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kathrynepost

Breach of Contract??

Katie Hunter
10 months ago

A few of you have probably seen my posts about our new build that had a mold problem. There was mold throughout the framing of our new build. We have an immune compromised 5yo with severe mold allergies. Yes, the builder was aware and promised to take extra care of the house. No, this wasn’t in the contract. Yes, I wish I had written something but I don’t even think it would have mattered given how this has transpired. Our builder denied it was mold. He didn’t have a mold inspector they used (bc they have never had mold in their homes…of course) but when their lumberyard told them to inspect the home for mold, the builder claimed he (the builder) inspected it thoroughly and the vast majority of discoloration was “green lumber yard paint”. Anything he wasn’t sure of, he said he would clean with bleach and water.

I don’t want to get into a mold debate but as anyone can guess, that wasn’t going to ease our worries. They allowed us to bring an industrial hygienist in. The builder was there, was pretty mortified (or acted like he was) to learn almost all of the discolorations were mold. He empathized with us, was angry and said he was going to make his lumberyard pay once we (I) got the results back. He even told our inspector he wanted him to do a post remediation test and said the lumberyard is going us reimburse you for all of this testing. Fast forward, results are BAD. Like high levels of multiple toxigenic molds on all but 2 of the 20 samples taken. Active mold growth on most and dead spores on others. Our hygienist said the wood is salvageable but wrote an extensive remediation plan that was necessary to ensure the house passed post remediation testing. Meanwhile our builders seemed to realize their lumberyard wasn’t going to pay for this, but insisted we share the results to build their case to them. They insisted they were going to make things right. Meanwhile they called 4 remediation companies out to give general quotes, non of which followed the plans written up. None of which would pass the post remediation testing. None of which would provide a safe environment for our son.
They came back a week later, and what we thought was going to be some solution to make it right, was really them stating while they know we had a preferred remediation method we hoped was followed, they simply can’t take on the cost of what our mold guy guessed correct remediation would entail. They asked for the quote from the preferred remediation company our mold scientist had recommended and I reminded them that when I sent the results to them, that we had been in touch with our remediation company but to give an accurate quote they needed to come on site. The builder, in an attempt to instill power, said well they need to come out tomorrow if they want to be considered. Of course he assumed by waiting to call me until 5pm and hitting me with a deadline we couldn’t deliver on, he could claim he had no choice bc time was of the essence. Well in a panic, I pleaded with the remediation company and begged them to come out. They had all of the reports and the protocol but came and did a 3.5 hour thermal and 3-d imaging of every part of the house.
At that inspection, our builder was nervous. He told us to expect a call from his brother that evening. We had an idea that they were going to try and make us some offer. Around 7pm, brother 2 called me. He stated he felt horrible and knew this wasn’t what we envisioned when we went under contract in our dream home. He stated they simply can’t take on the large costs of remediation by (what he suspected) it would show needs to be done once we got the quote. He stated the last thing he wants is for them to use a company that can’t do the job and then our son gets sick in the house, then added and then it bites us. He said his brother was going to send us an email outlining the options going forward but wanted to discuss the option of canceling the contract and returning our deposit and earnest money ($165k) so that we can find a safe house for our son. He said he didn’t want us to be “trapped” and didn’t think it was fair for us to have to pay for an extensive remediation (how sweet of him). I stated while I was devastated that by the idea of not moving into this house, I thought it was respectful and kind of him to acknowledge the position we are in. I said we would look out for the email and go over it.


The next day they send an email stating we have 3 options.

  1. They will remediate the mold per cdc standards with bleach and water.
  2. The lumber yard agrees to pay for all costs of our testing and our remediation plan.
  3. We can pay for our “preferred contractor”.
  4. An attached addendum stating they will allow us to cancel the contract and if they get a deal less than ours, at closing they will refund us our full deposit. If they get one less than ours, they will only give us a partial refund. If they get an offer over ours, they will refund us our full deposit.
    Is this fair?!!? Now we’re even more trapped and have to wait until February to potentially get some of our money back? How can we find a house with that kind of money not available? We never stated we wanted to cancel the contract, they did!
    We hired a construction lawyer and now it’s this battle and the last thing we wanted. I am so upset and we’re bleeding money by this lawyer going to war with their lawyer. Our lawyer wants to just demand the money or he’s going to take action. We’re in an apartment because we sold our house. We can’t send our kids to school next month bc them going back to their school was bc we were under contract in the town our school is in. We have 2 small kids and a dog in a one bedroom apartment. They have lied to us about so many things and we have it all documented but we just want our money back and to find some relief. What are our options other than filing lawsuits and dragging this out? If it goes that route, I feel like we deserve much more than just our deposit back. What else are we entitled to if this keeps going in this direction?

