Home Contractor vs. Homeowner

Worker's Compensation Information Available Online At the Massachusetts Department of Labor Website

2011-04-25T23:32:00.001-04:00

Mark Paskell first posted this at his blog,

http://www.thecontractorcoachingpartnership.com/Blog-Contractor-Coaching--Construction-Business-Coach-EPA-RRP-Lead-Rule/, but I think it is so important that I wanted to post here as well. Make sure all of your contractors have worker's compensation policies if they have employees. If not, you may be held accountable if someone gets injured on the job. Bravo to the government of MA for making this information available to the public.

Here is a brief excerpt from the Massachusetts Department of Labor website;

Patrick - Murray Administration Launches Free Web-Based Tool

Will help Public Verify if Businesses have Workers Compensation Insurance Policy

Boston, MA - The Executive Office of Labor and Workforce Development (EOLWD) today announced the launch of the Massachusetts Online Proof of Coverage Application (POC), a free web-based tool that will assist the public in verifying whether a particular business has a current workers’ compensation insurance policy.

While the POC application is not designed to detect fraud, it may also assist EOLWD’s Department of Industrial Accidents’ investigations in determining whether fraud exists.

Employers are required by law in Massachusetts to carry workers compensation insurance to assist workers in the event that they are injured on the job. While the vast majority of Massachusetts businesses carry a policy, those who are not in compliance shift the burden onto those business that do. As a result, over $53 million has been paid out of the Workers’ Compensation Trust Fund over the past 10 years to pay for injury claims of workers who were employed by businesses that were not in compliance. DIA works closely with businesses through payment plans and more aggressive enforcement measures to make sure they are compliant.

The Lead-Based Paint Renovation, Repair and Painting Law Goes Went Into Effect on April 22, 2010

2010-05-25T21:31:00.001-04:00

Homeowners who are considering doing a renovation must know that if their homes were built prior to 1978, their contractors are required to follow certain procedures if they are going to disturb more than 6 interior square feet of paint or 20 exterior square feet of paint. This law requires that the general contractor must become certified with the Environmental Protection Agency (EPA), and that the contractor himself take an eight-hour class in order to become a certified renovator and learn lead-safe practices that contain lead dust.

Although the EPA claims that it will be doing a publicity campaign to inform homeowners about the Renovation, Repair and Painting Rule (RRP Rule), I have heard very little about it outside of construction circles. So, I feel that it is important for me as a construction lawyer to educate the public about this rule.

First of all, the preparation and education needed to comply with the law are going to cost the contractors more money. This will be reflected in an increase in the cost of jobs. The contractors must pay at least $300.00 to certify with the EPA, $200-$300 on average for the certified renovator training, the costs of training their workers and/or subcontractors, and additional costs for materials (plastic, protective suiting, masks, duct tape) and very expensive HEPA vacuums.

Homeowners who ask contractors to circumvent these practices and operate in violation of the law are doing these contractors an extreme disservice. This law is in place to protect homeowners and their families (and more particularly, pregnant women and children under six) and the contractors from potentially toxic lead dust. Lead poisoning is a real problem with potentially tragic results, and following the lead-safe practices has been shown to significantly reduce the exposure to lead for all involved.

Please understand that your contractor is doing the right thing by giving you a lead-paint brochure and following the rules. He could also face significant fines ($37,500.00 per infraction, per day) for failing to comply with this law. So, please do not blame the messenger. Respect your contractor and do not ask him to break the law.

Exterior Remodeling Offers the Best Value for Home Improvement Projects

2010-01-16T10:10:00.002-05:00

If you're trying to decide on a renovation project, here's one way to make your decision:

http://www.realtor.org/rmodaily.nsf/pages/News2009121701?OpenDocument&WT.cg_n=RMO&WT.cg_s=RSSDaily

Green Houses are Booming

2009-12-11T09:53:00.001-05:00

Statistics keep supporting the fact that green construction is up, even though the construction industry has been hit hard by the economy. If you aren't learning about green construction, you should be.

http://content.usatoday.com/communities/greenhouse/post/2009/12/green-home-sector-booms-despite-housing-slump/1

Challenge to Massachusetts Contractors

2009-12-11T00:38:00.001-05:00

Send me your residential renovation or new construction contracts (residential or commercial). After signing an engagement letter, I will review your contracts for free! If I don't find five things that might hurt your business, I will donate $50.00 to charity. If I do, you agree to donate $50.00 to charity. That's it. No strings attached. You do have to let me explain my recommendations to you; preferably in person.

Why Builders Shouldn't Cut Their Prices

2009-10-21T22:30:00.001-04:00

In a previous post, I discussed why now is a good time to renovate. I pointed out that builders are not as busy and can devote more time to their projects, the economy has weeded out a number of "fly by night" contractors who were not truly dedicated to the profession and there have been sales on supplies and materials. One advantage that I did not mention, however, was the opportunity to ask builders to cut their prices. That's because I do not believe it's reasonable for owners to try to negotiate lower prices, and it's not good for the profession for builders to do so.

Professional builders are usually quite realistic when preparing proposals for projects. I have met many contractors who proudly tell me that their jobs do not go over budget (barring unforeseen circumstances). They are usually quite clear about their markups and profit margins and accurate when determining allowances. They exemplify the adage that "you get what you pay for."

Consider for a moment the bid that comes in that is significantly lower than the others. Owners may be happy to seize the opportunity to get a job done for a bargain price. However, I have frequently seen the rest of the story in my practice. The project begins and then the owner is hit with a series of change orders that jack the price up to those of the other bids, or once the work is finished, the owner receives a final bill for "extras" that achieves the same result. Or, the contractor cuts corners and substitutes inferior materials or does work that is not up to a reasonable standard. At that point, a huge dispute arises and the parties end up in costly litigation.

Although this post may be filled with cliches, if something seems "too good to be true," it is. Choose a contractor based on references and experience. Do not try to bargain and take advantage because construction is slow right now. It is better to change the scope of your project and pay a fair price. This benefits all of the parties in the end.

Time and Materials Contracts-Are They Illegal in Massachusetts?

