Episode 5: Renovate Without Regret: How to Protect Yourself Legally in Home Improvement Projects
Homeowners across the country are hitting pause on moving, holding tight to low-interest mortgages while still craving updated, functional spaces. With renovation demand rising and project costs climbing, understanding the legal side of home improvement has never mattered more.
In this episode, construction attorney Jared Gillman breaks down the legal risks most homeowners overlook. He explains how remodel projects go sideways, why due diligence matters, how lien rights actually work, and the contract protections every homeowner should have in place long before demo day begins.
Listen in as Jared shares the practical steps that help homeowners avoid costly surprises and how to spot red flags before they become expensive problems.
What You’ll Learn:
Why today’s interest-rate environment is pushing more homeowners toward renovation rather than relocation.
The most common disputes in construction projects and where they originate.
How to vet a contractor before signing anything.
What an owner’s representative does and why it can save homeowners time, money, and stress.
How lien laws work and how to avoid the risk of double payment.
The right way to structure payment schedules and track subcontractor releases.
When permits, licenses, and insurance become critical protections.
Why change orders create budget surprises and how to manage them proactively.
Ideas Worth Sharing:
“So much of [a dispute] can be adequately addressed at the front end of a project with having the right contract in place, having realistic expectations, and also with doing your due diligence on a contractor.” - Jared Gillman
“If you go ahead and put 50% upfront or 70% upfront, and… the contractor flakes on you for whatever reason… you're gonna put yourself in a bind.” - Jared Gillman
“Owner’s reps are excellent for everyone.” - Jared Gillman
Resources:
Jared Gillman: Website | LinkedIn | Email: jared@gillmanlawpa.com
About Our Guest:
Jared S. Gillman is the managing partner of Gillman Law, P.A., and a Florida Bar Board Certified Construction Law attorney, an honor held by only a small group of attorneys statewide. With over 14 years of experience, Jared advises homeowners, contractors, and developers on construction contracts, disputes, lien and insurance issues, and permitting matters, bringing big-firm expertise with a practical, client-focused approach. He also represents businesses and homeowner and condominium associations in litigation, arbitration, and mediation, drawing on his early career experience as an Assistant State Attorney where he tried numerous cases to verdict.
Connect with Us:
If you're ready to stop avoiding your finances and start building the future you deserve, schedule a free call with me at pelicanfinancialplanning.com and let’s create your personalized financial plan together.
And if you want ongoing guidance, clarity, and confidence as you grow your wealth, subscribe to our newsletter for financial insights delivered right to your inbox.
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Read the Transcript:
Jared Gilllman: When people come to me at the front end of a project, and they're like trying to get a contract figured out, and they have this feeling in their gut that it's not gonna go well. What I always say to them is, “So you guys are on your first date here, and it's already not going well. You want to get married and go start this project with them?”
“Oh no, I guess that doesn't make a lot of sense.”
Welcome to The Wealth Development Studio. I'm your host, Genevieve George, Senior Financial Advisor and Founder of Pelican Financial Planning & Wealth. Our goal for this episode is to provide clarity about today's financial topic, inspire you to be brave with your questions, and gain confidence in your financial future. So take a deep breath, grab your favorite cup of coffee, and step into the studio. Your dose of financial empowerment begins now.
Genevieve George: If you're like many homeowners right now, you've likely been holding onto a low-interest mortgage and don't wanna trade up into a new, higher-rate loan, but maybe you're also itching to update or expand your home.
The recent data backs what I'm hearing from folks. In a national poll, 55% of homeowners said that they'd rather renovate their current home than buy a new one. And the median cost of a typical US remodeling project is now around $24,000. So if you're thinking, “Maybe we just remodel instead of move,” this episode is for you.
Today I am joined by Jared Gillman, a construction attorney who helps homeowners navigate remodel contracts, lien laws, permits, and the fine print, the kind of stuff that too few people think about until it becomes a lawsuit. We'll talk about how to do a home improvement project smartly. What to watch out for, what to insist on before signing anything, and how to protect yourself legally so you get the renovation you want without running into costly surprises.
