Wednesday, September 27, 2006

The Difficult Contractor - When the Contractor Abandons the Job

When a contractor delays a project, it causes problems for the homeowner. When a contractor abandons the job in its entirety, even more serious consequences may occur. How can a homeowner know when a contractor has abandoned the job? Sometimes it's obvious. If the contractor comes and packs up his tools, it is clear that he is finished. If she does not show up for an extended period of time, then it is likely that she won't return. It is not uncommon for a contractor to stop paying subcontractors prior to abandoning a job.

What can a homeowner do? First of all, hopefully the homeowner has not paid the contractor in full. The homeowner should always have an agreement that some money will be retained (usually 10%) until the job is completed to the parties' satisfaction.

Then, the homeowner should send the contractor written notification that the contractor has breached his agreement, and that the homeowner is going to mitigate damages by hiring other contractors to finish the work.

The homeowner should not renew the permit in his own name, because he or she can then incur liability for the construction work and could invalidate rights under the law. The homeowner should also be aware that she may run the risk of her homeowner's insurance being cancelled if unsafe conditions exist.

The homeowner should not commit the same mistakes twice. She or he should get at least three quotes to finish the work. The homeowner should keep in mind that he has a duty to mitigate damages, meaning that he cannot just hire the most expensive contractor and go after the contractor for the full amount of the quote. The price for finishing the work must be reasonable.
The homeowner should also try to avoid paying subcontractors twice, unless the amounts are relatively small and it will make the work get done. The subcontractor's contract is with the contractor, and the homeowner is not liable if the contractor does not pay.

When the contractor abandons the job, the homeowner's only option is to try to recoup money once the project is finished. Hopefully he will have held back enough money to cover the cost of finishing the work. If the homeowner ends up spending more, he will have to do some research to find out if the contractor has any assets and if it is worth filing a claim against him. In Massachusetts, the state will pay up to $10,000.00 of a judgment if the contractor flees the jurisdiction, files for bankruptcy, or if the homeowner is unable to collect.

Homeowners should follow their instincts if they see evidence of trouble. If the contractor starts asking for more and more money, the subs start to complain about not getting paid, or the contractor disappears for days at a time, these are signs that the contractor is having some sort of problem, and may bolt. The best way to deal with this is to make sure that payments are made as work is completed, and try to meet with the contractor to work things out. If the contractor refuses, the homeowner must make sure that he retains the funds for the work not yet completed in order to be able to pay someone else.


At 12:09 PM, Blogger Ronan Jimson said...

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At 2:17 PM, Blogger Dave Herman said...

Thank you for these tips. I have a question about an abandoned or unreasonably delayed contract: if the contractor leaves behind tools, is there a point at which the homeowner can assume possession of those tools?

Thanks for your time and information,


At 11:47 AM, Anonymous Anonymous said...

What about when the inverse is true. A difficult homeowner who is constantly changing things and looking for free work?

We are trying to finish up a master bathroom remodel. The homeowner added 18 items after signing our agreement - big ones like steam shower, adding a skylight, closing off a window in the closet and residing a section of the house, plus many small ones. And he expects the timeline to stay within what was orginially quoted.

Now he had the plumber install a jacuzzi tub but the plumber is only familir with installing in a wet mortar bed and not a dry bed so he doesn't secure straps and the lip of the jacuzzi tub is uneven (jacuzzi allows a 1/4" variance of products direct from factory). We built deck and poured level mortar bed. Deck is level, tub is level but homeowner is looking for us to do free work - wanted to blame us for uneven lip until we proved that jacuzzi allows for variance and tub and deck were level. And while he agrees that the plumber is responsible for installation he expects us to secure it and caulk it for free because we creaed a drybed that plumber was not familiar with.

He also added having us remove his bedroom door and replace it with a new door. This is outside the scope of the original agreement. Since we did remove the door upon his request are we required to replace the door?

He is currently in Florida and will be for another two weeks and changed codes to the house because he refuses to pay for the job unless we do these extra things for him.

Do we have any recourse, I just see him adding work and refusing to pay as blackmail.

At 9:11 PM, Anonymous Anonymous said...

We entered into a contract with a licensed subcontractor last year. The job was supposed to last only a few weeks (finished basement), but turned into a 7 month job. It turns out that he ran the electrical work (without a license) and paid an electrician to come in, sign off on it, and submit it to the town, even though he did not do the work. We had constant electrical problems for 6 months with the contractor not calling us back for 2 months at a time. He brought in 2 different electricians to try and fix the work .. it was a long process. There are still items that we discussed prior to signing the contract that are not done to our satisfaction (a dehumidifier that does not work, incomplete staircase, non-vented door for our furnace area, surge protected outlets not installed, etc..). Due to this and the inspection just being completed in October we have not paid him the remaining balance, however.. we also have not heard from him since I told him of the items that we are unhappy with. He is now suing us for an additional amount of money (on top of the remaining balance) that he is claiming that I agreed to, and did not. I do not know what to do!! How do I prove that I did not agree to these additional charges and that at no time did he indicate to me that we where going over our agreed amount? I would also like to know if I have any grounds to complain/countersue about him doing the electrical work without a license and us paying for what we thought was "licensed" work. In addition, do we have any grounds to say that for what work we consider faulty and incomplete we do not want to pay for?

Thank you!

At 10:41 PM, Blogger said...

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At 11:02 PM, Anonymous Anonymous said...

I live in Florida and am having big issues with a contractor. He was hired by us to restore our home after a fire. He is supposed to be paid in phases as the work is completed for each check. He is paid through insurance department with our mortgage company. He has been paid $72,000.00 so far and insists the work is 91% done it is not. The original bid and estimate was $62,000.00 but figured with some add ons $72,000.00 leaving us a little left to move back in and refurnish etc. well well well, He has received $72,000.00 thus far from mortgage company. There are no services rendered, no work done that matches his worksheet presented to Mortgage company. I cant figure how the mortgage company has allowed that money to be released when there is no physical work. I called the insurance Claim Department and told them the story. They said I had to sign a release of contract and send certified mail etc. What would that mean to us as far as recovery goes? The insurance also said the checks are based on the estimates stated in contract. WHAT? The contractor has received another $10,000.000 check and wants us to endorse it. We have refused due to not being satisfied of the level of work done in this final phase for the monies paid. we have no flooring ,no cabinets, no appliances, no plumbing and there are holes in the floors and walls by receptacles. It really is a crying shame of a mess. so at this point we are out of insurance monies and our house is unlivable.Our lease is almost up in our temporary living arrangements now. we have no money to pay an attorney to sue. we are broken The contractor now has threatened to sue for unpaid balance of services rendered, ARE YOU KIDDING ME? He wants all the insurance monies before he finishes. he hasn't even started anything it has been months.I have looked into this man and wow he has different companies with same po box but all companies have a very different physical address. I have also found he was sued by a woman in Texas in 2013. She won and he fled and changed ownership from his then company which was out of Colorado springs and had a st Petersburg fl po box like all his other companies. he has a sidekick who is also involved. and when I look up all these companies wow. he is a scammer that scams and gets away with it. I have informed everyone in my state government from city to county. Time is ticking and we need to get back in that house.I don't know where to go or what to do from here. it is a drama and there is so much more to the story. it gets better or worse. is there any possibility to get our money back to fix the house? It is a nessy situation. What do we do from here? Help!

At 10:25 PM, Blogger Roberto Hernandez said...

im a general contractor. how can i leave from the project with out problems. for example if i bid a job and i bid it low and at the end i dont half enough money to complete the job what shoul i do? please help

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