2009-10-17T10:47:00.000-04:00

I must admit, this question has been plaguing me as it pertains to Massachusetts. This issue applies to residential renovation only, but I know of many high-end contractors who use this method for their projects.

Massachusetts law provides:

Chapter 142A: Section 2. Residential contracting agreements; requirements

Section 2. (a) Every agreement to perform residential contracting services in an amount in excess of one thousand dollars shall be in writing and shall include the following documents and information:

(1) the complete agreement between the owner and the contractor and a clear description of any other documents which are or shall be incorporated into said agreement;...

(4) a detailed description of the work to be done and the materials to be used in the performance of said contract;

(5) the total amount agreed to be paid for the work to be performed under said contract;

Given that a Time and Materials Contract does not have a price, I would argue that it violates the Home Improvement Contractor Law. Further evidence to support that belief was supplied by the Office of Consumer Affairs and Business Regulation. They administer the Home Improvement Contractor Arbitration Program that is run by the state. The program is supposed to provide consumers (and contractors) with a more economical alternative to resolving disputes than litigation and does not require the parties to hire attorneys.

The Office of Consumer Affairs and Business Regulation recently rejected a claim filed by a colleague because they said that the Time and Materials Contract made it ineligible for the program.

The purpose of a Time and Materials Contract is theoretically to protect both the owner and the contractor. The owner is only paying for the cost of the actual materials (usually with a mark-up) and the actual hours worked. The contractor does not run the risk of under-bidding a job and much of the risk is removed because he is paid for all of the actual effort expended. These kinds of contracts can be fraught with problems because homeowners frequently question the amount of time spent and are frustrated if the contractor cannot substantiate his records. That said, as long as the contractor stays in constant communication with the owner (I believe in weekly meetings), they can work well. They also allow for instantaneous change orders to keep the project within budget.

However, when one looks at the statute, it requires, "the total amount agreed to be paid." Contractors should keep in mind that any violation of M.G.L. c. 142A is an automatic, per se violation of the Consumer Protection Act, M.G.L. c. 93A. Under that law, the consumer may obtain up to double or triple damages, attorney's fees, interest and costs in a verdict against the contractor.

So, a colleague has suggested that one way to avoid this issue is to include a guaranteed maximum price (GMP) in your contract. The GMP could be adjusted if necessary when a change order occurs. It is also important to include a detailed scope of the work to validate that price. I strongly urge all of you to include a GMP in your contracts and make sure that you ask for no more than one-third of that price for your deposit (unless the deposit also includes the cost of custom materials).

I cannot guarantee that this will avoid the question of the legality of Time and Materials Contracts, but we will not find out until this solution is tested in the courts.

Protecting & Preserving Fine Wine

2009-10-15T21:13:00.002-04:00

Here's a great guest post from Paul G. Cox, the Business Development Manager at Vigilant Woodworks on wine cellars:

If you have a growing collection of wine, it may be time to think about building a wine cellar or tasting/entertainment area in your home. Some time ago the custom wine room was unusual; today more and more wine lovers are learning about wine cellar construction or contracting the work out to those who know how to do the job properly.

Wine cellars are more than a dark, cool place to stock a collection of wine bottles. Today’s custom wine cellar is a controlled environment where humidity and temperature are regulated to allow wine to correctly age without damage to corks, labels or the wine itself.

There are two styles of wine cellars. One is an area that has been particularly made to store wine in the correct environment and the other is a stand-alone system that duplicates those conditions. A stand-alone wine cellar is not as effective as a custom-built version, but some people like the aesthetics of a small cooled refrigerator over a custom wine cellar. Those who do choose a custom cellar have three basic considerations for proper creation…

Temperature Control and Venting

A wine cellar room is used to hold and age the wine in the bottle rather than keeping it at a serving temperature. (A stand-alone wine fridge is excellent for carrying wine out of the cellar to hold at serving temperatures.) Aging wine is a balance of time, temperature and the chemical reactions that happen as a outcome of the two.

Wine should be matured in conditions ranging between 55 and 65 percent humidity and a solid 55 degrees Fahrenheit, within approximately one degree. Wine stored at higher temperatures will mature quicker and wine experiences chemical reactions at higher temperatures that devalue the notes of the wine over time.

In some areas of the country, property holders with basements often realize that conditions are right for basic wine storage, but seasonal temperature and humidity variations ought to be avoided. The perfect storage solution is a custom-built or DIY-construction wine cellar with climate and humidity control using a wine cellar cooling component to maintain the temperature at a stable 55 degrees.

These units come in a variety of sizes and the dimensions of your wine room will dictate what size you need to purchase. Never select a wine cellar cooler too small for your room; you most likely will never get a accurate, optimal storage temperature and the wine cooling system will become overtaxed trying to keep up.

Wine cooling units demand proper venting, and your wine cellar construction project requires either a hole in the wall to allow venting outdoors or enough vent space to flow warm air out of the room. Check the specs of your wine cooling unit; most require a venting space at least two times as big as the wine room space itself.

Electrical power is also an issue. Custom wine cellar builders recommend a devoted power source to run a wine cellar cooling system. Those who want to use a common power source frequently find the system overloading with blown fuses and other electrical problems.

Insulation and Vapor Barriers

The wine cooling system is only part of your climate control plan for a custom wine cellar; you also need a vapor barrier made of plastic sheeting used on the “hot” side of the wall. Some people wrap the interior of the wine cellar before inserting the insulation, leaving the plastic loose so that insulation can be placed between the studs in the wall. Cover the ceiling and the walls, or your vapor barrier will be incomplete. After the barrier is put in, the insulation comes next.

Good wine cellar building needs the right kind of insulation for your walls and ceiling. For instance, if you are building a 2x6 wall, R19 insulation is recommended, but if you have a smaller wall of 2x4, R13 may be your best bet. (The “R” designation represents the heat resistance of the insulation.) Ceilings require R30. Custom wine cellar builders should not install the insulation loose without packing the material into the sections, as this decreases the insulation’s effectiveness.

The next step is to install a kind of drywall called green board, which is moisture-resistant, making it a bit more expensive than regular drywall. Install an exterior-grade door to the wine cellar and your climate control plan is complete.