I don't like any costly surprises. So Jared, thank you so much for being here today. Maybe just talk to us about what you're seeing as far as the mortgage rate dynamics and what you're seeing, as far as the types of clients that you're working with over the last couple years.
Jared Gilllman: Sure. Thank you for having me. So the dynamic has been interesting over the last few years. Certainly, we saw just absolute craziness right after COVID with the low interest rates and around Palm Beach County in Florida, where everyone was trying to move to. So we have just an influx of people when the interest rates were low, and contractors were scrambling to cover the demand.
It was a lot of the contracts were just take it or leave it because contractors had job after job waiting for 'em. So if you wanted to modify their contracts or push back on price, they were just moving on to the next day. So it certainly has moved on from that. Buyers, owners have a little bit more negotiating power, so we've definitely seen it become a little bit more feasible to take on renovation projects.
In my world I work on everything from home renovations, new home builds, both on developer, owner, contractor side. During, when the interest rates were low, we saw just everyone was doing everything possible with their homes. It was very interesting. There was not a lot of fights going on at the end of construction projects.
Candidly, because money was so cheap where you had owners were feeling great about their stock portfolios, so they were happy to write that extra $10,000, $20,000 check to move on. And similarly, contractors had just unbelievable profits built into the projects where they could say, “Look, yeah, we agreed on X price, but I'll take a discount from that,” because they were still making a ton of money on the job they had the next job they wanted to get to, and they were also making a ton of money.
I'd never seen anything like that. But we've come back to a more normal, where people are willing to fight, where there's projects that don't go as planned. People aren't leaving the same amount of money on the table. So what I would say is we're probably more back into a normal dynamic than when we had the super low interest rates and the.
Yeah.
Genevieve George: Yeah. That's great. Thank you. And what are some of those common disputes that you're seeing come up, either on the owner side or the contractor side?
Jared Gilllman: Sure. So most of these disputes, they almost always come down to the quality of work, how long the work has taken, whether the elders have realistic expectations of what the work is, and so much of that can be adequately addressed at the front end of a project with having the right contract in place, with having realistic expectations, and also with doing your due diligence on a contractor. You would be amazed and Florida's Florida. Florida's always gonna have its own headlines of interesting folks.
And owners specifically will come to me after a project just on sideways, and they'll say, “Oh my gosh, I Googled my contractor, and he was arrested for fraud, and he did this, and he did that.: And you will say, “Yeah, all of this was out there when you signed your contract with him.”
If you would've looked at it ahead of time, you probably would've seen these red flags.
Genevieve George: Yeah. Yeah. Great. Yeah, so that is a huge thing is to do your homework on the front end, not just jump in and sign. One of the things that you have talked to me about over the years is the concept of an owner's rep.
So can you talk about what that means and who would normally have such a thing?
Jared Gilllman: Sure. Yeah. Owner's reps are great. They're great for owners, great for contractors. So an owner's rep is someone that the owner would hire to be their eyes and ears on a job. They make sure that the job is progressing on schedule.
They make sure that the work is the quality that it should be. They look at payment applications or invoices that you get from the contractor to make sure that the contractor is billing you for work that's actually done properly. Again, in Florida, we have our own little unique world down here where, people will, especially, we see it all the time in condo renovation, so we have snowbirds who will—they'll leave in April.
They want to have their condo renovated while they're gone and show back up in November and think it's gonna be done. I can't tell you. I get at least five calls every November where they say, “I left my contractor with a giant check in April. They told me it would be done. And they show back up in November and the project's nowhere near completed.”
And while the contractor is not right, you want to say to the owner, “What did you think was going to happen?” You go away for the season and you've got your owner’s rep who typically is a retired—they're an architect or an engineer, they're a GC, so they know what they're looking at and they stay on top the project.
