Real estate reporter Roger Showley at the U-T has this unusual story today about homebuilder Lennar. Apparently, Lennar is asking contractors who’ve participated in their developments to reduce their invoices on finished work by as much as 20 percent or face removal from the homebuilder’s bid lists.

From the story:

“This is a business proposition,” said Lennar’s southwestern U.S. regional vice president Jeff Roos. “For an immediate reduction, you will continue to stay on our bid list. If you’re not interested, we’re happy to pay you.”

But specialty contractors groups have compared Lennar’s action to extortion and have asked the state attorney general and local district attorneys to investigate.

“We believe this potentially criminal act is a flagrant example of the abuses of power builders exercise over trade contractors,” wrote Brad Diede, the specialty contractor organization’s executive vice president.

For a story a few months ago on homebuilder cutbacks, I’d mentioned some of the ways Lennar had been impacted — including a Starbucks-to-Folgers switcheroo in the company breakroom. Here’s a snippet from that story:

Cutbacks on those overhead costs are hitting the San Diego division of Lennar Corp., said Jennifer Bonasia, the company’s director of homebuilding for the region. But the company has kept pace with its business plan for the year, she said — a rarity in the slow market.

“We have not laid-off people,” she said. “We’ve laid-off lunch meetings, company functions. Trimming the fat and saving every penny.”

Looks like the homebuilder’s asking not just its direct employees to cut back.


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