Lighting and UV Exposure Control

Wine is destroyed by UV exposure, which is why the bottles are normally constructed out of dark glass. Avoid putting in fluorescent bulbs in the wine cellar room, as they give off UV radiation. Control the brightness by using recessed lighting on a dimmer and avoid shining light straight on your wine bottles for long periods of time. Some wine cellar racks are made with compartments that hide bottles from the light which can help reduce exposure, but if your bottles are stowed in clear view, try to avoid the “spotlight” effect on your bottles.

Other Concerns

Nearly any kind of flooring can be used in your custom wine cellar. If your home is big enough for a wine tasting room to complement your cellar, you may wish to give them both an identical look, but by no means use carpet and rugs in the cellar area. They simply can’t hold up to the required humidity levels without surrendering to mold. Mold growth will wreck your wine, as can any powerful odor from chemicals or cheeses. A wine cellar should be used only to hold wine; keep food in a separate area.

Constantly examine the temperature and humidity in your wine cellar with an external sensor or gauge. By no means guess that the wine cooling system will always function accurately. A quick glimpse at the external gauge can offer you early notice if the wine cooling unit is having difficulties, or if the unit is showing a wrong readout because of a bad sensor or other technical troubles.

Constructing a custom wine cellar room may require some attention to the design demands of correct wine storage, however once properly built, you may realize that your collection grows quickly; it’s simple to invest more money in wine when you know it will be held safely for maximum delight.

About Vigilant

Vigilant is a premier design/build firm for custom and specialty cabinetry and millwork, specializing in wine cellars and wine storage and display for the home and commercial markets. Check out our extensive educational resources focused on building a wine cellar on our web site, www.vigilantinc.com.

Stylish Solar Roof Panels-A New Product

2009-09-04T09:00:00.000-04:00

Check out these solar roof panels that look like traditional roofing tiles:

http://www.solarfeeds.com/energy-boom/8756-stylish-roof-solar-panels-are-coming.html

Five Excellent Tips to Get Your Home Ready for Fall

2009-09-03T00:05:00.001-04:00

All of these tips are quite doable and environmentally friendly.

http://www.managemyhome.com/mmh/authored/articles/5+Tips+for+the+Dog+Days+of+Summer?sid=twitter

Preventing Fire in Your Home

2009-08-21T09:00:00.000-04:00

An important post on preventing fire in your home:

http://www.managemyhome.com/mmh/authored/articles/Preventing+Fire+in+Your+Home?sid=twitter

This article provides a great public service.

13 Top Bathroom Remodel Trends

2009-08-21T00:14:00.001-04:00

http://realestate.msn.com/article.aspx?cp-documentid=13108041

This is a great article for contractors and homeowners alike.

Home-Energy Plan Spreads Out Costs

2009-08-20T10:18:00.001-04:00

Why can't Massachusetts do this?

http://online.wsj.com/article/SB125064722656442071.html

I know a contractor who has started a business doing energy audits and I am going to ask him to guest blog. Now we just need local loan programs to defray the costs of doing energy-saving retrofits. At the end of the day, the homeowner is saving money by improving the environment, the contractors are getting much-needed work, and everybody benefits.

Five Misconceptions About Home Energy Performance

2009-08-19T11:58:00.002-04:00

I really like this post about the latest options in green products, because it points out that one should educate oneself before "jumping on the bandwagon" when choosing green materials.

http://earth2tech.com/2009/08/13/top-5-misconceptions-about-home-energy-performance/#more-38989

Remodeling Magazine's article on Energy Retrofitting.

2009-08-01T16:26:00.002-04:00

Part of dealing with the difficult economy is considering whether it is time to focus on new areas of practice or developments in construction. This article by Leah Thayer suggests that retrofitting houses with energy efficient improvements can benefit both contractors and homeowners alike.

In fact, I recently met a contractor who had started a new business doing energy audits and making recommendations. I have said frequently that one way to deal with the recession is to take the time to learn a new skill or work on a new area for your business.

Energy saving measures seem full of opportunity. There are many rebates available for homeowners to implement them, so this can be a win-win for homeowner and contractor alike.

http://www.remodeling.hw.net/blogs/postdetails.aspx?BlogId=lthayer_blog&PostId=88266

Do Homeowners Need an Advocate

2009-07-22T23:29:00.001-04:00

http://users.homepros.com/content/blog/656-3

An informative and useful post from HomePros.

What the New Home Buyer Wants-From BuilderOnline

2009-06-21T22:49:00.007-04:00

Even as we worry about today, researchers, community planners, and pollsters are probing consumer demand to predict what they will want tomorrow and the definitive answer from those presenting their findings at the Pacific Coast Builders Show is something different.
The current economic situation has triggered a shift in people’s values from an era of indulgence to one of responsibility, trend tracker J. Walker Smith of Yankelovich said Thursday morning.
That translates to the home-buying consumer as a desire for homes that fit but don’t exceed space needs, are greener, and that are part of a community. It doesn’t mean that buyers are dour, though, he said. Instead, it means the opposite, because the more anxious we get about the economy, the more we look for the bright side of things, according to Smith.
It’s up to home builders to tap into those traits to find a market. “They (builders) have got to be the the voice of optimism for consumers,” Smith said.
Buyers are also looking for homes in a walkable environment with most of their daily needs met in a small footprint. That setting could be urban setting or “suburban-urban," which would be a new development that's not within an urban core, but does include some of the characteristics of a city in a planned community. “We have structurally overbuilt the wrong products in the wrong locations, delivering what the market doesn’t want,” said Christopher Leinberger, a land strategist, developer, and author of “The Option of Urbanism: Investing in a New American Dream."
Leinberger said he thinks there’s pent-up demand for walkable urban product, but concedes the industry hasn’t solved the difficult equation of building them. The infrastructure is costly, he acknowledged, but the final product does command higher prices.
In terrms of the suburban-urban model, master plan communities with urban touches in the form of town centers with grocery stores, restaurants, and retail stores nearby have boosted sales in Newland Communities’ projects as consumers look for convenience and bargains. “Consumers are adapting (to the new market),” said Malee Tobias of Newland Communities. “They are shopping even smarter than they ever did before.”
She also pointed to a new trend called “hiving," which means poeple are spending more time socializing within their community, with neighbors, and hosting events at home rather than driving distances for entertainment. “Entertaining at home is one thing they are not cutting back on,” Tobias said.