They go look at it every week just to make sure that everything is moving along. We see that, like I said, in the condo context. Also, it's great in the association context where again, you've got a condo and the association takes on a big project. They're redoing the pool behind the complex.
They're redoing whatever big project capital improvement they've got going on. And as you can imagine, condos, there's no one that's really overseeing what's going on. And it's not until the project is so terribly sideways. And everyone's putting their fingers at the board. Everyone on the board is pointing the finger at each other and they're just in a really bad spot, and it's a lot of times these projects can't put the toothpaste back in the tube.
The fact that a project is now six months behind schedule and 30% over budget. And you come to me at that point you said, “What do you want me to do?” Had you had a good contract at the front, had you had someone who knew what they were doing, overseeing. You can't make up the time. The time is gone now, and it is what it is.
So owner’s reps are excellent for everyone.
Genevieve George: And that's primarily used where if I'm a homeowner, I would want an owner's rep because I am not physically there to watch the project continue to progress. Is that accurate description?
Jared Gilllman: Absolutely, because you're not there. Or because maybe you don't have the experience in the construction space to know that the work is being done correctly, or understanding what the lead time would be for materials.
Even if you are there, if you've got an owner's rep who's gonna understand, we've got custom cabinets going in this kitchen. We can't wait until the plumbing is done, until we order the cabinets because you're gonna be at a standstill for months waiting on the cabinet.
Genevieve George: Right. Right. So maybe it's not necessarily just not physically being there, but maybe not feeling knowledgeable enough to know that what you're being told is accurate.
Jared Gilllman: That's right.
Genevieve George: Yeah, you're being told what the progress is and maybe somebody that is more knowledgeable to know if that's accurate, if you're really not in tune with what's happening in the construction space. Yeah. I love that. You brought up another important concept, particularly with your condo example.
“I left a big check with my contractor. I left and work wasn't done.” So how should those payments schedules be structured and what makes the most sense? Or if you're entering into like kind of a remodel project and you don't wanna have that happen?
Jared Gilllman: Right. So you've gotta understand what the project you're doing is to pay for the entirety of a project that's certainly more labor intensive.
Something like painting. To pay for all of that up front doesn't make sense because the vast majority of that type of work, though, the materials are cheap. You've gotta understand that. But the flip side is, like we were talking about with custom cabinets, that cabinet maker's gonna want 50% upfront.
And so you do have to know that certain aspects of a project, you are gonna have to pay more upfront. For certain aspects, you're not. But the key in looking at the overall project is making sure that you've got enough money held back to finish the job in the event that you do have a dispute with your contractor.
So if you go ahead and put 50% upfront or 70% upfront, and your contractor, you're not happy with 'em. The contractor flakes on you for whatever reason. You have a falling out and you've only got 30%, but you've got 70% of the work to do. You're gonna put yourself in a bind. What are the other things really, really important?
I know you talked about this before—subcontractor. That's another thing that people, particularly those who are outta state. Florida has lien laws in place that are there to protect contractors. They're there to present, to protect the subs. And so making sure that you, at the start of the project, you record the documents that you're supposed to record.
You stay on top of the mail. Specifically what I'm talking about is there's this document here in Florida called a Notice of Commencement, and most places, Palm Beach included, they're not gonna give you a building permit without recording this Notice of Commencement. But what's really important on that is it gives all of your subs the address where they have to send their notices to.
So when a subcontractor starts within 45 days of their first work on a project, they send what's called a Notice to Owner. And that's because they don't have a contract with the owner, their way to say, “Hey, I'm here. I'm establishing my lien rights.” So what happens a lot of time is there's a space on the Notice of Commencement form where you would put the address where you want these notices sent to.
And in the condo example, a lot of people don't pay attention and they just put their condo address and so then they go outta town for season. They never actually get these Notice to Owners. And all of a sudden you've got subs who have been paid and they say, “We sent you an NTO.” Make sure that a copy of that notice goes to your place up north so that you do have an idea of who is working on your job, so that you can get lien releases as you make payments.
