that Honsador was of
help to me. I will go over the
facts of my complaint again to show that what they did was harmful to me, not
helpful.
Before
signing the construction agreement with [redacted] Construction I asked Honsador
Lumber of Maui to bond. I told
Honsador I wanted protection incase [redacted] Construction could not perform. I asked them to go over their bond papers
with me. [redacted] at Honsador
Maui who was handling it told me that the papers were Honsador’s standard
documents and that she did not understand them herself so could not go over
them with me. Honsador does not
refute the fact that they did not go over their Indemnity Clause with me.
Later
when [redacted] Construction walked off the project because of a mistake he made on
the concrete foundation, which he could not afford to fix, I was told by
Honsador’s bonding agent, Mr. [redacted], that I was not bonded and that they
would do nothing because I had signed their Indemnity Clause. He said that banks know not to sign
Indemnity Clauses, but individuals do not. In my opinion indemnity clauses should be illegal as they go
against the direct intent of a construction bond and are unfair to consumers. The Clauses can be used as leverage
against the consumer. Mr. [redacted] in
his rebuttal defends this practice; a practice that can only be defined as
predatory.
Since
Honsador was refusing to bond, I consulted a construction attorney who reviewed
all the documents, including construction blueprints, and said that Honsador
had to bond. He told me that Indemnity
Clauses are considered so heinous by the courts that they will award triple
damages if the Clause was not gone over with me.
Both
Honsador and their attorneys chose to completely ignore the construction
blueprints I sent them that showed [redacted] had made a mistake on the foundation.
The
Performance Order, which is referred to as a “Change Order” by Mr. [redacted], was that
I would pay half and that [redacted] would pay half to fix the concrete foundation,
even though none of it was my fault.
During negotiations I said that Honsador should pick up the other half
if [redacted] could not afford it since they were bonding and they said no. I agreed to pay half because I could
not afford to have the project stalled any longer. At the meeting, [redacted] of [redacted] Construction told
Honsador that he did not have enough money to complete the project.
Lengo
then went on to cut corners on the construction of the house, did not provide
adequate oversight, and worked other jobs, going many months over his second
deadline, which was already moved 5 months back to accommodate the long delay
in resolving the foundation problem due to his walking off the project and
Honsador’s stonewalling. Honsador
did nothing to keep [redacted] on schedule.
When bonding Honsador is vouching that he will complete on time.
Lengo
Construction recently advertised in the Maui News as building Honsador Lumber’s
Model Kit Homes for them. Mr.
[redacted] is one of Honsador’s best customers in purchasing building supplies. Most
of the building materials used in the construction of my house came from
Honsador. There is a conflict of
interests when it comes to Honsador protecting the homebuilder when [redacted] fails
to perform as general contractor. They will protect [redacted] Construction first.
Some
States do not allow building material companies such as Honsador Lumber to give
construction bonds because of conflicts of interests. In my opinion this is a good direction for Hawaii to
follow. At the very least,
potential conflicts of interests such as those with Honsador Lumber and Lengo
Construction need to be disclosed to consumers before bonding.
Honsador
went on to release almost all of the final payment to [redacted] in advance of
completion, leaving so little in the Bond that there was no incentive for Lengo
to complete or fix damaged and improperly installed items. With under $5,000 left in the Bond’s
final payment, I again contacted a construction attorney to find out if I could
move into the unfinished house, as the house had been under construction over
two years, on a contract that was originally 8 months. The delay was causing hardship and added
expense to my family, which Honsador was aware of. The first check I wrote to Honsador to begin construction is
dated 06/27/2012 on their Bond Detail Report.
The
attorney told me to write to Honsador telling them my intentions, and not to
release the remaining money before the items were fixed and home completed, and
to send Honsador a list of the problems.
This I did and then moved in later on 10/06/14, only to have Honsador go
on to release all of the remaining money the day I moved in without telling me,
despite the work that had not been completed, work not done according to plans,
substandard work done that needed repair, and no final walkthrough. The attorney said their action was
illegal.
