Episode 70 - Dealing with Crazed Homeowners: How to Navigate Red Flags in Building with Lawyer Steve Yoch

Episode #70 | Steve Yoch | Dealing with Crazed Homeowners

In this episode of "The Curious Builder," host Mark Williams and guest Steve Yoch from Falbar Larsen Law Firm get real about handling tough clients in the construction biz. They share some wild stories and key advice on keeping cool and professional, even when things get heated. The conversation covers everything from the impacts of social media on client interactions to the importance of solid contracts and clear communication. For any builder looking to level up, this episode is jam-packed with wisdom and practical advice!

Listen to the full episode:

About Steve Yoch

Steve Yoch is a real estate and construction lawyer (aka a “dirt lawyer”) at Felhaber Larson in Minneapolis. He enjoys helping clients avoid and solve problems. His extensive experience allows him to assist clients in evaluating all the alternatives when facing legal challenges. Most importantly, Steve values the long-term relationships he develops with his clients.

He has written and taught widely on legal topics. He is co-editor of the two volume,Minnesota Real Estate Deskbook.

Steve is also the award winning author of Becoming George Washington and Becoming Benedict Arnold. He is volunteer counsel for the Housing First Foundation providing assistance to MACV and other groups addressing homelessness. He has also volunteered for SMRLS for over 30 years providing pro bono legal assistance to the poor.Resources

• Visit Felhaber Larson’s Website

• Transcript

  Mark Williams:

  This episode is brought to you by Cbusa. For nearly two decades, CBUSA has been helping independent home builders better their businesses. And it all began with a group of industry leaders just like you looking to do just that. As the nation's largest group purchasing organization in the residential construction industry, they're able to bring home builders together to compete, frankly, on a national scale. By getting builders to group together, you're creating a buyer group that is now going to help you negotiate better deals and better rebates, even nationally. If you're a local builder here in Minnesota, you're in luck, because CBSA is proud to announce that in Q one of 24 they're coming to Minneapolis. So if you'd like to know more about this journey and be part of the builders here that are going to have advantages being the first ones in, please reach out to Ryan Lipchek from CBosa. You can also listen to his story on episode 26 of the Curious Builder.

  Mark Williams [00:00:47]:

  If you're here local in Minnesota and want to network with other builders, we have the curious builder collective. You can head to our website to find out what that is all about. We have three more three hour sessions coming up this year. We're basically a small group that has a room for ten more builders. We currently have 20. We're going to cap it at 30. This is a way to test your theories, learn from each other, and elevate your brand and your business. Head to thecuriousbuilderpodcast.com to find out more about the curious builder collective.

  Mark Williams [00:01:12]:

  Today on the Curious Builder podcast, we have Steve Yock. He'd come on previously on episode eleven as the dirt Lawyer. And what a great episode this one turned out to be. This one was called the Crazed Homeowner. And really, we focused entirely on the episode about what to do when you're in conflict with a very troubled or difficult client. So if you're in for some good laughs, maybe some that are too close to home, you're gonna wanna listen to this all the way through. Without further ado, here is Stephen Yock. Welcome to Curious Builder podcast.

  Mark Williams [00:01:46]:

  I'm Mark Williams, your host. Today I'm joined with Stephen Yock from Falbar Larsen. Welcome, Steve. Studio fel Haber fell Haber fell Haber.

  Steve Yoch [00:01:54]:

  Like the deutsche nine speaking to doing.

  Mark Williams [00:01:59]:

  We'll probably keep that. That's way better. Welcome to the Curious Builder podcast. I'm Mark Williams. I'm joined with Stephen Yock from Falhabr. Hi, welcome to Curious builder. I'm Mark Williams, your host. Today I'm joined with Stephen Yoch from Philhar Larson.

  Mark Williams [00:02:14]:

  Yes, a local law firm. If you recognize this deranged individual who's my good friend and lawyer, episode eleven, the Dirt Lawyer, which I believe is number three all time on the Curious Builder podcast.

  Steve Yoch [00:02:25]:

  In terms of downloads, nothing wrong with bronze.

  Mark Williams [00:02:27]:

  Yup. Let's go, man. It was pretty awesome. So, you know, we'll skip some of the intro if you're interested who Steven is. And a lot of we covered amazing topics in our, in that episode. I wanted to bring Steve back on because the first time I ever met you, you were doing a class for housing first Minnesota, and it was called the crazed homeowner. And lately with my peer groups, the builder twenties, just talking to other builders, everybody has one or two crazy homeowner stories, and obviously you being my personal lawyer, you know, all of mine, but I thought it'd just be really helpful and cathartic for the builders at large to hear some of other stories, talk about how you navigate and deal with this. So it's a big topic and maybe start with just a good old story because everyone kind of gets hooked with a good story.

  Mark Williams [00:03:12]:

  So what are one of your favorite stories over the years that you've sort of encountered with some of these crazy homeowner situations?

  Steve Yoch [00:03:18]:

  Well, first of all, thanks for having me on again. It's great being with you. First of all, you're not, like you said, you're not alone. Everybody, I think increasingly, and everybody always thinks the old days were better, but I think the frequency is increasing. And one of my early favorites was this homeowner. This is pre emails, but it's the same thing. But they actually took the time to write it and type it and send it to my client. This is almost 30 years ago now.

  Steve Yoch [00:03:48]:

  It started out like, you know, regular spacing, single space, you know, and then about halfway through, it turned to all caps, and then after that, it turned to all caps, bold, and then it was all caps, bold with exclamation points. And by the last three or four pages, it was all caps, all bold, all exclamation marks the whole way. And I actually still have that letter. It's, it's such a wonderful keeper. So crazy homeowners are not new. They just have a lot of new ways to make your life challenging. And I think the percentage of them of our customer population has increased.

  Mark Williams [00:04:26]:

  So, I mean, actually, we'll begin with the end in mind. What do you think we'll get into what today is and how you've dealt with people in the past. But what do you think the future is? I mean, you have, you know, let's say five to ten years left of your career, God willing, maybe more. Who knows? But let's just say the next 20 years, 30 years, at the rate that people are being so litigious. I mean, is it just my naivety, or do I think it's getting worse and worse?

  Steve Yoch [00:04:53]:

  I think social media has made it worse. I think the ability to interact with your clients remotely has made it worse. I think text and email have made it worse. So you're not having that same level of personal interaction. You'd go to the site, maybe you'd talk on the phone, but you'd miss each other a lot. Now you can get ahold of people anywhere, anytime. And also, I think that there's a general decrease in civility, which I think is caused by the anonymity of social media. And so people can post mean things about you or threaten to post mean things about you.

  Steve Yoch [00:05:26]:

  And people have become more comfortable with that rudeness that I think probably didn't exist at the time your dad was building houses.

  Mark Williams [00:05:33]:

  I think that's extremely well said until you articulate it. I'm just nodding my head. Cause I'm like, I think you hit on all the high notes because you're right sometimes when you get a really difficult situation, when you do meet on site and you're a human being, I'm a human being, and you realize that everyone is upset, at the end of the day, you're still. It's hard. Most people, especially in Minnesota, where we have a lot of passive aggressive people, collected around our 10,000 likes, you are pretty unlikely to just go full off on somebody. People are pretty reserved. And so it does, I think, usually deescalate the situation when you're in person. I think people become more reasonable until they're not.

  Mark Williams [00:06:12]:

  But, um, I found, you know, I've mentioned this many times on the podcast.

  Steve Yoch [00:06:16]:

  It's.

  Mark Williams [00:06:16]:

  It's a verse out of proverbs that I use a lot, and it's a soft answer, turneth away wrath. And I often think about going into a difficult situation, and regardless if I'm right or wrong, you've taught me this a little bit, too, of just acknowledge the feelings. And I'm sorry about where we are right now. I. You know, which is true, right? Whether I agree with him or not, that's not the point. Like, nobody wants to be in that really contentious, difficult situation. And so just acknowledging it like this is uncomfortable. Like, you know, it's affecting my personal life, my mental health.

  Mark Williams [00:06:47]:

  I, you know, I hear my clients all the time talk about, you know, their mental health and how, you know, in certain situations where it affects them and it affects both parties because both people usually are conscientious and usually these things, kind of, at least in my experience, have sort of tailed apart at the end. And so you've built a couple of years of relationship with these people. So it's not like you just met someone out of the blue. It seems to be like a slow boil until the pot just sort of blows the lid off.

