Friday, February 15, 2008

Anatomy of a Claim Against a Contractor

Even though every client's claim is different, there is a common approach to most home contractor/homeowner disputes. Clients want to know the big picture and the pros and cons of the options available to them. From the homeowner side, the steps to take are fairly consistent:

1. Send a demand letter-In Massachusetts, any violation of the Home Improvement Contractor Statute is a per se (automatic) violation of the Consumer Protection Statute, M.G.L. c. 93A, which affords one the possiblity of double or triple damages, attorney's fees, interest and costs. In order to comply with the requirements of 93A, one must write a 30-day demand letter describing the unfair and/or deceptive practice that has occurred and making a demand for damages or action on the part of the contractor.

2. Evaluate-Evaluate whether there has been a response from the contractor and see if settlement is possible.

3. File suit or file for arbitration-In order to file suit, determine the likelihood of success and see whether a judgment would be collectible. See whether the contractor has any assets that can be attached (if one can put a lien on the asset).

See if the case qualifies for the state run Home Improvement Contractor Arbitration Program. Read the contract to see if there is an arbitration clause. Determine if the other side will consent to private arbitration or mediation.

Discuss the pros and cons of arbitration vs. litigation.

Continue to see whether settlement is an option.

Even though the consumer may be able to claim attorney's fees, he should always keep in mind that they are not usually included in a settlement figure, and judgments are not always collectible.

Homeowners should therefore try not to throw good money after bad, and should continually re-assess as the process continues. Litigation can become quite costly fairly quickly, so parties should make informed decisions about how to proceed.

Tomorrow-Claims From the Contractor Side

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