Do you pay for a contractor that does a poor job of a renovation?
A commonly fielded question yet many homeowners struggle with a firm course of action. Well, there are lots of ways to handle this. You may file a lawsuit or claim damages.
Your circumstances will influence how you resolve the conflict. When you allege that your contractor has performed shoddy work, the burden falls on you to prove as such.
Home renovations pose pesky challenges if you’ve not been documenting the project’s progression. Through a blow-by-blow account, you can show how and why exactly the work looks to be shoddy. It helps you build a case. It gives you the confidence to speak in concrete terms.
When you get your allegations verified by other licensed contractors, you have a solid case to pursue the matter whether in front of a judge or an insurance agent.
So what options do you have to resolve a contractor’s shoddy work?
Let’s walk through 7 of the most tested approaches.
Table of Contents
1. Speak to your contractor
Often, talking through specific issues directly and courteously leaves both parties less hassled. When you point out what went off track according to the discussed contract, you’re better able to work through missteps. Understanding your contractor’s approach will give you the essential insight to decide the next steps.
In all cases, ensure that you’ve only paid the contractor after being fully satisfied with the output. Holding off on payments is one of the best ways to safeguard further damage and paying for undeserving work. Thorough inspections marked off against a punch list would help prevent he-said-she-said arbitrations.
If you find, as many do, that your contractor is less than co-operative, you might want to seek legal recourse.
2. Terminate the contract
In order to present reasonable grounds for removal, you would ideally gather enough documented evidence as explored above. Terminate the contract with immediate effect since you don’t want your contractor causing further damage by working some other area of your property.
Alternatively, if they’ve pushed way past their date of completion of the renovation, the project is already loss making with little scope for damage reversal. Click for more info on how including a clause on liquidated damages protects you from potential damages related to schedule overruns.
Termination will invite pushback from your contractor. Folderize your documentation to represent evidence behind ceasing work. Wherever and whoever you speak to, you’ll have a consistent story to tell backed up without coming across as spouting airy theories.
A good step would be to read the contract forwards and backwards to ascertain what payments you do owe and what doesn’t qualify as owing.
3. Initiate the claims process if your contractor is bonded
While assessing contractor damages on your property, you’re required to check whether they had a surety bond policy from an insurance agent. Such surety is bought to protect contractors against client disputes, which means that you get compensated for shoddy or incomplete work.
For instance, if your contractor damaged the plumbing, your home is at risk of being deluged if the pipes aren’t fixed in time. Meanwhile, plausible damages can be compensated through the contractor’s surety bond policy.
When you’re left with the choice to contact their insurance agent, you can file a bond claim. To avoid procedural bumps, be sure to get a copy of your contractor’s surety bond policy before signing the contract. Doing this would ensure that even if your contractor stops responding, you can initiate the claims process with their insurance agent.
As a bond is filed, the insurance agent or company turns to the contractor to reimburse them, naturally, no contractor wants to be pursued for paying off insurance agents for claims against them.
4. Raise your issue with the state licensing board
Working with licensed contractors comes with advantages you don’t always foresee. In times of disputes, you can report them to the state licensing board that helps enforce consumer rights per the agreed contract.
No contractor wants to face the risk of license seizure by the SLB. To be in good standing, they will often course correct without worsening their future prospects.
This is great leverage to have the contractor act on dispute resolution.
The mediation process differs by the province or state, always contact your state’s helpline to understand what steps should be taken.
5. Approach a mediator
In the event of your state’s licensing board declining to address your complaint, you can request arbitration by hiring a mediator/arbitrator. A mediator may not be able to enforce their recommendations on the parties whereas an arbitrator’s decision is binding.
For this reason, thoroughly perusing your renovation contract will save you from progressive hurdles in dispute-ridden situations. Check dispute clauses to prune out unfair terms. At the contract approval stage, parties can agree on a specific third party arbitrator or mediator to step in when disputes strike.
With that done, the contractor is bound to accept mediation or arbitration.
6. File a lawsuit at a claims court
In a small claims court, parties can fight their cases without lawyers. However, a plaintiff can only sue for a certain amount.
From reporting project delays to property damages, small claims court is a great alternative to mediation. Your state will define the kind of legal recourse available under the jurisdiction.
The procedures of small claims courts are easily manageable as they’re meant for laypeople to breeze through without an attorney. Your local jurisdiction’s court house will help you with relevant forms needed to be filed.
7. Work with a construction attorney
If push comes to shove, onboard an attorney specializing in construction cases. The involvement of a specialized professional comes at a cost, so ensure your damages are substantial enough to sue for a full-fledged lawsuit.
Suing your contractor for property damages should always be a last resort. Litigation is messy and expensive and doesn’t always guarantee a favourable outcome. It also opens you up to countersuits that can drag you deep down a financial black hole.
Much of the agony that comes with seeking a resolution to shoddy work stems from homeowners or real estate investors being passive.
Undocumented projects lead to long-drawn disputes with legal loopholes. Importantly, they need to design a project management system where accountability is managed without ruining your relationship with your contractor. Nobody wants to work with an unruly, nitpicky, and unreasonable party that secures their interests trampling over another’s.