  Steve Yoch [00:07:14]:

  Yeah. I think the personal thing is really important, and there's some maybe builders and people who are not good at it. But if you're a successful builder, you have good interpersonal skills, you have a high social intelligence quotient and the ability to go and sit down with them. And by the way, I do think this is important. A lot of lawyers might not agree with me, but I think it's important. If you've screwed up in some way, things haven't gone right, even what you just said. I'm sorry you're unhappy about what's going on right now. That's not necessarily saying I screwed up, but people want to hear, I'm sorry.

  Steve Yoch [00:07:46]:

  This has not been ideal, and especially if you've actually screwed up. Own it. There's been something, and we're going to address it. I think that helps deescalate. Right. And. But there is a downside to meeting in person. What you and I have talked about, which is it is legal in Minnesota to record the conversation.

  Steve Yoch [00:08:09]:

  So they can be sitting there with their iPhone, as we all have. It could be face down on the table. It seems innocuous, like yours is right now, and they could be recording everything you say.

  Mark Williams [00:08:18]:

  This one's pretty obviously recording because you have a microphone in your. What?

  Steve Yoch [00:08:22]:

  Oh, my gosh. But, but that takes me to the other half of meeting in person and also interacting with these homeowners generally, which is you as a builder are held to a higher standard. Right. This relates to their hearth and home, and there's a certain tolerance in the legal system for their irrationality. We expect you to be excessively emotional about your house and home, but you are going to be held to that professional standard. So if they start screaming and swearing at you, you can't start screaming and swearing back because that'll inevitably end up in either front of a jury or the Department of Labor and Industry, and they'll have it all on tape.

  Mark Williams [00:08:59]:

  Right. I think if you think about it. I think most industries are like that. I mean, if you go in to see a dentist and something goes wrong there, I would assume maybe I'm wrong, that they would err more on the side of the patient over the dentist. I think doctors, I mean, my wife is a physician, and they have insurance and malpractice insurance. And, like, you're not always right. I mean, they know less about the human body than we likely know about a house. But even so, it's like.

  Mark Williams [00:09:20]:

  It's like, sorry, honey, you know, so, you know, so ultimately, I feel like. Would you agree that most times a professional obviously is held to a higher standard than the person buying or being serviced by the individual?

  Steve Yoch [00:09:33]:

  Yes. But I would also say that in Minnesota, we have a special place in our heart for builders. The Department of Labor Industry is very focused on builders, more than I, than a lot of departments in other states. We also have a higher statutory requirements on builders than, say, I'm also licensed in Wisconsin, and there they do not have section 327 a, which is the 1210 warranty that your listeners are familiar with. So we are, as I say, we, because I'm so connected with builders, I'm not a homeowner guy. We are held to a higher standard of behavior and performance. Doctors are, lawyers are, other professionals are. But that's the one thing builders need to understand.

  Steve Yoch [00:10:11]:

  In Minnesota, you're a professional, just like a lawyer, just like a doctor, just like a dentist. You are a licensed professional that the state is going to hold accountable. And you got to remember that all the time.

  Mark Williams [00:10:21]:

  I think what's interesting, I mean, think of, you know, how many years do you go to law school?

  Steve Yoch [00:10:24]:

  Three.

  Mark Williams [00:10:25]:

  Okay. A doctor goes, let's say, eight years. A dentist goes, I don't know, four years. Most builders get their license in a couple weeks. Now, they learn it through the school of hard knocks a variety of ways. But I feel like there's an education component in being armed for some of the stuff that usually life teaches you. I mean, most of the things I've learned in 20 years, you know, I have paid. I have paid for this podcast a million times over with just life experiences.

  Mark Williams [00:10:50]:

  And I'm by no mean an expert, but I've told you this before because you're on the other side of my phone calls. But I have learned more about the legal system and the insurance system over the last five years than the previous 40 years of my life.

  Steve Yoch [00:11:04]:

  Yeah, I mean, and that, by the way, you're not alone, right? I mean, everybody, it's a little bit of a ticking time bomb, you say, well, I've been doing this 15 years and I haven't had a problem. Well, it's going to catch up with you, right, because eventually you're going to run into our topic today, the crazed homeowner for even if you're doing good work or if a little something goes wrong and they overreact, right, they are going to make your life hell. I don't know what, that's the legal term.

  Mark Williams [00:11:32]:

  Well, and before we get into it, you know, I've mentioned this recently, it's been a common theme about having five or six close confidence on your, let's call it your business team. And, you know, a couple weeks ago, we had our banker and I argued that, you know, you should be reaching out to your banker probably once a quarter, have regular meetings, you know, just call them when you need money. I think lawyers are on your inner team. You know, you and I happen to talk a lot because we share personal interests outside of even business interest. But we have a lot to talk about in general. You know, a coach, financial planner, an insurance agent. As you brought up in a peer group, these people are part of your team. And I feel like it's a detriment to any business owner if you only call them when you need them.

  Mark Williams [00:12:07]:

  And how would you, you know, obviously, how do you combat, not the, what's the right word? Combating? Just the thought that every time. I think, some people think, every time I call a lawyer, you get paid by the hour. And so people are resistant to call when they need. It's like unless I'm bleeding, you know, gushing out of my artery, I'm not calling someone. I can fix it myself. How do, how does the lawyer profession sort of maybe combat that? Because everyone would be far better off with some ounces of prevention here.

  Steve Yoch [00:12:38]:

  Well, I think there's two things. I think it's like preventive maintenance. It's like you can go to your dentist when your gums are bleeding and your teeth are falling out, or you can go for the regular cleaning and everything else. It's not really that different in the law business. I mean, we, with, with the good, smart clients, you know, I need to, haven't looked at my contract for a while, or I've got this difficult thing, or I've got this weird contract, or I just got sent. An example that I think I talked to about one time is I got a builder client who had received a completely marked up version of their construction contract from this potential customer. She was blind. Her father was on the Minnesota supreme court, and he had changed, like, every single word.

  Steve Yoch [00:13:21]:

  And I said to my client, and he's the guy who called me regularly, I'm like, don't take the case. Don't take the project. Right? Because he's gonna spend the entire project looking over his shoulder to protect his daughter. And, oh, by the way, if you get in a fight with him, this is a person in the top of the legal system. I'm not implying the legal system would have been unfair to him, but he would have been comfortable fighting in it. And sometimes the best customers are the ones you walk away from. And those decisions and that kind of counseling. By the way, we were curious, and there was later litigation with the next builder.

  Steve Yoch [00:13:54]:

  That sort of experience is the discussions that you should have that are productive, that are the preventive maintenance part of it. But just to the. But some people don't want to incur the expense. I understand that lawyers are expensive. It's expensive to go to the dentist. And by the way, probably a good analogy between having to go to the dentist and having to go to a lawyer.

  Mark Williams [00:14:15]:

  Well, I just heard something in the, regarding around your fitness, someone had mentioned it's expensive to be healthy. And I think they're talking about saunas and cold therapy and a gym membership. And someone that I was running with said, you think that's expensive? What is the cost of being sick? And it was a really impactful statement. And I think all these things are true. And, you know, call your lawyer before you need them. Because when you call them and you need them, it's likely too late.

  Steve Yoch [00:14:41]:

  Right?

  Mark Williams [00:14:42]:

  In terms of, like, your contract, let's.

  Steve Yoch [00:14:43]:

  Say, your shield, it's also important to have one. You know, I mean, you should have someone who, when you're in the stink, you're not suddenly going, golly, I gotta find a lawyer, a new one. Right? I don't. I don't have a lawyer. Right. You should have someone just like a banker, just like an insurance person, an accountant, someone with whom you have an ongoing relationship so that, you know, when the going gets tough, you have a relationship to someone who's going to be there for you, because you might, by the way, you might go to that new lawyer and you don't like them.

  Mark Williams [00:15:10]:

  Well, it turns out that not every lawyer is as good as Steve Yock. And no, seriously, this is a funny story because it's like I was thinking, like, I have been pretty lucky. I've had two lawyers in my career. You know, you're Tim Hassett and you. That's it. I'm, and so I basically have like two game seven starting pitchers. Like, it's not everyone. Frank Viola in game seven of the World Series, 87 and 91.

  Mark Williams [00:15:29]:

  Shout out to the twins. And my point is I ran into a lawyer recently and I'm not kidding you, the bar is so low. Pun perfectly intended for this person. And I'm like, they don't call me back for weeks. They don't return emails. And I'm like, the lawyer gets paid by the phone call. I can't get a hold of them. I've called them like I've told you about this person.