Sincerely,
[redacted]
Dear Ms [redacted] : We received your letter that was filed with the Hawaii Revdex.com We are very sorry that you feel that your concerns have not been adequately addressed by Honsador Lumber LLC While we disagree with the comments made in your letter, we always endeavor to satisfy our customersIt is not unusual for disputes to arise between contractors and owners during the course of construction With respect to the construction of your home, Honsador spent a great deal of time—at no cost to you—working directly with both you and the contractor that you selected for the construction of your home, to mediate and resolve disputes that threatened the continued construction of your home Early in the construction of your home, we were able to work with you and your contractor to develop a change order to resolve these disputes and get your project back up and running Like any contract, the Payment and Performance Bond sets forth mutual obligations and responsibilities of the parties to that contract In this case, the Bond represented a three-way agreement between yourself, your contractor, and Honsador, as the surety That Bond agreement was entered into freely by all parties, and all parties, including you, had an obligation to make sure they understood the terms of that contract Moreover, it is your contractor that had a statutory duty to explain lien and bonding rights to youWe acted consistent with our obligations under the Bond in responding to your concerns and worked with you and your contractor to complete the construction of your home Given that your home was completed by the contractor, lien free, then neither of Honsador’s obligations (to perform or pay unpaid subcontractors or suppliers) were or would have been triggered As you have not cited to any specific Bond provisions, we are not aware of what, if any, Bond obligations you are alleging that Honsador breachedContrary to the assertion in your letter, there is no conflict of interest by Honsador in selling construction materials and offering surety bonds Supply house sureties have long been a staple in Hawaii’s construction industry Banks, contractors, governmental agencies, and the courts, have all recognized the role that supply house sureties, such as Honsador, play in the construction process Furthermore, the reason why there is no conflict of interest in selling construction materials while also issuing bonds, is that Honsador, like other supply house sureties, do not condition the issuance of the bond on the sale of construction materials There is no contract term in either your construction contract or in the bond that obligates you or your contractor to buy materials from Honsador in order to get a bond As to your comments about the indemnity agreement, it is within our business judgment to determine whether an indemnity agreement is needed from either the contractor or the owner in connection with the issuance of a bond It is not illegal to do so If in exercising our business judgment, we determine that an indemnity agreement is necessary from the owner, it is our standard operating procedure to inform the owner that they should seek independent advice regarding the contractual obligations under the agreement before signing it It was not Honsador’s duty to make sure you understood the indemnity agreement before you signed it You agreed to sign it because you wanted the benefit of the Bond We also need to point out that you were not asked to perform any obligations under the indemnity agreement that you signed, and Honsador did not impose any obligations on you You have complained about having to sign the indemnity, yet you were not damaged in any way by it No one has made you do anything or pay any money under that indemnity agreementWe regret if there was any confusion on the timing of the disbursement of final payment However, all funds that we disbursed were for the construction of your home No monies were diverted, misappropriated, or overpaid To the best of our knowledge, no liens have been filed against your property, meaning that all funds were utilized to pay for all labor, materials, and equipment furnished, just as they should beWe understand that your home has been substantially completed and that you have moved into the house To the extent that you and your contractor are still working through responsibility for addressing limited warranty matters, we have continued to work with both of you to amicably resolve these matters Over the course of the last several months, our team has had multiple conversations with both you and your contractor to discuss whether certain items that you have identified are covered under the construction contract and/or are the responsibility of your contractor to complete Given these discussions and our continued efforts to work with you and your contractor to mediate and resolve your differences of opinion, we were very surprised to read your allegation that Honsador has not been working with you As we have informed you, we are committed to continue to address these matters with you and your contractor However, Honsador’s obligations to you and your contractor are not open ended—they are dictated by the terms of the Bond, which you agreed to Our obligations have been honored in good faith, and we stand ready to remedy any legitimate discrepancy that you wish to bring to our attention As with the prior resolution of the dispute between you and your contractor, thank you for giving us the opportunity to address the issues raised in your complaint to the Hawaii Revdex.com, and we look forward to promptly addressing any other concerns you haveSincerely, [redacted] ***Senior Vice President
Please be advised that this complaint has incorrect statements according to our records and we disagree with the accusations As the statements are potentially damaging to Honsador we will be preparing a response with our advisor which will take some time Please contact our CFO, *** ***, who is copied on this email and in charge of responding to this complaint for any questions.Regards, [redacted]