Comments (79)

  • res2architect
    10 months ago

    The architect would only be important if he/she worked for you or his/her documents were a part of your contract.

  • res2architect
    10 months ago
    last modified: 10 months ago

    I think it is not constructive to continue saying the contractor somehow caused the mold unless you have clear evidence of inappropriate handling or storage of the lumber on site or at the supplier's yard.

  • Katie Hunter
    Original Author
    10 months ago

    @homechef I meant if we take it and turn around and sell it, we would then be the owner who is selling a home no longer at depreciated value. I think by saying it has to pass a post remediation inspection, that is offering them the option of doing their preferred remediation at their cost. That is compromise but I’m not willing to allow that if it isn’t successful.
    In terms of relisting the property, the market as appreciated so they should get more than we paid. But I don’t see it being a compromise to allow them to keep more of our money if they can’t sell it for more. Since they admitted they should not have put that lumber in, how is that our responsibility to financially pay for their admitted mistake in doing so? I mean that as logical and unemotionally charged as possible. I can’t see how they hold us accountable for something they admit they should never have done.

  • Katie Hunter
    Original Author
    10 months ago

    @res2architect, we do have the plans. Those were provided to us.

  • res2architect
    10 months ago
    last modified: 10 months ago

    If you will never be comfortable in the house, stop trying to win the fight and take the best deal and move on. Take this opportunity to design a house to protect your child.

  • Katie Hunter
    Original Author
    10 months ago

    That’s the thing, we will feel comfortable if it passes post remediation testing.

  • WestCoast Hopeful
    10 months ago

    Sadly if this was not a custom home, which it really sounds like it wasn’t, you don’t have a lot of control. No one is working for you and your interests. You are upset, and likely rightly so. At this point based on what you’ve said here is doesn’t sound like you will be happy in the home. I would get out asap.

  • res2architect
    10 months ago

    What is your leverage to get the builder to agree to that? The threat of legal action? Is that cost and delay in your analysis?

    If this is really dangerous mold, I would not trust testing to prove it was all gone.

  • bichonbabe
    10 months ago

    I can't see how your are ever going to be comfortable in this house. I think you need to take a deep breath and stop letting your emotions be your facts. You're lucky that the builder will let you walk away. I understand that you need to protect your child but this is a business transaction. I had a neighbor once that had very similar opinions about mold and they built a concrete house and were able to relax and enjoy it.

  • Katie Hunter
    Original Author
    10 months ago

    It’s a business transaction for me too. $168k is a lot of money. For us, not getting that back prevents us from being able to find a house and provide that towards a down payment. For them, they get to keep building as they planned without any risk or loss. Meanwhile we lost a lot.

  • WestCoast Hopeful
    10 months ago

    So that is a decent amount of money. I would want that back too. Contact a construction lawyer and figure out next steps.

  • bichonbabe
    10 months ago

    The builder said he’d return your deposit. Take it, move on and learn from the unfortunate experience.

  • Katie Hunter
    Original Author
    10 months ago

    @res2architect our EPA whose testing found that will be the one testing post remediation. I trust if he finds it to be cleared, then we are safe. He’s an industrial scientist who has worked for the US senate and US EPA. I trust his initial testing and will trust his post testing. But though the builders allowed him to do initial testing (at our expense) received the reports and even asked him to do post remediation testing, now that the extent of damage has been uncovered, I doubt they will let him perform post testing which is the only way to show the job has been effectively completed.