  Mark Williams [00:15:49]:

  And it's like, the point is like, you have done such a good job of setting the bar so high that I just thought your entire industry was that high. Turns out it's not.

  Steve Yoch [00:15:56]:

  I like to talk to people. So if I get a call and it is a great. And if they don't return your call within, if you don't hear from either them or their assistant within 24 hours, there's something wrong. Right. You should be. And now, by the way, if they have bounce back that says I'm in Bolivia on vacation, but they should have bounce back that says I'm in Bolivia. Do you know me? I went to England for some soccer this spring and you know, I'd about that professional. Yeah.

  Mark Williams [00:16:20]:

  So let's talk a little bit. You alluded to it just briefly about, you know, the little voice, and I call them red flags and identifying your ideal clients, but also red flags to avoid for builders out there. Tell us a little bit about maybe some stories you've heard or what are some things that you would attribute. Because, because you're reviewing contracts on the front end, what are some red flags that builders and remodelers or really any business owner should be aware of? Orlando, you know, be looking for that. Like, you know what? That that's likely going to lead to a future issue. Or if not, you at least address it and flush it out because maybe it's a misunderstanding.

  Steve Yoch [00:16:55]:

  Yeah. I mean, first of all, it's the, you call it your red flag. I call it my little voice. When you're talking to someone and they're hostile or combative at the early, which should be the honeymoon stage, that, that's a red flag. Right. Or the husband seems really nice or the wife's a psycho or vice versa. Those various indications, it isn't. Someone marks up the contract, but it is.

  Steve Yoch [00:17:23]:

  If someone marks up every single line of the contract, it's all those things that go, hmm. Now, that doesn't mean. It was a very rare situation where I said to my wonderful client, don't take the deal. It's a bad deal, unfortunately. Listen to me. But sometimes it's like, then you need to go eyes wide open, and then you need to be really documenting the relationship. And those listening to your little voice, I think, saves you a lot of trouble. And again, sometimes the best customer you have is the one you didn't take.

  Mark Williams [00:17:54]:

  We had a situation that I actually, he was a lawyer, and he had been. Two other builders had gone into his crosshairs, and he ended up being one of my best clients. And I think it was really interesting person. But, I mean, he described himself as a grizzly bear, but I was under no illusions of who he was, and. But I treated him straight. I was honest. The two issues. The reason he fired his two previous builders is they were dishonest.

  Mark Williams [00:18:21]:

  Well, there's nothing wrong with that. They were dishonest. And. But this guy had a. I mean, you know, he even said the quote. He said, when you're hammer, everything looks like a nail. And I knew, man, if I ever ran a follow this guy, like, it was over for me. It was.

  Mark Williams [00:18:34]:

  It was tko time. And we had one small issue that he was wrong on. And I told my guys, I don't care. We're taking care of it. It's for a couple. I'm not even going there.

  Steve Yoch [00:18:43]:

  Like, right?

  Mark Williams [00:18:44]:

  This is a guy that. I mean, you know, I remember one time, I'll take this to the supreme court, and he was fired up over it, right? But I'm like, doesn't matter, because when you're a hammer, everything's a nail. I'm like, nope, we don't want to be a nail. But he ended up being a whole. One of my favorite clients, this great personality. So to your point. But I was made aware of that early on. And anyway, I guess got lucky that someone else was able to tip me.

  Steve Yoch [00:19:08]:

  Off to be aware of it and to be careful. Right. And then you document everything. You send a follow up email as opposed to text. We can talk about both of us not liking text. You send a follow up email, you make sure your subs are aware of what's going on. You have good agreements with your subs that are clear. All those sort of issues you got to do to which you should be doing in every project.

  Steve Yoch [00:19:29]:

  But if your little voice says, you know, this is a 110% kind of project, then you really got to do that.

  Mark Williams [00:19:35]:

  Well, I think I have been kind of fascinated with this quote lately, which is boundaries create freedom. And I think that's for me personally, and I've talked a lot about it on the podcast about setting boundaries so you can have a life and things like that, but ultimately it helps you win jobs. But I actually have in my contract you wrote it. I have no texting for. It started, I mean, because I was reacting to a situation a number of years ago where they would text my project managers, not even me, at night, weekends, and they just couldn't stop. And we are in the client service business, you know, hospitality. We ultimately are hospitality. We're no different than a restaurant, but we do far less research into like, the hospitality of it.

  Mark Williams [00:20:15]:

  Right. Because it takes, I mean, when do you go eat at a restaurant for two years? You know, this is a much longer process. It's not one night. You know, most people could be fine for one night and suck it up if they had a bad person you were serving. But for a home, it's a little bit different. And so I think early on establishing boundaries with your clients, I think going back to your meeting in person, one thing that has done me a great service over the last couple of years is most of our jobs. We keep a bi weekly meeting with the homeowner, let's say Tuesdays at nine to eleven, and then we just ask them, please table your questions, accumulate them, and they can email them, obviously, if they have questions that are more urgent or whatever, but I find that then when you get there, you have an agenda. It's very professional, it creates a nice rhythm.

  Mark Williams [00:20:59]:

  You avoid a lot of this email, you still get emails, but the texting.

  Steve Yoch [00:21:04]:

  Emails are okay in the sense of that's a pretty good way of communicating. It's pretty easy to keep track of it. Texts are been a huge problem. And to me this is the you are a professional issue. It's a Friday afternoon, you've had a long week. You're a builder, you're hanging out with your friends, or you're at a bar, it's 06:00 maybe you've had a cocktail or two and your phone goes ding. Why? Because they've also gotten off work. What did they do? They went over to the site and maybe they've had a cocktail and they write the nastiest text you can imagine.

  Steve Yoch [00:21:38]:

  And what's your instinct? Your natural instinct is fight or flight. You're going to go, oh yeah, well, and then maybe you've had a drink too, and even show it to your friends. Look at what I just said and you hit ding. That is the worst possible thing you can do. It's bad, obviously, because it's not carefully considered. Right? Again, this whole, we're held to a higher standard. One, two is you need to choose your words carefully because the one thing you can be sure of is that text will be exhibit one when they go to the Department of Labor, industry or otherwise. And you've got to be held to that higher standard.

  Steve Yoch [00:22:12]:

  And the last advantage of waiting until the next day is it drives them crazy. Right? I mean, if you write them back with a very courteous, to your point, a very courteous, professional, non inflammatory email. Dear Miss Jones, as I indicated, our preferred method of communication is email, which is why I'm emailing you. I got your text. Obviously it had a number of things that were inaccurate. Let me clear those up. Obviously, it's a pleasure working with you and if I can be of assistance, let me know. And that goes in their head.

  Steve Yoch [00:22:48]:

  So I always sort of write that either the department of labor industry is going to be looking over your shoulder or your mom. That is the best way to deal with crazed homeowners. If you start lowering yourself to their level, you get in a lot of trouble on many levels. And it's really, really hard for a human being not to respond to those horrible, insulting texts you get. But yet we must.

  Mark Williams [00:23:16]:

  Right. I think it's interesting you had mentioned, or I had brought this up, how do you, or what advice would you have to builders that have built a good reputation? By and large, our industry is filled with people that work really hard. They're very conscientious. I mean, you don't get into building a if you're not usually one of those two things to begin with. And I would say that clients try to weaponize your own reputation against you. I know I've had that in my career where people will say, and it might be a loosely veiled threat. So I'd like to talk a little bit about what you do to avoid that. And then secondly, like, let's talk about the boogeyman in the room.

  Mark Williams [00:23:56]:

  Like, what can they actually do? And let's. We'll talk about that maybe secondarily.

  Steve Yoch [00:24:00]:

  Yeah. The two things is, first of all, the way to avoid the problem most of all is not to allow it to fester or get too far, that the get in, meeting with them in person and de escalating is what you want to do first. Right. It's one thing for them to write you a nasty text, but really, the threat they have is social media. Right? I'm going to go give you a zero star. I'm going to rip you on social media, or I'm going to tell all my friends. Because sometimes for some builders, the circle in which they're working is a relatively small geographical area with a relatively narrow socioeconomic group. First of all, you need to be doing everything right and polite and everything else.

  Steve Yoch [00:24:39]:

  One, two is if they're going to engage, and I have dealt with this, where they actually make fraudulent statements that are defamatory. It's by its almost definition defamatory because it's a false statement about your work. It's going to be defamation. There are increasing protections that you can bring a legal action against someone for making false statements on social media that relate to your business. But of course, then you've already lost. Then you're already, first of all, you're paying a lawyer, but second of all, you've already crossed that Rubicon. So, okay, so, Steve, on the one hand, you're gonna be a professional and you're gonna be a really good person, and you're gonna try to deescalate. And on the other hand, if they are out of control, you can have lawyers write nasty letters and sue them.