The Unrealized Value of Owning a Green High Performance Home.

2009-06-19T23:44:00.000-04:00

From Tony Marnella's Blog at http://tonymarnella.wordpress.com/.

I wrote back in January about the behind the scenes inspections and testing that the green high performance homes get that many don’t know about or if they do, don’t appreciate the intensity of them. Since we continue to hear about Buyers wanting the “Best Deal” or the “Best Value”, it occurred to me that the Value of these homes is also not being realized.

For instance, 100% of the homes we build here at Marnella Homes are built to the Earth Advantage/Energy Star “Gold” level. Our homes are extremely well sealed and with blow-in insulation achieve a very low leakage rating. Also, with our 95%+ HVAC systems, fully sealed ducting and all inside the home in conditioned space. Our home owners save on average $40 – $50 a month in our 1400 – 1600 sqft homes over a similiar sized code built home.

Home owners have been sold over the years all the features that builders put in and are told how great they are and sometimes even how many years the home owner will receive a payback from these features. What so many times doesn’t get either explained or truly appreciated by the home owner or buyer is the value of these features. We took on the venture of Green performance building with the “What’s in it for me” approach. Thinking just selling features to someone who doesn’t know much about the industry will tend to make their eyes glaze over. So, we have tried to show our home owners and buyers “what is in it for them”.

In the case of a monthly savings, this is a direct savings over what they would be paying for utilities at any other new code built home. Plus, even with many builders getting on the green built performance band wagon most are doing just the minimum to get their homes certified so, we are outperforming most builders in our area. This is money that can be for that massage every month, the manicure, dinner, a movie with the family, a ski lift ticket in the winter, etc. So, many things that these homes make easier to afford. Because, isn’t the old saying, “a penny saved is a penny earned” more relevant today than ever before in our life time?

Now that I have addressed the actual savings, let’s look at the added value. Using the $40 – $50 a month in savings, at today’s interest rates that is about $8,000 to $10,000 in additional value to the home. Of course, our lenders aren’t going to let you borrow more because we can show the energy savings, but wouldn’t it be great to know that you have built-in additional financial strength due to the lower monthly cost of home ownership? I do believe that some lenders will eventually see this value and want to work with builders like us once this resonates with them. However, I am not holding my breath for this to happen anytime soon.

Lastly, now that real estate has moved back to a more traditional style of ownership, I feel that the long term value that these homes offer is also important. Energy costs are going to continually rise so, in 5, 7, 10 years or so when we sell our homes doesn’t it seem that it will be a added value to your buyer that your home saves a considerable amount in monthly utility costs over the resale homes that will be on the market at the same time? I think it should now and most assuredly then.

So, buying a home isn’t just the countertops, the carpet and appliances. Sure those are the features that you can see, feel and touch, but don’t over look some of the most important features that truly create the “value” in your home. You can always change your carpet, appliances and countertops, but it tends to be a little harder to retrofit a high performance HVAC system inside your home in the conditioned space if you are replacing a traditional system it’s not very easy to go back and effectively caulk and seal up a home that is already completed.

Please share your comments. I would like to hear from you.

Renovation Junky

2009-06-13T12:41:00.000-04:00

Here's a fun, new site for renovation ideas and information: http://renovationjunky.com/

Building Products Top 100 List-53 Are Green Products

2009-06-11T19:54:00.000-04:00

http://www.ecohomemagazine.com/green-products/readers-top-requested-products-shine-spotlight-on-green.aspx

When Your Contractor Runs Out of Money

2009-06-04T00:13:00.003-04:00

I have gotten numerous calls over the last few weeks from homeowners whose contractors have run out of money. Either the contractors tell the homeowners that they are unable to continue, or warning signs occur. The contractor starts asking for payments ahead of the work, he presses you to sign new contracts or change orders for additional work, subcontractors start to complain that they aren't being paid, or he just disappears.

The homeowners are frantic and they ask me what to do. The contractor hasn't quit, but they are stuck.

First of all, I would recommend confronting your contractor and asking flat out if he or she is having cash flow issues. Contractors frequently apply funds to previous job, subs or suppliers, and in this economy, they are getting caught short. If the contractor is honest and tells you the truth, it may be worth your while to advance some money to the contractor or pay extra and ask for some extras. It may save you money and aggravation to pay your own contractor a little more to get the job done.

Second, do not just terminate or fire your contractor. If you do, you run the risk that your contractor may bring an action against your for breach of contract. Go back and read your contract and see if there are any clauses that address bases for terminating the contract.

Instead, write a demand letter to your contractor. In it, state that you are proposing a schedule for completion and payments to serve as an addendum to your contract. If the contractor does not agree to your proposed schedule or suggest one of his own, then you can state that he will be in breach, and you will "mitigate your damages" (reduce damages) by hiring another contractor to complete the job. That way, the contractor will be the one who is in breach.

A note to contractors: I represent contractors and construction companies and I am sympathetic to your situation in this economy. That said, it is better to be honest with owners and try to work things out then to disappear or keep asking for more money. Now is the time to fess up and ask for additional funds to complete the job. It may maintain the good will you have generated and result in more work from referrals in the future.