  • Katie Hunter
    Original Author
    10 months ago

    @bichonbabe I would have taken that offer except it’s dependent on the next buyers offer, whether they pay the same deposit % (which wasn’t negotiable for us so not sure why it would be for someone else) and keeps us in the dark about what they’re doing behind the scenes. Technically they could decide to take a lower offer intentionally to hold onto half of our deposit and still break even bc why not? Why not find another to create a scenario that appears fair on paper but really is manipulated behind the scenes, just like they have done since day 1? When the builder called me to express his “sincere” apologies for everything and offered us an option of not risking our sons health AND not being trapped financially only to put in writing that they would accept our wish to cancel dependent more or less on the closing amount (in 6-8 months from now) it is clear how deceitful they are.

  • Monique
    10 months ago
    last modified: 10 months ago

    What is the cost difference between the industry standard mold remediation that the builder offered vs your super duper remediation? Would you be willing to pay for that difference out of pocket? If so, have the builder issue a credit for that figure, and hire your preferred specialist after closing. That results in a quicker close for the builder, and for you also.

    If you won’t pay for that difference out of pocket, then expect the builder to play hardball here, and you will lose your entire deposit. They have not been negligent, or done anything outside standard building practices. The resultant home is acceptable to the industry standard, and to the sales market. Your requests are non standard, and will cost them a lot of money. Yet they have attempted to work with you, and even offered to give your money back. . You have unreasonably refused all options presented. That right there all but guaranteed that any court would find for the builder.

    Your long rambling monologues without breaks or punctuation are not helping you here.

  • Monique
    10 months ago


    "Mold will not grow once the materials dry out."


    Framing lumber that is properly vapor sealing inside a wall, and dry, will never cause you any issues. There will be more active spores floating in the air from your PNW damp location than there will be from your framing.


    Take the refund the builder is offering and move to Arizona. Someone with your professed issues should not even live in a damp environment like the PNW. If you will not move to the desert, then you are the one that is all talk and no action.

  • WestCoast Hopeful
    10 months ago

    Sorry I’m missing something. Are you being offered a refund? If so, yes take it.

  • elcieg
    10 months ago
    last modified: 10 months ago

    @Katie Hunter, I feel sorry for you, and I am concerned for you. In every post since May 12th, something has been wrong: placement of electrical outlets, the sub floor, mold you discovered on May 12th, yet this most recent post is shy of two months later and you are still looking for answers for the mold and money. Every commentator has given best advice (whether you liked the presentation or not), so you can see why you are being questioned for your motive.

    17 hours ago you added this post and 17 hours ago you, also, added this post:

    https://www.houzz.com/discussions/6386206/refund-on-deposit-due-to-builder-default


    I'll be honest with you about my reaction. I think you are in over your head with a 1.2M build. I think you want out of the contract and you are grabbing at straws, looking for us to give you an out. We are in no position to help you, IMO, because, bottom line, you don't want this deal to go through and we are wasting out breath, so to speak.

    Talk this over with your husband. Make sure he reads all your posts. I think you are on the edge and he needs to read what you have written. You are in this mess together, (although you have not mentioned his take on your dilemma), so solve it together. What ever you decide, do it and move on.

  • PRO
    Joseph Corlett, LLC
    10 months ago
    last modified: 10 months ago

    "An attached addendum stating they will allow us to cancel the contract and if they get a deal less than ours, at closing they will refund us our full deposit. If they get one less than ours, they will only give us a partial refund. If they get an offer over ours, they will refund us our full deposit.
    Is this fair?!!?"


    No, it isn't fair. How much they get for the house afterward is irrelevant. If it is relevant, they should offer to split the profits of any offer over yours as a fee for the use of your money.


    This is posturing. Contract, schmontract. You need to make them believe that getting rid of you quickly and cleanly is in their best interest.

  • Katie Hunter
    Original Author
    10 months ago

    @elcieg this is a 1.6m home and we are not in over our heads in terms of house budget. For you to assume you knew the home amount shows me you’re not all that educated so I’m glad you’re not giving me advice. Did we budget for $200k for remediation and medical bills, no. Do we think we need to budget for remediation in a new home, no. Thank you for your sympathies but you are incorrect that I want you to give me an out. I assumed this forum was filled with professionals who were helpful and not judgmental. I am actually shocked to find how untrue that is. There are some people who are able to give good advice but many just seem like they have nothing better to do than spend time on a a building forum passing judgement. I actually feel bad for you too for having nothing better to do than hop on here to tell me to move on. Its pretty pathetic you felt the need to respond. Oh I’ll pass onto my husband your helpful advice to move on. Good luck to you!