  Steve Yoch [00:25:20]:

  But in the middle, it's a tough dance and there's no straight answer, which is gentle firmness. When they threaten you, listen, I have not done anything wrong. Don't be making false statements, because if you do, they're actionable. I just want you to know that. But I want to work with you towards resolution. And by the way, it's a little bit of that social intelligence quotient that you and other good builders have where you go and try to work it out with them. But sometimes people are just crazy and they're going to do it. And I have had situations where we've had to write nasty letters and make them take stuff down and, or seek an injunction.

  Steve Yoch [00:25:56]:

  Them take it down.

  Mark Williams [00:25:57]:

  What is the. And that's helpful information. I mean, having been stuck in the spin cycle, I've been in the middle. And so it's like, that is a difficult place to be. It wears. Wears on you. One thing that I, you know, if you're a builder listening or remodel listening, and, you know, you hear about, you know, being sued or you, or in. I guess it's funny to be, to be sued.

  Mark Williams [00:26:15]:

  It seems like it goes all the way to case. I've never actually had that. I've had a couple settlements, right. And so, but it's like that. It's time. No one tells you how much time this takes unless you've been through it and, you know, in some cases a year or two years. And then the second is it kind of lingers in the back. It'd be like, you know, if you sprained your ankle and you keep playing basketball, but it always is kind of, you know, it affects your game.

  Mark Williams [00:26:36]:

  Even though you can kind of play the game, it affects you. I would say that, like, you know, there are times, and I'm a, one of the reasons why I exercise so much is it allows me to get off a lot of that energy, and it makes you feel good. But I, there'll be times where I'll wake up and I know it's become a problem if I ever dream about it or if I, if I wake up and I have, like, this latent stress that I didn't even realize I was caring. And something will happen, I'll either get resolved or whatever. And it's like your body physically reacts and I don't know. And I've only had two situations like this in my career. I can't imagine having these repeatedly over and over and over again of how to deal with it. So that's one thing that nobody really tells you.

  Mark Williams [00:27:14]:

  Like, what does that cost? Like, how do you quantify that?

  Steve Yoch [00:27:17]:

  Yeah, I mean, there's the these, by the way, I think the analogy that I've heard people use, it's like the equivalent of having a very sick child or marital trouble. It's always there, and you have to try to push it aside and go on with your business. You know, there is not everything you've already said is the best things you can do is exercise and try to get some balance in your life. There's different types of claims, right? There's the, where they're just yelling at you and we're going to try to resolve it, which means no lawsuit. But it's still very stressful because you've got the crazed homeowner who's really mean. You can get the claim from the Department of Labor Industry, and it has in and of tennis and warning. And I would just say to all the builders, if you get anything from the Department of Labor industry, you must respond immediately and you must talk to your lawyer. A lot of folks think, well, if I just pick up the phone and I talk to the investigator, everything will be fine.

  Steve Yoch [00:28:10]:

  What builders don't know is a conversation with the investigator is even though you're not sworn under oath, it's presumed to have to be truthful and their notes are presumed accurate. So if they write down you said x, and then later on you said, I said, why it was x. And you can get in a lot of trouble both being untimely or speaking to them. Generally, you want to respond in writing. And then otherwise, if you get sued like a lawsuit, again, you've got 21 days to respond. And I know guys who get irritated. They throw it in the back of their truck and then they call me two days before the answer is due. There's two things you need to be doing then.

  Steve Yoch [00:28:44]:

  You may have claims, a counterclaim against the homeowner. You may have claims against subs that you need to sue also as well. And you may need to notify your insurer. And so again, procrastination is never good when there's a claim. And by the way, that procrastination just causes you stress. Because back to this thing that you were talking about, it's not like it goes away. The best way to deal with the problem is to deal with the problem. And so if and when you have any one of those kind of claims, grab the bull by the horn.

  Steve Yoch [00:29:12]:

  And in a couple of cases, if you don't, by the way, if you get defaulted because you didn't respond on time with the department of the industry and or in a lawsuit, then you're going to spend thousands of dollars and many hours more trying to explain why you ignored it. And sometimes the Department of Labor industry is not sympathetic to allowing. You're just going to be found guilty, essentially.

  Mark Williams [00:29:31]:

  What, you know, for the advice for people out there in terms of, you know, a good contract is a shield, right? It's going to protect you. I mean, the first thing, anytime anyone ever calls a lawyer is send me your contract because it's pretty hard for you. Usually in this case, you're, let's say, a year, two years into a build or the build is done. You know, you have years of experience having dealt with whatever the situation is, and your lawyers got to catch up. They need the cliff notes and they need to hurry. And the first thing they ask for is the contract. Why? So let's talk a little bit about how your contract is a shield and how it protects you.

  Steve Yoch [00:30:07]:

  Yeah, I mean, first of all, it's required by law, so you have to have one. And in Minnesota, there's a whole bunch of attachments you should have. And the number of times I get builder contracts that don't have a copy of 327 a and the building standards and the other stuff that's required. Required means your contractors are ready, not in conformance, but successful builders like you have actually taken sort of the standard form contracts that folks like. I have developed and customized it, right. And actually added a lot of really good changes because now people go, well, gosh, they're so long, right. I mean, I give this contract to the homeowner and it's like 50 pages long because it's got the contract and then it's got all these attachments. And one of the things I think it's important for builders to say to the homeowner is first of all, a lot of this is driven by statute.

  Steve Yoch [00:30:55]:

  Most of the appendix are driven by statute. We have to give this to you. But second is this is probably going to be the one of biggest purchases you made, more expensive than a car. And this is designed to lay out the relationship between the two of us and avoid disagreements later on. And I'm happy to go through every paragraph with you and explain why it's there and what it deals with. And most of the time when you say that, they go, oh, yeah, I understand. They, by the way, almost never ask you to go through the whole thing because it's too painful. But sometimes they do have questions.

  Steve Yoch [00:31:26]:

  And that shield later on is the very first thing. And by the way, I asked for two things. I always ask for the contract and any change orders. Right. Because a change order is just an amendment to the contract. And the number of times they go, well, I don't have all the change orders. Well, that's required by, I feel like.

  Mark Williams [00:31:43]:

  In today's world with, you know, systems like, you know, builder trend or whatever online software you're using, it's never been easier for builders to track change orders. I can see why 2030 years ago, you know, even before Excel, you know, when you were doing everything by a paper copy, oh, man, I can see you hear the horror stories where people, you know, clients would show up at a closing and the builder would finally get all their accounting done, lay a huge stack. I mean, I'd be, I'd be outraged too, if I was the homeowner. And it's just a bad system. I feel like I, you know, some of the negatives of social media we've talked about, but some of the pros is we have tools to track a lot of this so that this should not be an issue. And if you don't think that you're in a digital world anymore and you're a builder and you just have a hammer, you need to wake up and smell the coffee because, and it doesn't have to be difficult, doesn't have to be super elaborate. It can, it will help you. It will actually take down your stress level.

  Mark Williams [00:32:34]:

  This episode is brought to you by adaptive, the software for builders that automates draws budgets and bookkeeping with AI. For over a year now, I've been partnered with adaptive and they've just been an amazing game changer in terms of efficiency in our time and all our bookkeeping. From the time we get an invoice, we import it into their system. The AI codes it, cost, codes it, job codes it. All we have to do is review it, pass it through the people internally in the office, all digitally, and then it gets approved and paid all by Ach. It's becoming extremely fast and saving us countless hours a day and a week. When it comes to draws, all of our budgets now are set in adaptive as well. So now when we cost code against the draws, we can do our change orders.

  Mark Williams [00:33:17]:

  And then with a click of a button, we can submit these draws to our title companies or to our homeowners for faster payment. If you're looking to save time, and if you're looking to be accurate, I highly recommend adaptive. Additionally, if you'd like to listen to one of their founders share the story of Adaptive, you can listen to episode number 15 on the Curious Builder podcast.