Solar Panels for Rent for Homeowners

2009-05-25T18:15:00.001-04:00

This was in yesterday's Boston Globe:

SUN FOR RENT

Boston Globe
It's an old energy problem with a new solution: After decades of facing prohibitively high costs to install solar panels, Massachusetts residents will be able to lease the panels for a tiny fraction of their upfront cost.
Beth Daley
May 24, 2009
-->
Sun for rent
State hopes affordable leases will make panels an electricity option for more homeowners
By Beth Daley, Globe Staff May 24, 2009
It's an old energy problem with a new solution: After decades of facing prohibitively high costs to install solar panels, Massachusetts residents will be able to lease the panels for a tiny fraction of their upfront cost.
Instead of paying $25,000 or more to buy solar panels, homeowners will have to shell out only about $1,000 to install the energy collecting devices on roofs. The companies involved in the leases say most homeowners will be able to recoup the initial cost within seven years through electricity savings - and then save money on future bills by locking in the rate they pay for the electricity generated by the leased panels.
The long-term leases - similar to how residents might contract for cable TV service - are now being offered through a private company, which will take advantage of federal and state subsidies to help lower costs.
"It's great from a green perspective but also from a straight economic argument," said Eric Friedman, a Newton homeowner and state environmental employee who just signed up to lease solar panels.
Governor Deval Patrick is hoping "solar as a service" will help the state reach an ambitious goal of getting 250 megawatts of solar power by 2017. Today, the state has 9.7 megawatts.
Unlike the sprawling Southwest and other sunny places, which can host giant solar parks to generate electricity, the crowded Bay State wants to build up its solar network on the rooftops of urban triple-deckers, big box stores, and suburban subdivisions.
Commercial buildings across the country have been able to finance solar panel lease deals in re cent years, but homeowners were often left out. The costs associated with financing such small projects just didn't make sense to banks.
But the available subsidies - and the high price of electricity here - make it possible for private companies to offer the lower-price option of leasing while still turning a profit.
A company called SunRun Inc., which has done similar business in California and Arizona, is the first company to enter the Massachusetts solar lease market for homes. It owns the solar panels and partners with local solar installers - in Massachusetts, Alteris Renewables and groSolar.
Here's how the program works: A homeowner calls one of the companies to assess the potential for solar at the home and install panels. A one-time, upfront fee of about $1,000 is charged, and the homeowner also is given an 18-year locked-in rate for energy the panels generate. That rate will be comparable to, or less than, what utilities charge, according to the companies involved. If the homeowner uses more energy than the panels produce, they then pay the utility its rate for the electricity.
A typical home getting about 62 percent of its electricity from solar might pay around $77 a month for the solar electricity - and maybe $46 more for electricity from the utility for a total of around $133, according to Alteris Renewables. If they were getting all their electricity from the utility, it might be $151, Alteris estimates.
"We did a lot of market research, and not surprisingly we learned the upfront cost [for solar panels] is too high for people," said Lynn Jurich, cofounder and president of SunRun.
Homeowners who sign up for the leasing program do not have to worry about upkeep of the solar panels: If a panel breaks, it is replaced at no extra charge. They are also freed of other details, such as tying the panels in to the electric grid or applying for the rebates and subsidies. The company - not the homeowner - gets the state and federal subsidies because it owns the panels.
The state subsidy program that helps make Massachusetts attractive territory for such lease arrangements is called Commonwealth Solar. It is offering $68 million in rebates over four years to residents, owners of commercial buildings, and communities. It gives back an average of 40 percent of the cost of solar panels to the purchaser.
Add to that a new federal tax break of up to 30 percent of the cost of the project - the previous federal incentive maxed out at $2,000 - and the price of solar comes down enough to be competitive with traditional utilities in Massachusetts.
The Bay State is not expected to have such generous rebates for long. Already, 716 Commonwealth Solar rebates have been awarded, amounting to more than $25.5 million, according to state officials. Of that, 587 are homes, 113 are commercial or industrial buildings, and 16 are public entities.
But the state hopes the flood of money now - along with other efforts to bring installers and solar manufacturers to the Bay State - will cement the industry in Massachusetts enough to drive competition and lower prices so such generous rebates are not as necessary in the future.
Without the subsidies, SunRun wouldn't be in Massachusetts, because solar is still more expensive than electricity from fossil fuels.
"The goal is to get enough competition to bring down that cost," said Ian Bowles, state secretary of energy and environmental affairs. He said other measures are helping, such as making it easier for homeowners to sell renewable energy they generate back into the grid, allowing utilities to own solar installations, and requiring long-term purchasing contracts with utilities to purchase renewable energy.
The state is also examining making solar a requirement for utilities and other electricity suppliers in the future.
Michael Durand, a spokesman for NStar, a large Massachusetts utility, said the company was supportive of any effort to help reach Patrick's solar goal. "Having a variety of options will be helpful in meeting that goal," he said.
For homeowners, there are some caveats. One, you need sun. The best place to put solar panels is on south-facing roofs that get direct sunlight. And rebates, final costs, and savings can vary based on energy use, how much sunlight you get, and competing electric rates.
One downside might be that panels' cost may come down in the future. Homeowners who move can transfer their solar agreement to the new homeowner, buy out the contract, or purchase the panels.
Still, state officials and solar advocates say the $1,000 or so investment makes sense even in a recession.
"Solar has a guaranteed return," said Adam Browning executive director of the San Francisco based Vote Solar Initiative, a nonprofit that works with states to improve policies to grow solar. "You tell me where else you can get this rate of return in this economic environment."
For Friedman, who is renovating his home as green as he can, his decision to have Alteris install solar panels made sense. Even with all the rebates and other incentives he is eligible for, it would have cost him around $11,500 to buy the panels. His $1,000 investment is expected to be paid back through lower electricity bills within four years.
Beth Daley can be reached at bdaley@globe.com.
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2009 The New York Times Company
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Build Green and Save

2009-05-06T23:03:00.000-04:00

Kim Hibbs interviews the author of Build Green and Save.

http://www.itsthecustom.com/

How to Hire a Home Contractor

2009-05-05T11:11:00.000-04:00

Here's a helpful post by Daniel Mackey Construction:

http://danielmackey.livejournal.com/5703.html

Construction Deal-A Blog with Excellent Home Construction Articles

2009-04-29T09:28:00.001-04:00

http://www.constructiondeal.com/blog/

Meadowview Construction Offers Great Advice for Contractors and Homeowners

2009-04-12T18:33:00.001-04:00

http://www.mvconstruction.com/index.htm

10 Things You Must Put in Your Next House

2009-03-29T12:30:00.001-04:00

This is a reprint from the Builder magazine website:

http://www.builderonline.com/products/10-things-you-must-put-in-your-new-house.aspx?page=1

From: BUILDER 2008
Posted on: December 15, 2008 8:44:00 AM
10 Things You Must Put in Your Next House
Add these features to boost the value of your homes with your buyers.