Genevieve George: Can you just explain that a little bit further? So if I'm going through a home remodel project and I've hired a GC to handle that, what would that lien mean for those subs, and what's the risk for me as the homeowner?
Jared Gilllman: So just to come right out that your risk is double payment. That's what it is. And Florida has mandatory provisions and contracts that talk about you being liable for double payment if you don't follow the proper releases and get the releases you need. So let's just say we're going back to your condo example, that you've got your GC who's gonna renovate your condo, and your GC hires their local cabinetmaker.
The cabinetmaker, before he starts is gonna go ahead and send, it's called the Notice to Owner to the owner. And again, that just says, Hey, I'm here. I'm gonna be working on your job. And I'm establishing my lien rights.
Genevieve George: Yeah. I'm doing the work, the cabinet maker saying I'm here, I'm doing the work. It's been set up through your GC, but I have a lien on your property until I've been paid for the work I've done.
Jared Gilllman: Correct. Correct. So you wanna make sure that every time you pay your GC, you're getting releases through the date of that payment from the subs. That's something that's super important because if you don't, let's just say you ignore the NTO that you got, you pay your contractor, let's say you pay him a hundred thousand dollars for the cabinet work, and he does not make that payment downstream to the sub, to the cabinet sub…
Genevieve George: That sub can still come at you.
Jared Gilllman: That sub is gonna come after you for that a hundred thousand dollars and they put a lien on your house and it's just like a mortgage where they're gonna—
Genevieve George: And then I’m calling my friend Jared.
Jared Gilllman: That's right. That's right.
Genevieve George: 'Cause I'm gonna need help fixing all of that after I've double paid and I want my money back.
Jared Gilllman: And that's it. My advice to you generally is going to be, you're gonna have to come out of pocket for that same amount a second time to get rid of the lien, and then we've gotta go sue the contractor to get your original a hundred thousand dollars back. It gets messy because again, it's like a mortgage.
They could foreclose on your house for nonpayment. Under Florida law, the attorney's fees are recoverable also. So every minute that you spend fighting with the subcontractor, but you're essentially chasing a moving target because they're gonna have attorney's fees that they're gonna want to be paid.
That just turns into a mess. So making sure that you take inventory of those Notice to Owners and that you get releases when you make your partial payments, your interim payments is just, it's one of the things that we see all the time.
Genevieve George: And is that something the average homeowner that's going through a construction project can expect to see, and are they generally managing that themselves?
Jared Gilllman: They should expect to see it. Depending on the size of the project, depending on the size of the subcontractor will often dictate whether the sub is going to send their Notice to Owner. Again, if you get this Notice to Owner, I will get these calls all the time. “Oh my God, there's a lien on my house.” No, it's just a notice.
It's just saying, “Hey, we're here.” So there's really nothing
Genevieve George: We will lien if you don't make sure I get paid.
Jared Gilllman: That's right. For example, in the context of different types of projects, the level of sophistication on the part of the sub will often determine whether they actually serve notice owners.
For example, we see building supply companies, if they're sending a thousand dollars worth of doors, you're getting a Notice to Owner because that's just what they do. Conversely, if you're doing, say, a pool project, something like that, where you've got the gunite sub who comes in and shoots the concrete, that's a pretty big ticket item.
So you can expect to see on a $30,000 subcontract, they're gonna protect their lien rights. They're gonna send you an NTO versus the guy who comes in and installs the tile. While he certainly has the right to do it, he's probably not.
Genevieve George: Okay. That's helpful.
So when we're going through this project, okay, so now I've got my GC and their subs, and I'm aware of the Notice to Owners and all of that. What about the permits and insurance? Like who's doing what in that, and what should I be looking for as a homeowner?
Jared Gilllman: Sure. So starting at the beginning of the project, typically it's gonna be your GC who is gonna pull the permits they need, and then if you've got certain specialty contractors, they won't need their own.