  Mark Williams [00:33:33]:

  This episode is brought to you by Pella Northland for 19 and a half years I've been building homes, and 95% of all my homes have used Pella windows. I couldn't be happier to call them a partner in our builds and our remodels. Whether you're an architect, a designer, or a remodeler, I'd highly recommend Pella windows. They can fit old homes, new homes, reclaimed, commercial, and really everything in between. Pella is a company that we trust and that we recommend to our clients. Additionally, in management, Peter and Ed have just been absolutely fantastic people to work with as well as mentors to me personally. So when it comes time to look for a window, I'd highly recommend Pella windows. Find more@pelanorthland.com also, if you're interested, you can hear episode one where I interview Peter and Ed together for a great lesson on business and Pella windows.

  Steve Yoch [00:34:20]:

  Well, I'm smiling because not everybody's like you. Thank God, because I don't think I'd have a job. Then there are, there are a lot of builders who don't.

  Mark Williams [00:34:28]:

  It didn't seem to help me.

  Steve Yoch [00:34:29]:

  Right. Well, it actually has more than you think. A lot of builders don't do that. They say, well, we agreed to it. I'm like, great, where's the changeover? Well, they're really mean, so I didn't get it right again. The meaner they are, the more you need it. Right. And you need that clear expectation with each other.

  Mark Williams [00:34:50]:

  I mean, I make mistakes all the time. We're dealing one fun right now where the client asked me to make the home when we were bidding it as least expensive as possible to meet their budgetary goals. And it was slightly different than the plan that we sent out. We sat down at the. At the table and I said, this bid for, you know, the siding was done different than the plan to save you money. Great, awesome. Six months go by, we started installing the siding on the plan according to how we verbally agreed it. That was my mistake.

  Mark Williams [00:35:19]:

  I fully acknowledged that because we could not find any paper trail. I looked and it turns out they're like, no, we want it vertically run, not horizontally. And we will pay for any material changes because it's a cost plus contract, but we will not pay for the $2,000 of material that's already on there. That's on you. That's going to be a tough one because they're wrong. But I also don't have a way of really proving it. It's a memory thing and I'm probably just going to go to them and say, this is the conversation we had a. They're really nice people, so it's not a contentious situation, it's going to not be a problem.

  Mark Williams [00:35:53]:

  And I'm just going to say, you know, I'll probably just say, this is what happened. This is why I did. I was trying to save you money. Here's where we're. Where we're at. What do you think is fair? And I'll see what they say, and if they still disagree, then I'll probably say, tell you what, I'll split it. I mean, I'll client. A long time ago, we had to still remember, man, some of these memories are so vivid.

  Mark Williams [00:36:12]:

  It was 2013 and I built this home and it was. I still am a little upset. Didn't have Steve as my lawyer then, but the driveway for the city, they wanted to be extra wide for. If it was like, forget that. If it was like 200ft long, it had to have a hammerhead turn for a fire truck. But that never came out in permitting, which I feel like is a city responsibility. And so we went to actually go asphalt the driveway. The city said, we won't approve that unless it's wider.

  Mark Williams [00:36:39]:

  Well, of course, the bid that I gave the client was for like a twelve foot driveway, not a 24 foot wide driveway. And the client was outraged. I remember the cost was maybe like ten grand. You know, it seems funny now in hindsight, and I just said, you know what? I don't, I can't, I can't know something that I can't know. I mean, you don't know what you don't know, but I said, tell you what, I will split it with you. Is that fair? And he was like, yes. And I've often found that one example has paid huge dividends in other examples. And of course, the client has to be genuine, that they can't just say, hey, I'm building their house.

  Mark Williams [00:37:11]:

  I think sometimes a client forgets that, you know, you get to live in the house and you get the benefit.

  Steve Yoch [00:37:15]:

  Of the bigger driveway.

  Mark Williams [00:37:16]:

  Yeah, well, not that example aside, like, I'm building you, let's say, a beautiful home. A couple years from now, you're going to sell that house and make a ton of money. Are you going to give me half of the month, the appreciation back? Because I'll sign up for that all day long.

  Steve Yoch [00:37:27]:

  Right.

  Mark Williams [00:37:28]:

  Anyway, sometimes we have to remind the client that, you know, this is your house, I'm building it for you. You know, I don't get to live here.

  Steve Yoch [00:37:36]:

  Yeah. And I think the key thing there is, again, to memorialize whatever you've said in writing in the form of a change order. Otherwise. Right. It's memorialized. Memorialized. Memorialized. And by the way, sometimes, even if you've, if it's not a formal change order, there's some other issue.

  Steve Yoch [00:37:52]:

  It does not need to be legalistic, so you don't have to write, you know, the follow. The undersigned hereby agree as follows. It can say, hey, Sally, thanks for the time. I understand that we're going to be doing X, Y or Z. We'll be there at that time. Thanks for understanding. And I hope the soccer game goes well.

  Mark Williams [00:38:07]:

  I mean, a recap. We do the recaps all the time. Time. Hey, per the conversation we just had, you know, especially as you notify or as you are aware of clients that might be more and more difficult, you can kind of see the writing on the wall.

  Steve Yoch [00:38:18]:

  Right.

  Mark Williams [00:38:19]:

  You know, you start telling your project managers every time that you meet with them, you need to send a recap of what happened. We've had a situation, and this is good advice for builders out there, too, is that I've had a client that sort of, like, think about wolves and sheep. They sort of divide the herd, and then they pick off the weak one, and then it's. Everyone agrees and they leave, and the next day they're like, oh, no. This side conversation we had over here in this part of the house was not what you all agreed with. You know, like, what are you talking about? I wasn't part of that conversation. And so, you know, sometimes you have to be really mindful that the entire group stays unified no matter where you go, that you're all together. So these sidebar conversations, which are easy to have, I mean, I'm the king of sidebar, you know, especially for a design meeting.

  Mark Williams [00:38:59]:

  And something's being talked about, like, nobody's asking me for or a grout color. Nobody cares what I think, nor do I want to pick the grout color. You know, I'll be maybe on the side talking to the homeowner about, you know, the landscaping project or the, you know, whatever's happening next. And so in a normal world, that's not a big deal. But if it starts to kind of slide sideways, to me, I found a lot of value in making sure that everyone is on one conversation.

  Steve Yoch [00:39:22]:

  Well, and everyone includes your subs, right? I mean, it's the whole trying to get. Talk to mom and dad separately and getting a better answer from one or the other. Homeowners do do that, but it's making sure your subs are in the loop, and it's also the value of having good, long term relationships with your subs. Right. And that's very important when you're dealing with a crazed homeowner, because they will seek to divide and conquer, man, that.

  Mark Williams [00:39:45]:

  You are 100% right. I heard a story once where a builder, I didn't talk to him personally. I heard this secondhand, where if a subcontractor talked to the client, they were fired. And it wasn't because they weren't trying to do good client service. It's because the client, they. They didn't want. They were trying to keep the chain of command, like the military, they're trying to keep clear. They were actually trying to do it.

  Mark Williams [00:40:07]:

  The way I understood it is very clear, very great customer service. Right. And when you change that system, ice. And basically, they had told their trade partners not to do this. I'm not sure I would personally agree with that, but I thought that was an interesting, extreme version of it.

  Steve Yoch [00:40:21]:

  But in your contracts, you have a provision that says, I, as general contractor, control and provide direction to the subcontractors, you don't. If they come in and say, I want gold colored tile or a black toilet, that's through you, not through them. And I think that having, again, back to the contract being so important, and again, you don't need the contract for the good homeowner, for the good customer. The contract doesn't exist for them. The contract exists for what we're talking about today with a crazed homeowner. It's there for the dispute. And so when you, most of the time, you don't have to worry about them talking to subs, but the bad ones, they go try to split you from your subs, and you can say, hey, look at paragraph 33. Remember that? It said in the contract, you're not supposed to talk to them.

  Steve Yoch [00:41:04]:

  Please don't. If you have an issue, I'm here to serve you. Right. And that's, that's the communication. And again, you say it that way. Why? Because they could have their phone on, right. Or, you know, you, because you want to be the professional.

  Mark Williams [00:41:17]:

  And I think you're right. I think it's hard, too. We've had situations where, you know, homeowners live right next to the home that we're building, or they're there all the time, and, you know, they're, you know, constantly engaging, which in a normal world is wonderful. It leads to this really cool relationship. You know, I've had way more positive stories than negative stories. But this isn't the positive homeowner story. This is the crazed Homeowner podcast. And, you know, and, you know, they're there to seek information, to divide, to.

