I don't think this space even allows me enough room to tell the entire story from start to finish but I'll try to give a condensed version.
Although our contract required Jaehne to obtain Builder's Liability insurance, he failed to do so for several months. By the time I discovered he had never purchased the required insurance, our concrete slab had already been poured and the house framing was partially done. Thus, his builder's liability insurance will not cover any problems related to those portions of the build and, now barely 18 months after moving into our new home, we are definitely having severe foundation problems.
As the build progresses, it also became apparent that Jaehne had lied when he claimed that he had the financial ability to front at least $100,000 between draws. We gave him a check for $25000 early on that he CLAIMED was for a downpayment on our wnidow and door package because "it is a custom order and they want at least half before they'll even start making the windows and doors" and then on his first bank draw he claimed another $20,000 was to go to finish paying for the windows and doors. But, shortly after our windows and doors had been installed, we got hit with a lien for $54,000 from the window and door supplier. They had never been paid a single penny. Jaehne was never able to explain where the $45,000 that we gave him for the windows and doors had been spent. Instead, we wound up having to pay off the $54,000 lien because Jaehne claimed he was broke.
I wanted to fire Jaehne at that point but our banker (Clay Ingram - First National Bastrop) convinced us that if we fired Jaehne our house would never get finished. So, we agreed to not fire Jaehne at that time but instead, Jaehne would submit bills from subcontractors and materialmen to us and we would have draw checks made out directly to the subs and materialmen. Once the house completely finished, if there was still any money left over, Jaehne would collect that as his profit. One would have thought since he no longer had to invest any of his own money in our build, Jaehne would have hurried to get our house finished so that he could collect his profit. All he had to do was keep scheduling work and supervising it and pass the bills on to me.
Instead, from that point forward, he did almost no work at all on our house. The only major thing that was accomplished over the next three months was that the driveway was poured and we paid for both the materials and the labor for that job with draw checks directly to the subcontractors and suppliers. Nevertheless about three months months after agreeing to wait until the house was finished for his "profit," Jaehne started demanding that we give him another draw.
We scheduled a meeting with Jaehne on Dec 26, 2008 at FNB -Bastrop to attempt to work thru the financial issues.
The day before Christmas, a subcontractor (whom Jaehne had supposedly paid months before) called to tell us that Jaehne had given him a bad check for the $12,000 he was owed for work done on our house. The man's very pregnant wife met with us and Jaehne at FNB the day after Christmas and after Jaehne admitted to owing the money, we paid that contractor.
At that point I tried to get a complete accounting but Jaehne would/could never provide proper documentation. Instead, he gave us a list he made up where he claimed HE had spent $269,000 building our house. But, the list included the $54,000 lien that WE had paid, plus another check for $500 written TO us to reimburse us for a change order that we decided not to do after all and his $500 check had bounced and he had never made it good! I insisted he had to back up the "list" with copies of canceled checks, invoices materials/supplies, and lien releases from subcontractors. Over the next 2 months, Jaehne fed us documents piecemeal. But an investigation into those documents he provided (by calling the subs/suppliers) showed that he had apparently used our money to pay debts arising from his previous business ventures; that he was attempting to double (and sometimes triple) bill us for the same work; that he was billing us for materials and supplies that were never used in our home (but apparently WERE used in a spec home he was building at the same time); that he had solicited false lien waivers; that he had paid sub-contractors with rubber checks; etc. etc. etc.
This dishonest was the final straw. I fired him.
But poor record-keeping and dishonesty were not the only issues we faced. Thoughout our build we also had issues with Jaehne's poor building practices... and his absolute refusal to honestly address those issues.
Among other things:
* Rather than reject concrete that had sat in the trucks too long before being discharged, Jaehne (or Jaehne?s agent and subcontractor, Bundage Pumping) authorized water to be added on-site to two out of eleven loads of concrete. Ten gallons of water was added to one load and thirty gallons of water was added to another load. Adding extra water to concrete decreases its strength. We did not learn of the watered concrete until we got copies of the concrete supplier's delivery records in early 2009. However, even as early as July 2008, a severe crack that developed across our screen porch area. It was wide enough then to stand a quarter upright but Jaehne claimed it was "just a surface crack". We also had issues with severe honeycombing around the perimeter of the slab - so bad in many places that the rebar was exposed. Jaehne was going to "fix that" at the end of the build. Now, two years after moving into our home, we have multiple severe cracks in our garage and porch areas and are having to spend thousdand of dollars in additional money to have the garage foundation stablized and then repair framing that has bowed out of true.
* Jaehne totally ignored the fact that we wanted open-web joists between the two floors of our house so that HVAC ductwork could be kept within the heated/cooled envelope of the house. (There were two closets on the original plans to house the two HVAC units). Instead he used I-beam joists. Even after this discrepancy was pointed out to him before the second floor was framed, and he was told to "Before you frame the second floor, TALK TO AN ENGINEER and make sure that holes can be cut through those i-beams large enough to allow HVAC ducts to be run between the floors. If that is possible, you can keep the i-beams. Otherwise you need to replace them with open-web joists before you frame the second floor." Instead Jaehne rushed ahead and framed the second floor and the roof. Then when he was asked, "DID YOU TALK TO AN ENGINEER and get approval?" he responded, "trust me, it's not going to be a problem." What Jaehne meant by that was that he had unilaterally decided to move our two HVAC units to the attic (the worst possible location for AC units given Texas's hot summers) and build chases through our upstairs closets to run ductwork down to the first floor. His unilateral decision resulted in a veritable giant spiderweb of HVAC duct lines plus two huge HVAC units crowding our attic so, instead of the expansive storage area we expected, one can barely move around up there. Plus we lost a huge amount of closet space to chases. And, worst of all, we had to pay for larger HVAC units that must work harder to push air thru hundreds of feet of minimally insulated ductwork so, instead of an e