It's called a sub permit. It falls under, so GCs pulling the main permit, your electrical sub is gonna pull the electrical sub permit. Your plumbing contractor's gonna pull the plumbing subcontract. Again, those are other areas where you wanna pay attention because it's where those red flags will pop up.
So if you go to hire a GC and they say, “Oh, I'm gonna have my buddy pull the permit,” why are they doing it? Probably because they're not licensed, because they, you've gotta be a licensed contractor to pull a permit for somebody. But just from a logistics perspective, you can expect your GC to pull the permit.
You will be paying either directly for the permit, or you'll pay the contractor as pass through. So that's how the permit process works.
Genevieve George: Have you seen in the past where you said like a GC will say, I'm gonna run it through my buddy's gonna run the permit for me so that's like a red flag that they're not licensed?
If they said we could just run it as an owner? An owner contractor? Similar red flag, right?
Jared Gilllman: Similar red flag. Why are they doing that? “Oh, inspections take a long time. We're not gonna do any inspections.” At some point you're gonna have to face the consequences.
Even if the job goes great, you're gonna have to face the consequences because you're gonna go to sell your house and you're gonna have to disclose that there was all this unpermitted work done. That, of course, is gonna make your house less marketable. You're gonna have to then open permits. They may have to open walls because they're gonna wanna do their inspections.
So in the end it just ends up being more expensive.
Genevieve George: Yeah. Wow. It actually makes it sound, you think, “Oh, I'm just gonna get that bathroom redone,” and it's actually significantly more complex than it sounds. There's a little bit more that goes into it as far as those communications with the GC and all of that.
So there is a lot to stay on top of, so.
Jared Gilllman: That's right. I mean that, it's just a huge deal. You wanna make sure that your GC has most importantly is GL, general liability insurance. One of the things that is something I counsel owners on is get added to your GC’s GL policy as an additional insured.
Huge, huge. It costs them next to nothing to do. We usually will insert it into the contract. And what that actually does is it lets you, as an owner, make a claim on the GC’s insurance directly if something goes wrong. So you're not relying on, “Hey, I've gotta chase the contractor. Maybe he turns into insurance, maybe he doesn't.”
If you're an additional insured and you will get, it's a certificate of insurance and it'll show you down in that left hand corner. It'll say additional insured and have your name there. You wanna get a copy of that so that you understand you have confirmation that you are on their policy.
Genevieve George: What level of project would require that?
Jared Gilllman: I would put it on virtually every project because one of the things that's—contractor insurance is really a common misconception. This is something again that, I also get calls about all the time where if a contractor doesn't do their work right the owner thinks that they can just go make a claim on their insurance.
That's not how it works. The insurance law is essentially that a contractor's insurance will cover them for things that they damage that are not their own work. So you actually have to build yourself a little pyramid of making sure that the insurance is in the right place to understand what's gonna get covered.
Something, a prime example that I always give would be if your GC is building a new house. Generally speaking, the GC’s insurance is not gonna cover anything. 'Cause everything is that GCs work. Even those subs have done the work. Where you really get into is the second level of insurance, the subcontractor insurance.
Let's continue that with, you've got a new house and so you've got obviously the new roof on the house, roof fails, there's a leak. The insurance generally is not gonna cover the cost to put a new roof on because it wasn't installed correctly. But what the insurance will cover is the damage that water intrusion calls.
So you've got a bunch of drywall that needs to be replaced. You have insulation that needs to be replaced, maybe the wood floors got ruined. Roofers’ insurance is gonna cover that. So again, you've gotta have multiple levels of insurance and understanding this is not just, “Hey, my contractor walked off the job, his insurance is gonna pay for it.” Because it won’t.
Genevieve George: Yeah. And getting yourself added as an additional insured on those subs as well is like you're saying the roof and all of that. Wow. That's pretty involved, I would think. But it sounds like that's what you gotta do to protect yourself. What about my own homeowner's insurance?
If I'm having a remodel project done, is that gonna protect me against anything?