Complaint: [redacted] I am rejecting this response because: In response to my original complaint of unfair and predatory business practices by Honsador Lumber to the Revdex.com I received a phone call from Honsador Lumber’s attorney [redacted] on January 18, She told me that Honsador had not closed my Construction Bond I told her that I had an email from Honsador that the Bond was closed and all funds in my Bond account dispersed to [redacted] Construction Ms [redacted] then said that Honsador had a right to close the bond days after the completion of work She wanted to settle things outside the Revdex.com saying that Honsador could handle the problem with [redacted] Construction I told her I wanted the Revdex.com to handle the matter; that Honsador had a conflict of interests I also felt it was inappropriate since I had a complaint against Honsador as well In Honsador’s rebuttal to my complaint on them, they maintain that Honsador was of help to me I will go over the facts of my complaint again to show that what they did was harmful to me, not helpful Before signing the construction agreement with [redacted] Construction I asked Honsador Lumber of Maui to bond I told Honsador I wanted protection incase [redacted] Construction could not perform I asked them to go over their bond papers with me [redacted] at Honsador Maui who was handling it told me that the papers were Honsador’s standard documents and that she did not understand them herself so could not go over them with me Honsador does not refute the fact that they did not go over their Indemnity Clause with me Later when [redacted] Construction walked off the project because of a mistake he made on the concrete foundation, which he could not afford to fix, I was told by Honsador’s bonding agent, Mr [redacted] , that I was not bonded and that they would do nothing because I had signed their Indemnity Clause He said that banks know not to sign Indemnity Clauses, but individuals do not In my opinion indemnity clauses should be illegal as they go against the direct intent of a construction bond and are unfair to consumers The Clauses can be used as leverage against the consumer Mr [redacted] in his rebuttal defends this practice; a practice that can only be defined as predatory Since Honsador was refusing to bond, I consulted a construction attorney who reviewed all the documents, including construction blueprints, and said that Honsador had to bond He told me that Indemnity Clauses are considered so heinous by the courts that they will award triple damages if the Clause was not gone over with me Both Honsador and their attorneys chose to completely ignore the construction blueprints I sent them that showed [redacted] had made a mistake on the foundation The Performance Order, which is referred to as a “Change Order” by Mr***, was that I would pay half and that [redacted] would pay half to fix the concrete foundation, even though none of it was my fault During negotiations I said that Honsador should pick up the other half if [redacted] could not afford it since they were bonding and they said no I agreed to pay half because I could not afford to have the project stalled any longer At the meeting, [redacted] of [redacted] Construction told Honsador that he did not have enough money to complete the project Lengo then went on to cut corners on the construction of the house, did not provide adequate oversight, and worked other jobs, going many months over his second deadline, which was already moved months back to accommodate the long delay in resolving the foundation problem due to his walking off the project and Honsador’s stonewalling Honsador did nothing to keep [redacted] on schedule When bonding Honsador is vouching that he will complete on time Lengo Construction recently advertised in the Maui News as building Honsador Lumber’s Model Kit Homes for them Mr [redacted] is one of Honsador’s best customers in purchasing building suppliesMost of the building materials used in the construction of my house came from Honsador There is a conflict of interests when it comes to Honsador protecting the homebuilder when [redacted] fails to perform as general contractor They will protect [redacted] Construction first Some States do not allow building material companies such as Honsador Lumber to give construction bonds because of conflicts of interests In my opinion this is a good direction for Hawaii to follow At the very least, potential conflicts of interests such as those with Honsador Lumber and Lengo Construction need to be disclosed to consumers before bonding Honsador went on to release almost all of the final payment to [redacted] in advance of completion, leaving so little in the Bond that there was no incentive for Lengo to complete or fix damaged and improperly installed items With under $5,left in the Bond’s final payment, I again contacted a construction attorney to find out if I could move into the unfinished house, as the house had been under construction over two years, on a contract that was originally months The delay was causing hardship and added expense to my family, which Honsador was aware of The first check I wrote to Honsador to begin construction is dated 06/27/on their Bond Detail Report The attorney told me to write to Honsador telling them my intentions, and not to release the remaining money before the items were fixed and home completed, and to send Honsador a list of the problems This I did and then moved in later on 10/06/14, only to have Honsador go on to release all of the remaining money the day I moved in without telling me, despite the work that had not been completed, work not done according to plans, substandard work done that needed repair, and no final walkthroughThe attorney said their action was illegal Sincerely, [redacted]
Dear Ms. [redacted]: We received your letter that was filed with the Hawaii
Revdex.com. We are very
sorry that you feel that your concerns have not been adequately addressed by
Honsador Lumber LLC. While we disagree
with the comments made in your letter, we always endeavor to satisfy our customers. It is not unusual for disputes to arise between contractors
and owners during the course of construction.