  Mark Williams [00:41:44]:

  They've either lost trust or they're simply trying to, you know, let's say this tile guy, you know, this poor tile guy, you know, he's there doing his job. He just, in some, you know, not every trade partner wants to engage. Not everyone is real bubbly and outgoing. They might be a master craftsman, but they kind of like to be. I'm thinking one in particular. I won't share his name, but, like, you know, he likes to zero in on his work, and you can tell, like, he does not want to be disrupted. Well, if you go up to him and you start challenging him with, he's nothing, that's not his job, he's not comfortable, you've now made him extremely uncomfortable. I feel actually very protective of that individual, and I would feel, I would be very upset if I saw someone taking advantage of this individual specifically.

  Steve Yoch [00:42:26]:

  It's the, hey, would you be willing to do this? I have this one little thing, could you go and do that? And by the way, much more common in the remodeling environment when the homeowners are still in the house, which you try to avoid that. But sometimes the nature of the smaller projects, the homeowners there, and then they go, hey, you know, we just repaint that wall because I don't like the way that looks. And they say that to the painter, right? Well, he doesn't, or she doesn't know if they should do it.

  Mark Williams [00:42:52]:

  They're just trying to do a good job, or there might be a language barrier or whatever it is. We've actually been lucky. I do think. Actually, this is a good question for you, Steve. Do you think that remodel clients are different than new home clients? And I'll give you my answer after what I think about it in terms of, like, their personality and the likelihood of there being issues. Have you noticed any difference between the two subgroups?

  Steve Yoch [00:43:16]:

  Well, for a lot of builders, they start out as remodelers and become home builders. So they start out. So in my experience, there are a certain group of the entry level remodelers, and they're learning it to your school, the school of hard knocks, they're learning stuff, and then ultimately they get to bigger and bigger remodels, and then they start doing major remodels, and I. And new homes. So I found remodel, and then that's the end trip. They're really experienced remodelers. They're very much like the experience builder, but I see more entry level remodelers. I don't see as many entry level builders, because most of the time they've already been doing stuff enough that they're moving along.

  Steve Yoch [00:43:53]:

  So for me, that's the difference.

  Mark Williams [00:43:55]:

  Interesting. You took that question totally different, which I sort of appreciate that answer. I'm talking about the clients. I'm talking about as a client. If you are a client getting a remodel done on your home versus someone who is having a builder build a new home, you put yourself in the client's point of view. Have you observed differences between their mindsets?

  Steve Yoch [00:44:16]:

  It depends on the size and nature of the project. So if it's a redo, a bathroom, while the people are still living there, they tend to recognize that's a smaller project. They're less contentious. Generally, if they're doing a major remodel, they got to move out of the house. It's much like the homeowner because they've had to figure out a place to live. They've had to get out of the house. They've been. In some ways it's almost worse because they have been removed from their home and they want to get back where the new home person never lived there in the first place.

  Steve Yoch [00:44:46]:

  Everybody's out into date of substantial completion, but that moving them out so that they can do the thing is very, very stressful, time sensitive. Any delay with them, they go crazy. Even more than the new home because usually you Miranda's them a little bit and warned them that it's going to take a while.

  Mark Williams [00:45:07]:

  I would agree with that assessment 100%. Where I was coming at this question is, and this might just be my own experience, I feel like people that have their home remodel that we have remodeled for are. And this isn't to take anything away from my wonderful new clients, but I'm thinking just as a whole, like when you build a new home, you think it's going to be perfect. You think it's going to be amazing. And it is. And it is all those things. I obviously dispel the word perfect right away because there's nothing perfect, but it's their dream home. It's all these aspirations into a home.

  Mark Williams [00:45:41]:

  When you remodel a home, I often joke with my clients, like even a bad remodeler, it's going to be better than what's here now. True. And so I feel like the level of expectations are not nearly as high in a remodel. And we do an amazing job remodeling it. That's just been my experience. I feel like the temperature setting on these clients is like emotional rpm gauge, for lack of a better description. It just runs at a lower, lower threshold. They don't get as worked up about stuff.

  Mark Williams [00:46:11]:

  They seem more approachable. Except for the one topic, which is timeline. Yeah, that is the one thing that obviously, and I would be too. I mean, it's. And that's why we do such a. We try so hard to get them out of the home to remodel it. We're actually trying to get into a project right now and they are going to live in it, and it's an addition. So most of the house is untouched.

  Mark Williams [00:46:31]:

  But, you know, it's always one of those things you explain to people on the front end. Like, there will be days where people aren't working here, and I'm just letting you know ahead of time. And no matter how many times you tell them that, guess what happens? Someone isn't there, they notice, or two days go by or whatever a gap in a schedule. And again, this is where it goes back to, you know, I think communication is so paramount with your project managers. You know, they're going to forget what I told them, what I just said. But if your project manager is saying on a Friday, hey, next Monday and Tuesday, nobody is going to be here. Now, if you've controlled the message, you are telling them no big deal. If they have to seek out information from you, right.

  Mark Williams [00:47:07]:

  It becomes a totally different scenario.

  Steve Yoch [00:47:08]:

  100%.

  Mark Williams [00:47:09]:

  Yeah.

  Steve Yoch [00:47:10]:

  Yeah. The other big thing, when you're. When you're dealing with these homeowners that are. You're having trouble, the crazed homeowner. And they say there's a problem. We've talked about the problem, and first of all, owning it. The other thing that I think is really important is documenting it. So not only we've talked a lot about the emails, but shooting video.

  Steve Yoch [00:47:27]:

  Right. And by the way, I always say, shoot video, people take pictures, which are good. Our phones, you know, we walk around with a tv studio in our pocket now, and you really got to shoot the video. There's two reasons. One is because if you just take one picture, you might not get what you're really looking at. Whereas if you shoot the video from different angles and move around, we can always freeze one of those frames and turn it into a picture. But it becomes really important, because later on, they'll take a picture from just one weird angle, and yours will have a date and time stamp on it, and you can take it from all different sides. And the only other thing I would recommend is never talk when you're shooting the video, you always will have the option, and you don't want to be there.

  Steve Yoch [00:48:12]:

  But I've been there, where you then go to court two years later, and you're showing the video and you're able to narrate it. I'm standing in the living room looking at the kitchen, and this is the wall that they said was bowed. And here's the concern. And now I'm pausing here. What do you see here, Mark? And then you're describing it. The reason I say that is because one of my favorite cases years ago was this guy. The homeowner really had this. He could not engage in any discussion without telling you what a religious and moral and christian man he was, which he was great.

  Steve Yoch [00:48:47]:

  A lot of people are, and that's fine, but he's one of these guys that mentions it every time. But then he shoots video of our work, and later was a jury trial. He shoots a video of our work, and he swears like a sailor. I mean, he's like, effety bad. This is the worst effing blah, blah, blah thing. It actually was impressive in some ways. And so I. Then later at jury trial, showed the video, right, for the same reason, to show the video of the work that was done.

  Steve Yoch [00:49:14]:

  But also then the jury got to realize the guy's kind of a hypocrite, right? Because, of course, in his direct examination with his lawyer, he made a point of letting us know what a religious guy he was. And the point is, one, you may say something stupid like he did, you might narrate it in a way that says something you might later regret. I hope none of our listeners would be quite as proficiently profane as this guy was.

  Mark Williams [00:49:38]:

  This guy sounds impressive.

  Steve Yoch [00:49:39]:

  It was. It was really pretty great and end up being really great with the jury. But you're later gonna have a chance to narrate it. So shoot video. Keep the video and take it from all different angles. Shoot it slowly, by the way, don't jerk around with the camera. We all should know that now. Really, really useful.

  Steve Yoch [00:49:59]:

  Because then later on, there may be issues, and you want to make sure you preserve what occurred. Now you'd say, well, if I did something bad, why would I do it? I'll tell you. Because a lot of times they're going to say it worse than it was. They're going to exaggerate how bad it is, and you can show that it really wasn't that big of a deal, and you can fix it. Or even if it was a big deal, you want to preserve truth. Nobody wants to be lying. And if you lie, you usually get caught.

  Mark Williams [00:50:23]:

  That's good advice. It's funny, though, in today's social world, I mean, there's not a video I take where I'm not narrating the videos. Right. Because it's all for social media.

  Steve Yoch [00:50:31]:

  I know. Especially this is. I laugh so much. I banged in the mic. I know this is especially hard for you. You shooting video without talking would just. I think your head would explode.

  Mark Williams [00:50:42]:

  I'll have to. My project manager does not like talking, so I'll have, like, a b roll. He'll be my lawyer version of, like, the videos, and mine will be.