Jared Gilllman: It generally provides you very little protection, especially when you're doing a renovation. Homeowners insurance, it's not gonna cover the contractor's work. They get really iffy about covering most stuff. One of the most common insurance products that we recommend for owners is actually called a builder's risk policy.
And of course you would think, oh, the builder gets it. Well, no. Builder's risk is actually an insurance product for the owner. And that is when you have things that happen during the course of construction, that is the insurance product that's gonna cover it. So again, let's say you're getting your roof redone in the middle of it, we get a hurricane, we're here in Palm Beach County.
These kind of things happen.
Genevieve George: Yeah.
Jared Gilllman: And the project gets, the roof gets destroyed mid-construction. Your builder's risk policy is what's gonna cover the doing that roof for a second time. Because otherwise, if you don't have that, you are gonna have to be a contractor to do two roofs. That's because it wasn't his fault it blew away.
Yeah. Similarly, we see materials get stolen off of job sites and you get two new air conditioning units delivered to the front yard and they're sitting out there waiting. Somebody comes and steals them. It's your builder's risk policy that's gonna cover those. Otherwise, we're buying—
Genevieve George: Living in Florida. That's devastating. It's like, “Don't take my AC.”
Jared Gilllman: Yeah, and again, you've gotta look at what is your level of risk? What is the size of your project? Because builders’ risk policy can be expensive. But if you're doing a big project, if you're doing a new build, it's certainly something that I would recommend, or at least talking to someone about what your level of risk is with that.
Genevieve George: Sure. Yeah. Maybe your financial planner can help you understand if you can.
Jared Gilllman: Can you afford to do this project twice? Because that's currently what you’re looking at.
Genevieve George: You're right. Yeah. I don't want you to do the project twice, but can you afford it is definitely a big question.
So we talked a little bit about it. We've talked a lot about remodels, but from a legal standpoint, is there a big difference in what from a remodel to an actual new construction project?
Jared Gilllman: Sure. In Florida, we've got some new laws where we have mandatory builder warranties for new projects.
So generally speaking, you are going to get a little bit better protection in buying a new build and doing a new build. Typically speaking in doing new build, it's more expensive because you're just getting the finished product. There's no risk, but you also have a more defined scope to do your plans for.
One of the things, and again, this is something that comes up, is when you start a project, the more facts, the more details you have, the better. Because we see all the time in, for example, for renovations, I'm not really sure what I'm gonna want to do. They have allowances for what you can spend on your cabinets, what you can spend on your plumbing, and those will often end up, they turn into change orders because you pick something that was more expensive.
People tend to go into renovations with less to no plans and specifications, and then they will be upset because the contractor can't build his own. Of course he can't. You don't know what you're trying to do. Where that is, if you are building a new project, you're generally going into it with a full set of plans because you need them for permits.
You're going into it with all of your specs. So generally speaking, an owner will have their ducks in a row better if they're doing a new build, or obviously if they're just buying a new build, then you're buying what you're buying.
Genevieve George: Okay. Okay. You mentioned change orders and particularly change orders in the concept of, okay, I just went into this remodel.
I didn't have a full plan, I had an allowance, but maybe I picked some really over-the-top counter for my new kitchen and it ended up being pretty expensive. We'll call that scope creep, but what is your advice to homeowners going into, in either a new build or a remodel in conjunction with change orders?
Jared Gilllman: So we always put in the contracts a requirement that change orders be in writing and particularly in the residential context, people tend to get away with that it, I text them that it was, okay. Well, you wanna be able to, at the end of the project have, “Hey, here are all my emails with the builder, or here are all of my signed change orders,” which is obviously the best, where you say, “Hey, this is where we're going, this is what we're changing.”
But in talking about scope creep, and all of a sudden you get to the end of the project and go, “Oh my God, how did we get here?” Particularly when we're doing a cost plus project, the contractor give an update on the entire project costs with every month's payment application so that you can see, “Oh, we're headed over in the kitchen. We need to really stick to our budget in the bathroom.”