With respect to the construction of your home, Honsador spent a great
deal of time—at no cost to you—working directly with both you and the
contractor that you selected for the construction of your home, to mediate and resolve
disputes that threatened the continued construction of your home. Early in the construction of your home, we
were able to work with you and your contractor to develop a change order to
resolve these disputes and get your project back up and running. Like any contract, the Payment and Performance Bond sets
forth mutual obligations and responsibilities of the parties to that contract. In this case, the Bond represented a
three-way agreement between yourself, your contractor, and Honsador, as the
surety. That Bond agreement was entered into
freely by all parties, and all parties, including you, had an obligation to
make sure they understood the terms of that contract. Moreover, it is your contractor that had a
statutory duty to explain lien and bonding rights to you. We acted consistent
with our obligations under the Bond in responding to your concerns and worked
with you and your contractor to complete the construction of your home. Given that your home was completed by the
contractor, lien free, then neither of Honsador’s obligations (to perform or
pay unpaid subcontractors or suppliers) were or would have been triggered. As you have not cited to any specific Bond
provisions, we are not aware of what, if any, Bond obligations you are alleging
that Honsador breached. Contrary to the assertion in your letter, there is no
conflict of interest by Honsador in selling construction materials and offering
surety bonds. Supply house sureties have
long been a staple in Hawaii’s construction industry. Banks, contractors, governmental agencies,
and the courts, have all recognized the role that supply house sureties, such
as Honsador, play in the construction process.
Furthermore, the reason why there is no conflict of interest in selling
construction materials while also issuing bonds, is that Honsador, like other
supply house sureties, do not condition the issuance of the bond on the sale of
construction materials. There is no
contract term in either your construction contract or in the bond that
obligates you or your contractor to buy materials from Honsador in order to get
a bond. As to your comments about the indemnity agreement, it is
within our business judgment to determine whether an indemnity agreement is
needed from either the contractor or the owner in connection with the issuance
of a bond. It is not illegal to do
so. If in exercising our business
judgment, we determine that an indemnity agreement is necessary from the owner,
it is our standard operating procedure to inform the owner that they should
seek independent advice regarding the contractual obligations under the agreement
before signing it. It was not Honsador’s
duty to make sure you understood the indemnity agreement before you signed
it. You agreed to sign it because you
wanted the benefit of the Bond. We also
need to point out that you were not asked to perform any obligations under the
indemnity agreement that you signed, and Honsador did not impose any
obligations on you. You have complained
about having to sign the indemnity, yet you were not damaged in any way by
it. No one has made you do anything or
pay any money under that indemnity agreement. We regret if there was any confusion on the timing of the
disbursement of final payment. However,
all funds that we disbursed were for the construction of your home. No monies were diverted, misappropriated, or
overpaid. To the best of our knowledge,
no liens have been filed against your property, meaning that all funds were
utilized to pay for all labor, materials, and equipment furnished, just as they
should be. We understand that your home has been substantially
completed and that you have moved into the house. To the extent that you and your contractor are
still working through responsibility for addressing limited warranty matters, we
have continued to work with both of you to amicably resolve these matters. Over the course of the last several months,
our team has had multiple conversations with both you and your contractor to
discuss whether certain items that you have identified are covered under the
construction contract and/or are the responsibility of your contractor to
complete. Given these discussions and
our continued efforts to work with you and your contractor to mediate and resolve
your differences of opinion, we were very surprised to read your allegation
that Honsador has not been working with you.
As we have informed you, we are committed to continue to address these
matters with you and your contractor. However,
Honsador’s obligations to you and your contractor are not open ended—they are dictated
by the terms of the Bond, which you agreed to.
Our obligations have been honored in good faith, and we stand ready to
remedy any legitimate discrepancy that you wish to bring to our attention. As with the prior resolution of the dispute between you and
your contractor, thank you for giving us the opportunity to address the issues
raised in your complaint to the Hawaii Revdex.com, and we look
forward to promptly addressing any other concerns you have. Sincerely,[redacted]Senior Vice President
Please be advised that this complaint has incorrect statements according to our records and we disagree with the accusations. As the statements are potentially damaging to Honsador we will be preparing a response with our advisor which will take some time. Please contact our CFO, [redacted]...
[redacted], who is copied on this email and in charge of responding to this complaint for any questions.Regards,[redacted]
Complaint: [redacted]
I am rejecting this response because:
In
response to my original complaint of unfair and predatory business practices by
Honsador Lumber to the Revdex.com I received a phone call from Honsador Lumber’s
attorney [redacted] on January 18, 2015.
She told me that Honsador had not closed
my Construction Bond. I told her
that I had an email from Honsador that the Bond was closed and all funds in my Bond
account dispersed to [redacted] Construction.