  Steve Yoch [00:50:49]:

  Fortunately, we've never had to do a jury trial together. Hopefully you never will. But you would be a great narrator at trial. But no talking, which is just impossible, for. You're going to have to do it.

  Mark Williams [00:51:00]:

  Not possible. We'll have two sets of videos. So actually, you touched on something that I'm kind of curious about what if you have. So let's call it the Minnesota has their guidelines, which are in our contract. You know, we build a really great home. We have amazing craftsmen. I'm really proud of the team that we have and the work that they do. We far exceeded most of the guidelines, if not all of them.

  Mark Williams [00:51:21]:

  So let's, let's just use paint, because paint is such an objective one or not objective, frankly, it's subjective. And so you do a great job. The paint, the paint is incredible. You go back, you do a fix or whatever, and the homeowner is like, well, it wasn't as good as the first time, and whether it is or isn't is not really the point of this conversation of what I'm asking. But it's still far better than whatever the Minnesota guidelines. Now, what happens when you exceed the state mandate guidelines by a large margin, yet your reputation is a higher standard and the state standard is a lower standard. How do you navigate that if the homeowner is like, like you want to get out of the project? Because it's just, it never ends. Like, it can never, you can never, you know, we'll talk, I think maybe next about the punch list, because everyone deals with the punch list, but this kind of is a good segue into it.

  Mark Williams [00:52:15]:

  How do you navigate that?

  Steve Yoch [00:52:17]:

  Well, I think two things, and I think it does lead to the punch list. But what your contract should ideally say is you don't have any warranties that exceed 327 a. Even my best builders like you, I don't ever advise them to say, we will build it to your satisfaction. There's a subjective thing that will end your life. You'll be there forever. What you want to say is we'll build to 327 a and through the building standards attached. And the building standards has standards for paint. I don't actually haven't found in that, but I found it a lot recently was cracks, right? Either wall cracks or floor cracks and concrete.

  Steve Yoch [00:52:54]:

  And it defines what the width of the crack can be. There's, you know, there's things about the amount of a floor. Is it level over x period? And when you get in a dispute with a homeowner, even in a super high end home like yours, you can say, look, ive exceeded that standard. Right? I mean, we start with that. Look, you go to the building standard. Weve exceeded the building standard. That is an additional warranty thats imposed on us by the state. But that tells you, for purposes of the 1210, usually it relates to the one thats the bumper to bumper warranty.

  Steve Yoch [00:53:25]:

  Heres what weve done, and weve exceeded the building standard. Done. Now if they say, well, golly, I want you to go fix that, that is your decision, that may be a business decision. You may say, you know what, they've been a pretty good homeowner. They've been a pretty difficult homeowner. I'm going to fix this one thing. Now what a builder needs to know is, I'm going to fix this one thing, and you can't then say to the homeowner, and I don't have to fix anything else, right? Because 327 a would make, it makes that very illegal. You can fix issues that have been identified, but you can't get a general waiver of anything else under 327 a.

  Steve Yoch [00:53:57]:

  You can get a lot of trouble with your license if you do that. But that leads us to the endless punch list, which is they keep identifying problems, right? They give you a list of ten things and then you fix those ten things, and now they got 15 more things, then you fix it. Now you got 30 more things. And what the statute says is you have to fix those things within the 1210 warranty framework. But at some point they, within two years of a discovery, a defect, they have to commence a lawsuit, they have to provide you notice within six months of discovery of that defect effect. And if they've given you notice and you think you fixed it, you think you've exceeded the building standard, you went back and did more than you had to, which is certainly what you always do, even though you don't have to, there comes a point where you need to say no. And this is really hard for builders because your reputation and you want a good relationship and you want a happy customer. But what the statute says is as long as you're saying, you know, work with you, I'll try to get this resolved, I'll do this.

  Steve Yoch [00:54:56]:

  And you're not putting a middle finger in the air. The statute of limitations is told, meaning that six month notice in two years within discovery of the defect that gets extended forever. As long as you're working on that wall and you're still trying to paint that wall, right. They got two years from when you stop and you say to them, I'm not going to do it anymore. It's a case called Valajos. Lay that out. And it's really hard. You have to say, I will not fix that anymore.

  Steve Yoch [00:55:22]:

  I have done what I'm required to.

  Mark Williams [00:55:24]:

  Do, and I am done is Valajosa.

  Steve Yoch [00:55:26]:

  Minnesota, Minnesota Supreme Court case yeah.

  Mark Williams [00:55:29]:

  And each state would be different than I would assume.

  Steve Yoch [00:55:31]:

  Yes. And Wisconsin has a completely different statutory framework, by the way, for our friends in Wisconsin, we don't have. There's no three. I'm licensed in Wisconsin. There's no 327 a in Wisconsin. It's like happy land over there. But again, it's hard. But at some point, when you feel like you've done enough and done more than you should do, I almost always counsel people.

  Steve Yoch [00:55:52]:

  You're better off doing a little bit more than fighting them, but eventually you say no, and that makes them unhappy, and they may then choose to engage in all the other sort of activities we've already talked about.

  Mark Williams [00:56:03]:

  Yeah. Interesting. From the endless punch list, one thing that somebody gave me very good advice on was, even as you come in at the end of a job is identify. Let's say you have 20 things, 100 things, doesn't matter. Identify them all. Associate a value to each one. I started doing this about three, four years ago, and it's made a big difference because it used to be, let's say you're closing on a home, and let's say their last payment was 250,000, let's just say, of a $2 million bill, whatever it is. And they would hold up the 250,000 until every single one of those items was done.

  Mark Williams [00:56:35]:

  And it could be one that was like $100, $200, $1,000. And by putting a number associated with each change order, you can get releases against each one of those. Yes, that was number one. If you're. If you're out there and you're listening, you haven't done this like this. That's gold. You have to do that. The second one, that actually, I'm just coming on my first house, having done this.

  Mark Williams [00:56:54]:

  I heard another builder doing this, and I'm going to do it where it's regarding timing. It's easier if you educate the client on the front end than the back end for more time. And what often happens with all of us builders is you. You know, they are so excited at the schedule that the day that you're done or you get your certificate of occupancy, they're thinking in, they're lining up their movers, they're moving in the next day.

  Steve Yoch [00:57:14]:

  Right.

  Mark Williams [00:57:14]:

  Well, when am I going to have a couple weeks to do the punch list? And so what has happened over my 20 year career is, let's say, steve, you're my homeowner. I will show up with you and your wife, we'll go through, you know, three days before closing, the house is finally cleaned. We have a couple days before you move in, and then we get this. We'll just call it 100 item punch list, which is a little bit extreme. Let's call it 30. Yeah, well, what am I going to do in three days? I got to schedule people. I don't think I have to order stuff. Usually it's scheduling.

  Mark Williams [00:57:39]:

  Paint, drywall, wood floor, blah, blah, blah, blah, blah. Well, you move in and now you ding up a bunch more stuff, it gets added to the list. The old way I used to do it, and then it would take about six months between your schedule, your work schedule, not interrupting you, people coming and going. It was a nightmare. So I don't know why it took me so long to figure this out. Probably just by listening to other people's podcasts and learning what other builders do, which hopefully someone is listening to this episode, and you can avoid this. And now what we do is we say you can't move until 30 days after we have your co. And so we'll still do that same meeting with you and your wife.

  Mark Williams [00:58:13]:

  But now we have 30 days. But again, we wrote that into our contract. It's from day one, and so there's really no issue. We even build the leg into the schedule. And so I'm really, really, really excited to have this job that we're working on right now on Lake Minnetonka that's gonna finish, and we're gonna have the proper time to do all of these things. So when they move in, it's crickets.

  Steve Yoch [00:58:35]:

  Well. And it helps prevent them from becoming crazy.

  Mark Williams [00:58:38]:

  And they're gonna be happy.

  Steve Yoch [00:58:39]:

  Right. I mean, the flip side of having happy is avoiding crazy. Right. And to the extent you can create expectations and good communication, it depressurizes them. Right. And that's one of the great challenges.

  Mark Williams [00:58:52]:

  Yeah. One, I think if you can always leave, I think about. I think, what industry? Well, I'll ask you this question. What industry do you think is maybe at the top of the food chain in terms of hospitality?

  Steve Yoch [00:59:07]:

  You know, I'm a dirt lawyer, so all I know is dirt and real estate. And so for me, I would say this is a very service oriented business. You probably know because you're a big thinker, which is the one that's rated that way. But for me, I think. I think the folks listening to this who are builders and developers, they've got a pretty high demanding job in terms of making people happy.

