Saturday, June 17, 2006

How to Decide Whether to Hire an Attorney - The Homeowner

Homeowners do not always need to hire an attorney to review the contract before they embark on a home improvement project. If the job is a small one, or falls within the small claims limit in your state, you may decide to forgo the expense of having a lawyer involved. The trick is to envision the worst case scenario and think about whether you can deal with it on your own. Having floors refinished can cost less than $2000.00, so it is probably not worth it to pay someone to review the contract. On the other hand, if the job has the potential of causing damage to the premises, the damages might be much greater than one might anticipate.

Another benchmark is if your state has a Guaranty Fund. In Massachusetts, homeowners can collect up to $10,000.00 if a contractor does not pay a judgment, files for bankruptcy, flees the jurisdiction, etc. I know one acquaintance who hired someone to install new windows in her home. He took the money and disappeared. She was able to collect from the Fund, and did not need to involve an attorney in the process.

If you are going to review your own contract, you need to educate yourself. There is a sample contract at a Massachusetts government website that provides a good guideline. Be careful about clauses awarding attorney's fees or mandatory arbitration or mediation clauses. One client won his claim in arbitration, but the arbitrator awarded attorney's fees to the losing party, and the contract allowed him to do so.

Having an attorney look over your contract is generally not that expensive, and may prevent huge problems down the road. I know that I spend approximately 2 - 4 hours reviewing a simple contract and I have always had suggestions to make. At the same time however, it may not be truly necessary. Just make sure you make an informed decision.

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