Opinions and Findings

Contractor

I find Jay Adelyn, a B1 General contractor, in good standing with the

State Contractors Board. He has no failures or judgments. He has 32
years experience and states he has successfully built over 50 homes

Contract

The Construction Contract is brief and appears to be assembled from

Articles drawn from older AIA Contracts. It lacks General Conditions but
covers the primary areas necessary for a Construction Contract. It was
accept by Umpqua Bank and signed by the owners

Mr. Abelyn included an article (noted as #6 in the contract) that is

outdated in it use for Fixed Fee contracts. The intention of this Article is
to certify the project is lien free by showing past invoices are paid. It
is not intended to proof the cost or value of the previous draw, as the
Progress Payment process agrees to be based on a Percentage of
Completion not paid invoice sums. With the delay in receivables and
payables and the variant in actual costs (over or under) the process as
required would never balance. Hence this Article is typically replaced
with an Article stating that All invoices shall be accompanied with a
Conditional Waiver and Release on Progress Payment Invoices, and a
Unconditional Waiver and Release on All Previous Payments This
satisfies the intent of the article by providing a lien free Project.
Unfortunately the misunderstanding of this article has contributed to
this dispute.

Plans
The plans are a basic construction builder set with completed
engineering and have passed Nevada County Inspection for permit.
They do not include a specification manual and are silent on many
details and specifications leaving much to the owner/contractor to
decide. The plans also include conflicting details some that have been
clarified by the engineer of record and other that need owner decisions

Construction Cost

The contract cost for construction (adjusted by removing the

Architectural and Permit Fees) is good for the dwelling type and
location. The contractor fee of 10% is below the industry standard of
15%. The contract budget does not include a Supervision Fee (which I
assume the contractor is providing himself without charge) at
additional saving to the owner.

Project Appearance/Status

The Meyer residence, is at its rough stage of completion and appears

well built, with a neat and organized appearance. Investigation has
shown there to be Corrective Work to complete previous to final. The
project has been stopped by the owners for 10 months

Schedule

By reading the permit date, the draw requests, and the county
inspection reports, the project appears to have been well manned, and
well scheduled, resulting in excellent construction progress particularly
for the remote site and log wall home structure

Construction
As stated above the project has the general appearance of a well-built
home. The log walls look well assembled and the paint, both on the logs
and the tightly constructed soffit looks excellent. The white windows
and metal roof give the home a clean and pleasing presentation.. The
foundation is well constructed and is fit well into the topography
maximizing access and presentation. The interior is demonstrates a
clean frame and is well done. The interior mechanical looks in good
order. The insulation has been removed by previous inspection. The
underpinning has proper clearance; there is numerous piece of
insulation down due to precious inspection and the rerouting of
plumbing and floor frame due to owner changes. The HVAC is laying on
the ground and needs to be correctly secured after the re-install of
insulation. The site grading and utilities look good. The East end of the
building will need finish grading for positive drainage

The Residence appears to have modifications and changes, including,

but not limited to -

1. Bathroom modifications with the addition of urinals, a change in

shower enclosures, necessitating changes framing, plumbing, hot
tar water proofing, stone or tile wall finishes.
2. Numerous electrical changes
3. Change in hearth design to flat to elevated (

There are corrective items to remediate previous to final. They are not
major and should not delay the project

Draw requests and Disbursements

Analyzing the previous draws t requests I found them within the

boundaries of a Fixed Fee, Progressive Payment process. Lending
institutions have utilized numerous payment processes. Aside from the
Cost Plus fee contract (where payment is solely based on paid invoices),
and the Percentage of Completion, progress payment system, is the
surest and most relatively accurate method of disbursement used with
Fixed Fee Contracts. I have constructed a Percentage of Completion
based on my inspection and included it and full explanation in this
report

Summary

The construction of a home is possibly the largest single investment

most people make in their lives. It includes many design decisions
which owners are required to make with little or no previous
experience. These two items make a challenging experience for owners
and they look strongly to their builder to help guide them through the
process.

It then becomes the builder responsibility to build the home well, keep
it on budget, stay on schedule, and meet the owners expectations,
which are often unstated or unrecognized by the owner.

At this level of residential construction, with a Builder Set , it requires

a great deal of communication and trust.

Jay Abelyn is an Old School builderstrong on production, weak on

paper work. Jay was producing a good home for the Meyers at a good
cost in a timely manner; he worked as a team member for nearly a year
helping them obtain financing. I understand early emails show a good
communication process. In the construction of the project he had been
making many requested changes without change orders hoping for
either his sub-contractor or himself to absorb the cost, or to find it in
the budget. And when he was asked for the past invoices (a clause he
was not fully aware of in his own contract) he was surprised as (it was a
fixed fee after all), and he was insulted. When he did not respond
positively to the owners request the owner felt something was amiss,
that they were being stonewalled, and the thread of trust was frayed.
Unfortunately the invoices would have shown the job was in order and
when they received the invoices they also had receive damning reports
(mostly inaccurate) that broke it completely.

To exacerbate the problem the owner felt un-listened to. The Eiermann
report states that the Abelyn ran the power line through their garden
without, and the water line was run not according to the owners. As an
inspector of the water line I see a wll run line with an incorrect request
to change all of the 1 hose bid risers to 2 inch performed by Jay at
great cost and time as a strong show of listening and cooperation, and a
power line run tight to the septic area , in a direct path to the meter as
cost effective, with little disturbance to the large area for the garden.
These differing reports from contractor and owner along with my visual
inspection show the communication was frayed as well.

I have stated the % of completion and the balance due Abelyn per the
Bank and Contract agreement. The amount will then be adjusted by the
cost to remediate work and the cost of owner change requests to reach
a final balance due