But at the end of the day, hey, this is on us. We went and pit, instead of the laminate countertops that were four bucks a foot, we went with the marble counters that are 20 bucks a foot. That's on us.
Genevieve George: Yeah. That's a choice. Yeah. Yeah. To talk to your financial planner about as well.
Okay, so it sounds like there is a lot involved. It can be managed if you get your ducks in a row and you're making sure all the contracts are appropriate and everybody's licensed and following, paying attention to your notices and all of that. But when would somebody need to hire an attorney?
Jared Gilllman: I think this is the old adage, an ounce of prevention is worth a pound cure. If you get your contracts, your plans, and your specs taken care of on the front end of the project, you are 90% of the way there and have yourself set up for success. Have a realistic expectation of what you're getting into.
If somebody tells you they can do a full hill renovation in two months, when everyone else is telling you six, that you're probably headed down the wrong path there.
Genevieve George: And for half the price too, Jared.
Jared Gilllman: That's right. That's right. No, but it really is. Getting your contracts in place on the front end will pay dividends at the end of a project.
Genevieve George: So if I'm working, I'm like going down the path. I've interviewed a couple GCs and now I'm like, okay, I'm set on this GC over here. I'm speaking with an attorney to say, “Can you review this contract? Make sure that. We're in good order here.” Is that is that accurate?
Jared Gilllman: That's exactly right. Typically, they'll have their proposal, we'll take their proposal and either we'll make changes that really industry standard or we will just make their proposal.
We'll take it to one of the contracts that we typically use for owners. We just attach it and say, “Hey, here's what it is,” and the typical cost on that. You're looking at a couple thousand dollars on that $100,00, $200,000, $300,000 renovation project. That's really gonna save you a lot of money in the end.
Genevieve George: Yeah. Prevent a lot of surprises, hopefully.
Jared Gilllman: That's right.
Genevieve George: And let's say, okay, we took all those steps and we thought we had all our ducks in a row, but things have just gone absolutely sideways and we're having a lot of disputes with the contractor, whatever the case may be. You know what happens then?
What is the start of that process to…?
Jared Gilllman: So that is often when I get the call.
Genevieve George: Yeah. Yeah.
Jared Gilllman: Truly the first piece of advice—
Genevieve George: In crisis too, by the way.
Jared Gilllman: That's right. The first piece of advice that often comes outta my mouth is, let's get a quote from another contractor to see what it's going to cost to fix the problem, finish the project.
So that you understand what you're getting yourself into and what the finances look like. Again, this is where we started, was if you've already paid contractor $70,000 on a $100,000-project and the contractor's significantly ahead of you, and you've got a bid that says it's gonna cost you $70,000 to finish it, because that's inevitably how it works.
You then understand, okay, if I go down the road of firing my contractor. Here's the money that I'm gonna have to come out of pocket to get the project done anyways, and then this is the size of the problem that I have to deal with in chasing the original contract. So one of the things I tell everyone is we don't treat a $5,000 problem the same way we treat a $50,000 problem or the same way we treat a $500,000 problem, right?
So understanding what the financial impact of terminating your GC is gonna be is the most important step when we start going down that route.
Genevieve George: Okay. That's important to know. That's good. And trying to prevent some of that on the front end by getting yourself organized earlier. Obviously, I don't want to put you out of business, Jared.
I want you to continue to operate and do what you do, but what is your advice to homeowners to help them? I think we somewhat covered that, but what would you tell somebody that's thinking about doing a construction project?
Jared Gilllman: Sure. So it's identify what your scope is, get bids, and do your research on the front end.
Make sure your contractor's licensed. Make sure when you plug them into Google that they were convicted of healthcare fraud two years ago. Because we joke about these things, but these are all things that I've fed into. And really paying attention to those front end red flags.
And then on top of that, having realistic expectations of what your project is going to be, where you, if you take it out of the construction context in any interaction you would have in the real world. Going back to the condo example, do you think it would go well to give someone a pile of money and just trust them to do the project in the next six months? It's just not realistic.