Ms. [redacted] then said that Honsador had a right to close the bond 45 days
after the completion of work. She
wanted to settle things outside the Revdex.com saying that Honsador could handle the
problem with [redacted] Construction. I
told her I wanted the Revdex.com to handle the matter; that Honsador had a conflict of
interests. I also felt it was
inappropriate since I had a complaint against Honsador as well.
In
Honsador’s rebuttal to my complaint on them, they maintain that Honsador was of
help to me. I will go over the
facts of my complaint again to show that what they did was harmful to me, not
helpful.
Before
signing the construction agreement with [redacted] Construction I asked Honsador
Lumber of Maui to bond. I told
Honsador I wanted protection incase [redacted] Construction could not perform. I asked them to go over their bond papers
with me. [redacted] at Honsador
Maui who was handling it told me that the papers were Honsador’s standard
documents and that she did not understand them herself so could not go over
them with me. Honsador does not
refute the fact that they did not go over their Indemnity Clause with me.
Later
when [redacted] Construction walked off the project because of a mistake he made on
the concrete foundation, which he could not afford to fix, I was told by
Honsador’s bonding agent, Mr. [redacted], that I was not bonded and that they
would do nothing because I had signed their Indemnity Clause. He said that banks know not to sign
Indemnity Clauses, but individuals do not. In my opinion indemnity clauses should be illegal as they go
against the direct intent of a construction bond and are unfair to consumers. The Clauses can be used as leverage
against the consumer. Mr. [redacted] in
his rebuttal defends this practice; a practice that can only be defined as
predatory.
Since
Honsador was refusing to bond, I consulted a construction attorney who reviewed
all the documents, including construction blueprints, and said that Honsador
had to bond. He told me that Indemnity
Clauses are considered so heinous by the courts that they will award triple
damages if the Clause was not gone over with me.
Both
Honsador and their attorneys chose to completely ignore the construction
blueprints I sent them that showed [redacted] had made a mistake on the foundation.
The
Performance Order, which is referred to as a “Change Order” by Mr. [redacted], was that
I would pay half and that [redacted] would pay half to fix the concrete foundation,
even though none of it was my fault.
During negotiations I said that Honsador should pick up the other half
if [redacted] could not afford it since they were bonding and they said no. I agreed to pay half because I could
not afford to have the project stalled any longer. At the meeting, [redacted] of [redacted] Construction told
Honsador that he did not have enough money to complete the project.
Lengo
then went on to cut corners on the construction of the house, did not provide
adequate oversight, and worked other jobs, going many months over his second
deadline, which was already moved 5 months back to accommodate the long delay
in resolving the foundation problem due to his walking off the project and
Honsador’s stonewalling. Honsador
did nothing to keep [redacted] on schedule.
When bonding Honsador is vouching that he will complete on time.
Lengo
Construction recently advertised in the Maui News as building Honsador Lumber’s
Model Kit Homes for them. Mr.
[redacted] is one of Honsador’s best customers in purchasing building supplies. Most
of the building materials used in the construction of my house came from
Honsador. There is a conflict of
interests when it comes to Honsador protecting the homebuilder when [redacted] fails
to perform as general contractor. They will protect [redacted] Construction first.
Some
States do not allow building material companies such as Honsador Lumber to give
construction bonds because of conflicts of interests. In my opinion this is a good direction for Hawaii to
follow. At the very least,
potential conflicts of interests such as those with Honsador Lumber and Lengo
Construction need to be disclosed to consumers before bonding.
Honsador
went on to release almost all of the final payment to [redacted] in advance of
completion, leaving so little in the Bond that there was no incentive for Lengo
to complete or fix damaged and improperly installed items. With under $5,000 left in the Bond’s
final payment, I again contacted a construction attorney to find out if I could
move into the unfinished house, as the house had been under construction over
two years, on a contract that was originally 8 months. The delay was causing hardship and added
expense to my family, which Honsador was aware of. The first check I wrote to Honsador to begin construction is
dated 06/27/2012 on their Bond Detail Report.
The
attorney told me to write to Honsador telling them my intentions, and not to
release the remaining money before the items were fixed and home completed, and
to send Honsador a list of the problems.
This I did and then moved in later on 10/06/14, only to have Honsador go
on to release all of the remaining money the day I moved in without telling me,
despite the work that had not been completed, work not done according to plans,
substandard work done that needed repair, and no final walkthrough. The attorney said their action was
illegal.
Sincerely,
[redacted]