  • WestCoast Hopeful
    10 months ago

    What has your lawyer said?

  • Katie Hunter
    Original Author
    10 months ago

    @monique since you appear to be a mold expert, can you show me where it states mold species that release mycotoxins are safe in homes? We are not talking about lumberyard mold. This has been lab tested and is active mold species that are health concerns even for people not immune compromised. I will put my money where my mouth is it in fact you are an environmental scientist, a doctor AND a builder! Seriously please find a source that states mold species releasing mycotoxins are safe for humans.

  • Katie Hunter
    Original Author
    10 months ago

    @westcoast hopeful he’s planning on filing claims for multiple breaches of contract and putting a lien on the property bc they want to relist it without an agreement on any terms. I am not out to drag this out and try and have this tied up and either of up spending unnecessary money to do so. I just want to agree to the house being remediated and passing post inspection testing and if that’s not an option (which I get from the 58 comments that it seems like it isn’t a fair request to have mycotoxins still in the home) I would like to have the money so we can find another house and not be tied up in their next sales transaction. @josephcortlett is the only one who has given any indication that they may not be playing totally fair. At the same time, I’m not here to try and destroy anyone nor do I feel entitled to do so.

  • WestCoast Hopeful
    10 months ago

    I think it’s reasonable for you to get deposit back. In all honesty it’s a big chunk of money. The builder doesn’t want to deal with you anymore and wants to cut their losses. I know this all sucks in terms of money, time, and the emotional load too. It’s all very bad. Building is brutally stressful under good circumstances and yours are not good. I would really try and get out of this. Even if you take a small loss. Where are you building?

  • Joel Hunter
    10 months ago

    @elcieg this is the husband. I appreciate your concern and making sure I am aware of these posts. As someone intimately involved in this situation, it brings my wife comfort to write some of these posts as she processes this terrible situation. It would seem that this app would be a place where there can be helpful interaction and insight into various challenging situations. Obviously not.

    Frankly, a lot of people on this thread seem to have a fetish for arguing or talking down to others. I’m not falling for that nonsense and refuse to partake in that kind of perversion.

    It seems there are a bunch of uneducated participants that want to protect and defend something indefensible.

  • WestCoast Hopeful
    10 months ago

    This site is both amazing and awful. It can be condescending and rude, harsh and honest, helpful and kind, and all things in the middle! It’s how free internet advice goes really. For years I’ve butted heads with a few who are overly vocal in negative ways, in my opinion, and then been attacked for saying so. It really requires thick skin to stay here but it is worth it often. The other piece is that advice that doesn’t work can just be ignored. I’m really sorry your family is navigating this really tricky situation.

  • ladybug74
    10 months ago

    My sympathies for such a stressful situation. I think you said you have a lawyer helping out now? Can you perhaps offer to sign a confidentiality agreement in exchange for getting a full refund of your deposit? No strings to any future purchase by a new buyer.

  • cpartist
    10 months ago

    If it were me, I'd be doing just as you're doing. I hear you since I happen to be very allergic. The joke I always tell a new doctor when they ask what I'm allergic to is that they should ask me what I'm not allergic to since that list is shorter

    I would let your lawyer know that what you want is to get your money back and get out of building the house. Period.


  • PRO
    Mark Bischak, Architect
    10 months ago

    Whatever happens, retain the movie and book rights.

  • rockybird
    10 months ago

    What mold species did they find?

  • Katie Hunter
    Original Author
    10 months ago

    @rockybird There were “high” levels of each of these species: Acremonium, aspergillus, Aureobasidium, cladosporium, paecilomyces, penicillium and trichoderma which produce mycotoxins that are toxigenic especially to sensitive or immune compromised individuals.
    Most of them were actual active mold growth too while only a few were contaminated with settled or dead spores.

  • J Sk
    10 months ago

    Why "high"?

  • bry911
    10 months ago
    last modified: 10 months ago

    @Joel Hunter & @Katie Hunter - There is value in the fact that many people don't see things the way you do.