Americans love getting a deal, which might begin to explain why so many consumers flock to shopping malls on Black Friday. Of course, they aren't always ending up with a real bargain, but sometimes this doesn't matter. As long as an item or service has a high perceived value to people, there’s a good chance they’ll choose to buy it.

This concept can be applied to selling homes. Create high perceived value, and you stand a better chance of closing the deal with buyers. One way to do this is to offer high value at a low cost. If your cool-looking kitchen was inexpensive to build, but it looks like it cost tons of money to do, you’ve hit a home run for your business and your buyers.
With that in mind, here are 10 items to put in your next home to create real and perceived value for your buyers.

Radiant-heated bathroom floorsForget fancy water-filled tubes embedded in concrete. You can now buy simple mesh-and-wire mats that install fast and easy under ceramic tiles. They cost as low as $10 a square foot and come with a variety of thermostats. Put a toasty floor in your homes' bathrooms and watch your buyers melt.

Butcher block countertopsWood is the original solid surface. Used as an island or a bar, it holds nostalgic memories for older buyers and offers a fresh natural look for younger customers. It traditionally comes in maple, but butcher block is available in other species such as cherry and birch. An 8-foot-long top measuring 1.5 inches thick and 25 inches wide can be had for as little as $189.

Glass tilesYes, glass is cool. And yes, it’s pricey. But used sparingly as a kitchen or bath backsplash, glass can’t be beat. It reflects light, shimmers with color, and is virtually maintenance-free. If you shop carefully, you can buy it for as little as $7 a square foot.

Dual flush toiletOne can only imagine the perceived value of a dual-flush toilet installed in a powder room, which will cost about $250. That is about $100 more than a standard toilet, but it can save a family of four up to 6,000 gallons of water per year.

Low-flow showerheadsThere’s a chance you’ve used a new low-flow showerhead and don’t even know it. And that’s the point. These units use air to deliver the same robust performance as a traditional showerhead, but with a flow rate of 1 gallon per minute as opposed to 3.5 gallons a minute.

On-demand water heaterDepending on your climate, an on-demand (or tankless) water heater is an excellent choice. It does cost more, but instead of heating water at a constant temperature 24 hours a day, the energy-saving unit only activates when there is a need. Plus, it installs on a wall (inside or outside) and frees up space, which is especially important in the smaller, lower-priced homes that buyers appear to prefer in the current economy.

Water re-circulatorIf a tankless water heater is a little too edgy (and costly), you can still give your home buyers instant hot water by using a high-efficiency conventional heater and a water re-circulator. With the push of a button, the device circulates ambient-temperature water from the line so hot water is instant and nothing is wasted down the drain.

Folding patio-doorIn 2007, four out of the most popular 10 products among BUILDER readers were folding patio-door systems. Here's why: When closed, these doors look like any other, but they fold up like an accordion to provide access to the great outdoors. Full-wall installations are pricey, but you can reduce cost with a two-panel system.

Central vacuumA central vacuum cleaner is a built-in system consisting of a power unit, collection canister, and hose. Connected by special pipes installed within interior walls, the system collects dust and deposits it in the centrally located canister. Five times more powerful than an upright, it’s quiet and efficient. Plus, an entry-level system can cost as little as $800.

Excellent insulation Insulation isn’t sexy, but when it’s 95 degrees in the summer or the mercury dips below freezing in the winter, your buyers will thank you for this, even if they didn't see the perceived or real value when they first signed the sales contract. Forget the entry-level insulation, and go for something that will really stuff the wall and the roof. While you’re at it, don’t forget the attic.

Nigel Maynard is senior editor, products, at BUILDER magazine.

Moving Away from the Billable Hour in Construction Law

2009-03-04T09:00:00.000-05:00

I am going to tell you a secret. Most lawyers hate the billable hour. It is hard for us to keep track of our time, even with all of the latest software and technology. Most clients do not understand why some activities take so much of our time. They don't understand the value we provide. That is why more and more lawyers are trying to change the way they charge and use flat fees and other means to bill their clients.

The other day, I had an epiphany. As a lawyer who works mostly in the construction industry, I should bill like contractors. I could prepare a proposal and scope of the work, and notify the client in advance what I would charge. If things changed dramatically, we would execute a written change order that would be signed by the parties. Everyone would be on the same page, and there would be no surprises.

This is easier to do in some areas than others. I pretty much know how much time it takes me to draft a contract, write a demand letter or file a mechanic's lien. The trickiest area is in litigation. The minute you file suit, you have no control over the process. The other side can make it quick, or drag the lawsuit out and make it incredibly time consuming and expensive.

However, I am doing research and trying to figure it out. I have never been comfortable with the fact that the first time I write a motion, it will take much longer and cost the client more money than the tenth time I write it. The billable hour does not encourage efficiency, and I am very efficient. I do not want my clients to be afraid to call me because they believe it will be costing them extra money to speak with me. Those conversations can frequently prevent problems and save money in the long run. So, look for some changes in the way I practice. They are coming soon.

Why You Need a Good Renovation Contract

2009-03-03T23:25:00.003-05:00

I just had a great experience as a lawyer last week. A client called and he was not unhappy. In fact, he was about to start a home renovation project, and was really looking forward to it. He found a contractor he liked, and he and the contractor were working together collaboratively. A colleague suggested to him that he come see me to draft their contract. It certainly made sense.

For less than 1/2% of the value of the project, we hammered out a contract that spelled out the understanding of the parties. It is in compliance with local law, so the contractor is protected. In fact, the homeowner told me that the contractor was willing to chip in and help pay for my fee. Discussing the contract terms helped the homeowner further define the scope of the project and a realistic payment schedule.

We discussed what would happen if change orders were necessary and how they would be handled. The homeowner decided what would constitute an unreasonable delay. Problems were anticipated and dealt with preemptively.

This experience was in huge contrast to the usual scenario in my practice. I receive a call from a desperate contractor or homeowner and things are going terribly wrong. It is usually too late to get the project back on course, and on some level, everybody loses. That is why I started this blog; to serve as preventative medicine, and to encourage more people to take my client's approach from last week. This may be the best money he has spent so far to ensure a successful home improvement project.