Genevieve George: Does everybody pay on the front end? It's fine. Nothing can go wrong.
Jared Gilllman: We’re having a realistic expectation of what you know you think makes sense to you. The continuation of that, being realistic, is don't be hypersensitive. Every project, particularly in renovations, it's not gonna come out perfect. It's just not. Do not expect perfection. There's somebody I know that says, don't let good enough be the enemy of perfection or how that saying goes.
But if it's good enough, we're not building the Taj Majal here that if something is off by a quarter of an inch, do you really think you're gonna rip out an entire backsplash to just tweak with the way the tiles are laid out slightly? No, that's not realistic. Be realistic in your project.
Genevieve George: And we've talked about a couple of these, what are those red flags that really merit somebody giving you a call? When are people, the non-pre planners, that should have called you at the earliest part of the contract, but what's happening that's making me call you in the moment?
Jared Gilllman: So the project is not making progress. It's the continued excuses. Your contractor will call you back, don't respond to emails. Things like that are certainly red flags. When you start hearing from subs, you start getting liens in the mail.
Again, those are obvious red flags that my contractor's not paying his subs downstream, and this is gonna turn into a real issue for me. Just continued broken promises. Promises, a lack of communication with a contractor. Those are the times where you say something is not right on the on this project.
Listen to your gut.
Genevieve George: Yeah. Yeah. That's important. Yeah. I think we often don't do that and just keep pushing on, and probably a phone call will make that a lot better. Okay. Okay, so how can our listeners get in touch with you and where are you able to work and help them from a geographic standpoint?
Jared Gilllman: Sure. So I'm licensed in the state of Florida. So I work throughout Florida and particularly my office is in Palm Beach Gardens, which is just northwest Palm South Florida.
But I deal with projects all throughout the state of Florida, everywhere from Keys to Jacksonville to Tallahassee. Yeah, anything in there. The best way to get me is always email. Jy email is jared@gillmanlawpa.com. And my website, gillmanlawpa.com. You can find me on there.
So yeah, when you're starting your project, reach out and let's have a discussion and figure out the best way to make your project successful.
Genevieve George: So if I'm a snowbird and I live in New York and I'm going to build or remodel something in Florida, I can work with you in Florida, even though I'm maybe not a Florida resident yet?
Jared Gilllman: Absolutely. And as long as the project is in Florida, that certainly falls under my license.
Genevieve George: And we'll put all of your contact information in the show notes too, but one last question for you, I like to ask this to everybody. So do you have a personal or a client financial mistake that you would like to see other people avoid?
It could be yourself.
Jared Gilllman: How long is this podcast? No, I mean, some of the stuff that we've talked about specific to construction is where contractors are not paying downstream, they're not paying their subs. You end up getting stuck paying double. You end up having to pay when the red flags are there. They don't get any that. One of the things I've said when people come to me at the front end of a project, and they're like trying to get a contract figured out, and they have this feeling in their gut that it's not gonna go well.
And what I always say to them is, “Okay so you guys are on like your first date here and it's already ongoing well. You want to get married and go start this project with them.” “Oh, no, I guess that doesn't make a lot of sense.”
Genevieve George: Right. Yeah. So trust your gut as soon as you're getting those red flags.
Jared Gilllman: That's exactly right.
But really from the financial aspect on projects, it's seeing those red flags and continuing to go down that path and think it's gonna get better, because it never does. If a contractor doesn't pay his subs, he's not gonna do the last part of the project for free to make it up to you because you can just expect more liens.
Genevieve George: Yeah. Okay. All right. That's helpful. All right. Jared, thank you so much for being here and for sharing this information with us.
Jared Gilllman: Absolutely. Thanks for having me.
That's it for today's episode of The Wealth Development Studio. Remember, financial clarity is powerful. Do you need help with your financial plan? Go to pelicanfinancialplanning.com to schedule a call with me. Until next time.