    In the end, whether or not your contractor breached is largely immaterial. Here is the rather dark side of consumer contracts. Your contractor has a fairly significant chunk of your money and your contract is just a piece of paper, with all the value of any other piece of paper, unless you are willing to have a court enforce it. Even if there is a material breach, your contract isn't going to force your contractor to return the money. He could build the wrong house on your lot and still the only way to ensure you get your money back is to go through the courts.

    So, what exactly are you trying to accomplish here on Houzz? If it is just cathartic to vent here, that is fine, but that information would be helpful for those who have been kind enough to invest some of their time into your problem.

    In the interest of helping you... We can assume your contractor will be in a loss position if they pay for your preferred remediation and they don't want to lose money on this house. The best/easiest/cheapest way to maximize your recovery is to convince the builder that it would be cheaper to sever the relationship than it would be to let you buy the house. The problem being, this is a game of chicken with all the dangers of a game of chicken, and I am not sure that I would advise this and I would certainly advise not putting this in writing. However, were this my home, I would start saying things like, "Choose whichever method of remediation that is sufficient to address the issue. We are only interested in the results. You understand the risk of failure as well as we do. However, we will be testing immediately after closing and will seek recovery of any required remediation at that point."

    Basically, put them on notice that you are going to sue them if their remediation fails and if you can slip in there that their refusal to test before closing is just better for your case, then do that.

    If you are uncomfortable saying that, you can have your attorney simply put them on notice that any deficiency in the remediation will be pursued after closing. If they have half a brain they should run away from you as fast as they can. However, sometimes half a brain is generous.

  • just_janni
    10 months ago

    Take bry's advice. Make them want you gone. Either by the hint of future litigation post close or.....


    If this is a spec home builder (and not a national production builder), they are used to developing a house and having their money tied up in it. If they want to keep your deposit while they build and try to sell / market, then say you want to be treated like an investor - weekly progress meetings, finishing selections, marketing plans, review any / all offers, etc. Share in profits if sold for more than your sales price, etc. Seems fair since you'd be financing their build - you would want to protect your "investment".


    Builders do this for a living. It's a business. They count on you not treating this like a business negotation. They've also been through this (or something like this) before - so it's different for them. You HAVE TO drive the emotion out of this in order to be effective.


    Good luck - and hope that you can close this chapter and find the best solution for your family - perhaps framing in steel is the right answer too and other materials that are more resistant to the allergens that are so detrimental to your son's health.

  • bry911
    10 months ago

    The crux of this argument/action... whatever you want to call it is: what has become the contracted definition of an acceptable standard. We have no way of actually knowing that.


    Contracts are not comprehensive documents, complications that are insufficiently covered in the contract regularly occur. When those things occur the parties can either attempt to negotiate a settlement/addendum or they can go to the courts to adjudicate the issue. The actions of the parties and any communication often represent an addendum to the contract.

    Parties regularly create addendums that are much more restrictive than the original contract. Which is the crux of the problem here, the OP's attorney is likely going to argue that the builder's promises to correct constituted a settlement of the issue that they are now in breach of. Which is not unreasonable.

    They may have been better off if they simply refused to allow the testing. Now that they have, they have essentially admitted this is a problem and if they don't allow testing after the remediation and the mold is still there then I don't see how they can claim it is within standards. You can't put the milk back in the cow.

    So with all due respect to the legal analysis... this is a mess and there is no "right answer" here. Which is common in contract cases, in reality most cases that actually see any type of court are just "attorneys for the plaintiff argue..." and "attorneys for the defense argue...."


  • Katie Hunter
    Original Author
    10 months ago

    @just-janni how do we outline those terms and have them held accountable to that if we were to go that route? Basically, how will we know anything that is going on with the build or in their relist addendum, know showings, offers, payments etc for new purchaser? They want to hold onto our money which is not ideal but when we have been the buyers, they have pulled some shady behind the scenes stuff. I can’t imagine we will be actually made aware of anything actually going on. They could come back and say well we sold the home for 1.3M and we’re keeping your money and you owe us more to make up for the deficit. We are “in the hole” like Andy Defresne in Shawshank, trapped and in the dark.