Home Owner/Contractor Patterns That Raise Red Flags

2009-02-15T15:06:00.004-05:00

One of the advantages of having handled numerous home contractor/homeowner disputes is that I have a global view of the problems that arise. Homeowners and contractors are frequently shocked when something goes wrong during a renovation project, but if they are made aware of the "signs," the problems may be preventable.

1. The contractor who tells you that you do not need a contract. Sure, things are great at the beginning, but working without a contract can be a recipe for disaster. The purpose of a contract is to memorialize a "meeting of the minds." As one arbitrator said to me, "the best kind of contract is put on the shelf once it is drafted and left to collect dust."

2. The homeowner who is overly preoccupied with details and processes. Homeowners should be actively involved in the renovation process. However, if they have difficulty making up their minds over the smallest issues, or insist on controlling minute aspects of the work, the project could be a nightmare. They will never be happy, and will greatly reduce the profitability of the job. Watch out for micro-managers.

3. The contractor who keeps asking for money. If the contractor is continually asking for money ahead of the work, that is a sign that he may be in trouble. Contractors can get in over their heads and use money from current jobs to pay off prior ones. In addition, your contractor may have a substance abuse problem. Make sure that suppliers and subs are getting paid in a timely fashion. Have a clear contract that spells out payments as phases of the work are completed.

4. Homeowners who keep asking for extras. It's fine to do something just to be nice, but a contractor who continuously does extras to please the homeowners may find himself in a difficult position. Homeowners may take advantage and again, profitability will be reduced.

5. The contractor who does a lot of extras for the homeowners, and then comes back with another bill. I have heard contractors say so many times, "did they really think I was doing this for free?" Of course the simple answer is that all change orders must be in writing! If you are not sure if something is included, ask.

6. The contractor who does not spell out which materials will be used. I have seen many situations where contractors cut corners. Serious corners, such as putting up pine siding on an addition when the rest of the house is cedar. Make sure you know what you are getting so there are no misunderstanding.

7. The contractor/homeowner who is a bully. This goes both ways. If something is making you uncomfortable, listen to your instincts. A renovation project should be collaborative. If you are being bullied, take back control.

8. The contractor whose price is much lower than the other quotes. You get what you pay for. If the price is significantly lower, it is probably not a good thing. The contractor will discover that his bid is too low and be tempted to cut corners or use cheap materials.

9. The homeowner who overextends herself. I have to say, I am often shocked by homeowners who do not maintain some money on reserve when planning an addition or home improvement. Homeowners are often shocked projects run over budget, but it is quite normal for there to be change orders that result in extra expenditures. Contractors should make sure that their clients understand that an extra ten percent should be budgeted for the job. In addition, they should be wary of homeowners who are living so close to the bone that they run out of money before the project is finished.

10. The contractor who takes on more work than he can handle. Beware of contractors who are running a number of projects at once. In addition, make sure that yours is not the biggest job that the contractor has ever handled. You want to know from references that the contractor has handled comparable projects previously. In addition, if they do take on more than one job at a time, the contract should spell out the hours the workers will spend at the job, and how many days per week they will be on site. The last thing you need is a contractor who disappears for weeks at a time.

These are some of the patterns to watch out for over the course of a renovation project. If something does not seem right, do not ignore your instincts. Address the issue immediately before major problems develop.

BAGB Economic Forecast Dinner

2009-01-30T09:38:00.002-05:00

Last night I attended the Builders Association of Greater Boston economic forecast dinner. The speakers were excellent, and they provided some encouraging news for Massachusetts and the nation. To summarize, their view is that the first quarter of 2009 is going to be the worst, and then things are going to gradually get better. In their opinion, we all need to try to funnel money into the economy. Those who want to buy homes should start doing it now. Mortgage rates are low, and housing prices have dropped. Those waiting for prices to drop even lower are part of the reason that we are in such a bad situation right now. There are efforts being made to help protect buyers by reimbursing them if prices were to drop even lower.

So, that supports my contention that it is a good time to renovate. You will be helping the economy and availing yourself of the good deals out there. To my last comment: There will still be bad contractors out there, but I do believe that those who are riding through this storm do tend to be the better one. It is not a guarantee, but I was in a room full of all kinds of players in the industry last night. Most of them are smart, hard-working people. Just like you.

A Good Time to Start a Home Renovation

2009-01-29T13:05:00.002-05:00

I imagine that some of you will say it's crazy to start a home renovation project in this economy. However, there are many reasons to consider doing one now, and here are a few:

1. Contractors are no longer busy. The days are gone when contractors could afford to disappear from your project because they were working on others. It is in their best interest to do a good job and keep the homeowner happy. Now, more than ever.

2. The bad contractors are closing shop. I know so many contractors who are going out of business. This is very sad, but it is also serving to retain the good ones who have treated their clients well and maintained a good reputation. It is more likely that someone who has stayed in business is a "good" contractor. In my mind, that means there is a greater likelihood of a successful renovation project.

3. You will get a fair price. See #1 above.

4. The homeowner might have more time to devote to the project. My work is not as busy, and most people I know have more time for other things. It is better if the homeowners can pay attention (not micro-manage!) their project.

5. Mortgage rates are low. I am looking into refinancing. It might be a good time to refinance and take some money out to do a renovation.

6. There are sales on everything. You can probably negotiate for better pricing for materials since everything is on sale these days and everyone is hurting.

7. Think green. The options for green building just keep increasing. Educate yourself and choose construction methods and materials that will help the environment and reduce costs down the road.

8. Do your bit for the economy. If you can afford it, why not try to give people work?

9. Increase the value of your real estate. This is always a good reason to renovate, as long as you do not greatly exceed comparable values on your street. Speak to a real estate broker about how to add value to your home.

6. There is no time like the present. I know people who have put off renovations for so long that they lost out on the opportunity to enjoy them. If you can afford it, why not do it know? Kids grow up pretty quickly and then leave home, so give your family the benefit of that family room now.