  Mark Williams [00:59:32]:

  I like your safe answer.

  Steve Yoch [00:59:34]:

  Well, no, because I have no idea where I'm going.

  Mark Williams [00:59:36]:

  With this?

  Steve Yoch [00:59:36]:

  Is it lawyers?

  Mark Williams [00:59:37]:

  No, no. I was laughing because I gave it away in my, where I was thinking, because the food chain, it's the food industry. Hospitality. When I think, I think of home hotels and I think of food, I just read this fascinating book called unreasonable hospitality we won't have time to talk at all about in the next four minutes. But anyway, I guess the bottom line is I think we have a lot to learn from the hospitality. And I think about, like, the end of a nice restaurant. You know, sometimes the chef will bring out like, hey, you know, courtesy of the chef, here's a little mint, or here's a little treat. And, like, where I'm going with this is years ago.

  Mark Williams [01:00:06]:

  You know, my dad, who was a builder for 30 years, would often say, you know, save a little something to give the client at the end to kind of leave the, you know, you've just gone for a year or two year build. Like, try to leave it on a high note, because at the end of the time, even your best clients, they just want to move into their house. You've been there for two years, you know, and I'm thinking one in particular where one of my favorite all time clients. But even so, like, two years of seeing the same person every two weeks, even as much as I adore them, you're kind of just like. You're kind of ready to be like, it's done. We built this house, and after about 30 days, 60 days, you sort of miss them. You're like, oh, man, I kind of miss that person. I guess I gotta go see them.

  Steve Yoch [01:00:42]:

  But they're the one not writing you the nasty tasks. They're amazing.

  Mark Williams [01:00:44]:

  And, you know, this episode is all about the difficult ones, and hopefully the things that we've covered. You know, people can either relate to or they can help prevent it by being aware of it. But, you know, I think we're super lucky because, you know, 18 out of 20 are gonna be great clients. Well, not great, but they're going to be really good. And, you know, maybe we'll have to redo it. We'll have to do some stats out there and see what people vote. But, you know, it's really just a few that you really have to be prepared for.

  Steve Yoch [01:01:12]:

  Right?

  Mark Williams [01:01:12]:

  Because by and large, all the things we covered, I mean, I've gone 20 years, and it's only been the last three or four that I've learned so much of this stuff.

  Steve Yoch [01:01:19]:

  Well, and it's, again, I start with, it's a little voice. It listen to your little voice on the front end. And you always have to be the professional. No matter how badly they behave, you've got to behave better.

  Mark Williams [01:01:31]:

  What was that? You had a story one. What was the one where the guy was videotaping on the front porch? What was that one?

  Steve Yoch [01:01:37]:

  Yeah. So this is the ultimate be a professional story. Your memory is really good. So I had this wonderful client. He's big, giant guy, bear of a guy. And there was a complaint made in the department of labor and labor and Industry against him. And they had sent in a video to the department of industry, which I got a copy of. And it shows, like, there's a bay window in the front of the house, and the driveway is right there.

  Steve Yoch [01:02:04]:

  And my guy pulls up in his truck, and again, this is all in the video. And you can see, like, the window's been cranked open and someone's filming it, and the husband is in the garage, and he comes forward and starts screaming at my client, just like. And by the way, you got a relatively little guy. My client could have reached out and just broke him over his leg. And my guy puts his hands up and say, hey, listen, you need to calm down. And this crazy little man runs back into his garage and comes out with a hoe. It's the kind of hoe where it's got, like, the little hook on it with a little triangle deal, and he's shaking it at my client, and he's threatening him, and my client goes, listen, you're not going to calm down. I got to leave.

  Steve Yoch [01:02:43]:

  He gets in his truck, and he drives away. And you say to me, now, Steve, why do we have this video? Well, because the guy's wife was in the bay window filming the whole thing, and for some reason, they thought that video would be helpful.

  Mark Williams [01:02:57]:

  How in the world with the department.

  Steve Yoch [01:02:59]:

  Of Industry, needless to say, it was immediately dismissed. By the way, I had a huge laugh with the investigator at the street, and it was a keeper. I wish I had actually kept the video because it was so wonderful. But that's like the in fight or flight, it would have been very natural for my guy to swear back at him or push him away. I mean, the guy got pretty darn close with the hoe, and instead, he did all the right things. He did exactly what you're supposed to do. It, by the way, caused the labor industry to dismiss the complaint almost immediately. And that's an extreme example of what really good builders are about.

  Steve Yoch [01:03:34]:

  Right. It's recognizing that they're emotional. We are supposed to not be emotional even though, builders are human beings, and as bad as it can be, if you react one way, it can be really good the other. And he was. He was a wonderful guy and just chuckled about the whole thing. And as it turned out, it all turned out so. It was my best crazed homeowner video.

  Mark Williams [01:03:56]:

  I mean, sometimes when they're extremely crazy, like in that situation actually, I mean, it helps you.

  Steve Yoch [01:04:00]:

  Oh, yeah, no, that's what I mean.

  Mark Williams [01:04:01]:

  Gets the moderate crazy. That's difficult.

  Steve Yoch [01:04:03]:

  It is.

  Mark Williams [01:04:04]:

  I mean, when you go super nuclear, it almost becomes laughable.

  Steve Yoch [01:04:06]:

  No, that was laughable over the top. It's the person that's written you a very, very detailed and quasi rational email that is also irrational and unfair. That's the harder one. And that's the one where it's an email, it's not an abusive text. They're just being unreasonable. Making your life really hard.

  Mark Williams [01:04:24]:

  Appreciate you coming on again. At this point, we're just gonna have to have. It's an annual visit.

  Steve Yoch [01:04:30]:

  Well, and I'm here dressed differently today.

  Mark Williams [01:04:32]:

  I know.

  Steve Yoch [01:04:32]:

  I like it because I want to make a plug to our listeners. My wife is one of the founders, the women's Minnesota Aurora soccer team. They have a game this evening. And you and your daughter have been to games?

  Mark Williams [01:04:42]:

  I think we're going to the father's day game.

  Steve Yoch [01:04:44]:

  We are.

  Mark Williams [01:04:44]:

  Yeah.

  Steve Yoch [01:04:44]:

  And so anyway, it's a wonderful, wonderful venue, wonderful sports. And I got my jersey on because I'm going right after this.

  Mark Williams [01:04:51]:

  Well, I'm excited. I like it. Tuned into YouTube. You can see the green and white stripes and go aurora. So if people want to reach out, LinkedIn is probably a great spot.

  Steve Yoch [01:05:00]:

  LinkedIn. Listen, I'm the only yoc lawyer in Minnesota, so just yawk lawyer or dirt lawyer, probably end up with me, too.

  Mark Williams [01:05:08]:

  Probably. Well, thanks very much for coming on. Appreciate it.

  Steve Yoch [01:05:10]:

  It was wonderful being here. Thank you.

  Mark Williams [01:05:12]:

  We are happy to announce that we have a one to one coaching session that can be found on our curious builder podcast platform. So you can book a time with me and it'll be 1 hour to ask any sort of questions that you want. Talk about business, talk about life, talk about scheduling. Maybe you're dealing with a difficult client and you just want to maybe shop with another builder and say, hey, how do I handle this? Or maybe you're looking to rebrand your company, whatever it might be. You can head to our website and book a time, and I'd be happy to sit down and give you that hour and we can talk about whatever's on your mind. We're excited to announce that we have partnered with harness workwear. They're an amazing shirt company. I'm actually wearing it right now if you're on YouTube, softest shirt I've ever had.

  Mark Williams [01:05:52]:

  Also the most durable. There's a reason these guys make shirts for work wear. If you head to our curious builder webpage under the Merch Channel, you'll see we have a limited time only of our pre launch of the Curious builder shirt. We also have our new monogram that's going to be on the back with a cool little custom tag. If you want to support the show, if you want to support what you're listening and small businesses, both for harnish as well as the curious builder, please go there, buy a shirt, buy two. Give one to one of your colleagues, maybe one of the tradesmen that you think might like the show, and you're supporting a small business and you're supporting this podcast. So I appreciate it. Thanks for listening to the Curious Builder podcast.

  Mark Williams [01:06:28]:

  If you like what you listen to, please give us a five star rating and write us a review. It really means a lot. It's a great way for us to just understand what you like about the podcast and what we can keep doing so like and review. And please share with your friends and family. Find out more@curiousbuilderpodcast.com.

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