  • just_janni
    10 months ago

    You'll need your attorney's help to draft a response to their offer of how you can recoup your deposit. It can be done BY you - but you'll want the attorney to coach you. You'll have to ensure they agree with the plan and how to make it binding, etc - but the idea is to make the option that they have offered (refund deposit when the house sells) so unattractive that they decide the least risky / least painful option is for them to part with money NOW so that you are not involved with them long term. I could see things like being added to the listing agreement with the marketing firm or having them sign something that all offers are shared with you by the agent, etc. Signing an agreement with them starting the refund parameters, of course, would be required.


    But now - without emotion and with counsel, you are on a more level playing field than you were going into the home purchase to begin with. I suspect you used the builder's normal contract and made few, if any, revisions to it. You are in a different place now and don't have to sign a one sided agreement.

  • PRO
    Joseph Corlett, LLC
    10 months ago

    If the builder refunds, he's going to have to disclose this problem to a potential buyer. Now I know why he's worried about selling it for as much as you've agreed to pay. He'd be nuts to let you off the hook until he has a new buyer to whom he's disclosed this problem.

  • bry911
    10 months ago

    If the builder refunds, he's going to have to disclose this problem to a potential buyer.


    Few states require a disclosure form, or disclosures, for new construction homes. Some states only require disclosure if the builder is not offering a warranty.

  • bichonbabe
    10 months ago

    There is no federal requirement to disclose mold , states, counties and cities might vary.

  • PRO
    Strawberry Patch Designs
    10 months ago

    I'm sorry you are having a difficult build. Your lawyer should be the one guiding you through this. Just let us know the results!

  • A M
    10 months ago

    There were “high” levels of each of these species: Acremonium, aspergillus, Aureobasidium, cladosporium, paecilomyces, penicillium and trichoderma which produce mycotoxins that are toxigenic especially to sensitive or immune compromised individuals.


    For clarification, these are the genus classification, not the particularized species. Most of these identified classes contain hundreds of species and some of which may be harmful to sensitive to individuals, but that would need to be a conversation with an individual physician. For example, aspergillus contains the species A. fumigatus, A. niger, A. flavus, and A. oryzae, are allergens.


    To be clear, I am not commenting OP's specific issue or health implications but am trying to make clear that there are hundreds and hundred of species contained within each genus, some of which may be harmful and some of which may not be.

  • elcieg
    10 months ago
    last modified: 10 months ago

    Yet to hear what your attorney has said to you. You do have an attorney? If not, and you take some advice given here and it fails, miserably, are you going to start a new post asking if you can sue the houzz commentator for poor advice?

    What has been going on for the last two months? When you notice something, why do you not resolve it immediately? Why did you not issue a stop work order? The building inspector, what are his comments?

    All the hours you have wasted asking over and over, for the past months, looking for opinions to solve your dilemma; words which could have been put to better use if you had addressed them to an attorney.

    You will be amazed how an attorney will help with giving your wife "comfort" for which she is searching.

  • Katie Hunter
    Original Author
    10 months ago

    @jsk why high? Are you saying why are they so bad? Or are you saying how was “high” determined. Have you ever had lab work done at a doctors office?

  • J Sk
    10 months ago

    I asked why you quoted " high "?

  • Katie Hunter
    Original Author
    10 months ago

    @cpartist what have you found helps with allergies specifically to environmental ones pertaining to new homes?

  • PRO
    Yonder Way Design
    10 months ago

    Good luck with finding a new home that meets your standards. Even though it is likely more expensive, you may want to consider modular, built in a factory, instead of site built. Site built will all have mold. Add on a super upgraded multi stage filtered HVAC system with a filtered ERV. Again, much more expensive. Building much smaller will allow the needed upgrades to happen.

  • Katie Hunter
    Original Author
    10 months ago

    @yonder thank you! I need to do my research. Now that we have our house or house , and assuming we do get this money back, hopefully we make better decisions.

  • cpartist
    10 months ago

    @cpartist what have you found helps with allergies specifically to environmental ones pertaining to new homes?

    I had all ducts and filters etc professionally cleaned out before we moved into the house.

    I had a professional cleaning crew that only cleans new homes come in and clean the house twice before we moved in.

    I made sure we have a tight house to minimize dust.

    I have hepa filters in my bedroom. I have a MERV 11 filter on my HVAC.

    I have no carpeting. Only area rugs.

    No drapes.

    I do not keep windows or doors open in the house.