Budgeting for a Home Renovation Project

2009-01-25T20:30:00.001-05:00

Like most construction lawyers, I am spending a lot of time thinking about the economy and how to safeguard my practice in these tough times. It occurred to me that now, more than ever, homeowners need to be realistic when planning a home improvement project. I have been absolutely astounded by the projects undertaken by homeowners that are well beyond their means, or cause them to live so close to the bone that there is no room for extra expense. By the time they come to see me, their situation is truly disastrous. Even in home renovations that run smoothly, it is not unreasonable to allow a cushion of ten percent for unexpected change orders. This is not the contractor's fault. One never knows what one will find once excavation begins or walls are demolished. Any sensible contractor will include a clause in his contract that allows for a change order when unexpected conditions are encountered. I jokingly tell people that I will not even change a lightbulb in my house for fear that this will steamroll into a series of additional repairs, but how many people do you know who start out changing the bathroom sink and end up doing a complete remodel? So, first ask yourself: do I really need to undertake this project? If so, which parts are needs, and which are "wants?" Will this add to the value of my home? Perhaps this sounds crazy, but if your budget is $80,000.00, I would plan on a renovation that costs no more than $50,000.00. Then, if something goes wrong, you will have a reserve for repairs and possibly replacement of materials. I am not exaggerating when I say that I have had clients on the verge of losing their homes because they overextended themselves. I should also add that this includes clients who have spent $26,000.00 on an addition where the repairs forced them to dig into retirement funds, to clients who have budgeted for one million and ended up spending two million. Although this may come off as a bit "preachy," there is enough to worry about when remodeling that you should not put yourself in the position where you cannot sleep at night because of the expense. Speak honestly with your contractor about your budget and look for reasonable ways to cut costs. It's better to have the highest quality windows and cut back on the size of your addition than to use cheap materials. Then, if you do have to address unforseen issues or end up bringing a claim, it will not be a disaster.

Insurance and Construction Projects

2009-01-23T22:15:00.002-05:00

I have been wanting to post about insurance policies and construction projects for quite some time, as there is a great deal of confusion about what kinds of policies are necessary and which items are covered.

Mark Tarpey of Tarpey Insurance Group provided me with this guest posting:

For New Construction, the Purchase and Sales Agreement must be reviewed to determine who is providing the insurance during the course of construction. I have seen contracts that require the builder to carry it and some other contracts require the homeowner to provide the coverage.

The builder will provide the coverage under a Builder’s Risk Policy. The homeowner can purchase a standard homeowner’s policy with an endorsement to cover the theft of materials( this is excluded under a regular homeowner’s policy). If the homeowner owns the lot during the construction phase, they should require the builder to list them as an additional insured under the Builder’s general liability policy.

During a remodeling project, there are two scenarios that need to be addressed. If the homeowner is staying in the house during construction, then they will need to increase their current homeowner’s policy to adequately reflect the new replacement cost of the home. If the homeowner is moving out during the renovation period, they will need to contact their agent to discuss the options available. Typically, the homeowner’s policy is cancelled and a new policy is written to cover the property during the renovation phase and the homeowner’s policy is re-written when they move back in.

In regard to what kind of insurance a contractor should have, the homeowner should require the following:

General Liability - $1,000,000 each occurrence, $2,000,000 general aggregate and $2,000,000 products/completed operations aggregate

Workers’ Compensation- $100,000/500,000/100,000 and they should require all subcontractors to have coverage as well

If a contractor does not carry worker’s compensation coverage, the injured employee could sue the homeowner/property owner for failing to provide a safe work place. I have seen claims against the property owner that can be very significant and could exceed insurance limits and the owner could be responsible for the difference.

General Liability covers bodily injury and property damage arising out of the negligence of the contractor. Each policy is different and can have several endorsements that exclude specific types of claims. The general liability is not suppose to cover the poor workmanship of the contractor but it is suppose to cover the resulting bodily injury or property damage( this is very basic information and can be very misleading).

The homeowner’s policy covers the dwelling, any detached structures( up to a sublimit), personal property, additional living expense( a hotel room if you have a fire and can’t stay in the house) and personal liability. There are so many different types of enhancement endorsements that can broaden the coverage( sewer or drains backup, earthquake, jewelry coverage).

Tarpey Insurance Group is a family owned and operated independent insurance agency with 4 locations throughout Greater Boston. The agency consists of 25 employees with 6 Tarpey family members actively managing the business. We represent 15 insurance companies to place your business. The agency has two divisions – Personal Insurance which handles auto, home, watercraft and personal umbrella and Commercial which insures all types of businesses including contractors, professional offices, manufacturers, distributors and building owners.

Please visit www.Tarpeyinsurance.com for additional information or contact us at 1-888-827-7397.

Contractors-What to do in a Bad Economy

2008-12-13T10:24:00.002-05:00

The construction industry is in a terrible state right now, and I know many contractors who are suffering the worst downturn in work in their careers. Now, more than ever, contractors need to protect themselves when they undertake projects and make sure they are operating their businesses correctly.

In my practice I see many distraught homeowners who want to file claims against contractors. They are now willing to fight over less and less money and their general level of anxiety has risen.

The best contractors recognize that maintaining good client relations is the best way to stay out of trouble, ensure future referrals, and stay in business. Particularly in this economy, this is not the time to ignore phone calls, disappear from the job, hit consumers with unexpected change orders and extra bills and cut corners. Many builders do not realize that their best source of future business is their current clients.

So, keep the following in mind:

1. Keep the lines of communication open at all times. Make sure you manage your clients' expectations. Let them know that the project may go over budget and that they should allocate for that. Address problems early before they accelerate.

2. Make sure you have a good contract that protects you. Include a provision that allows you to collect your attorney's fees if you have to sue a client for payment. Most of the contractors I meet with do not have this clause in their contracts. They are shocked when it costs them two-thirds of their payment in legal fees when they have to sue a client for their fees.

3. Follow the law. Would you drive a car without a license? There are so many contractors who do not have the proper licenses for performing their work. Do this at your peril. It will catch up with you at some point. In addition, make sure you know the requirements of the building code for your state. Code violations provide excellent evidence against you in a lawsuit. I know of a contractor who sued a client for a $7000.00 payment who ended up with a $130,000.00 judgment against him because he did not follow the law.

4. If you run into a dispute with a client, and you have committed a violation of some sort, resolve your disagreement quickly and protect yourself for next time. You may have to "eat" your fee in order to keep from suffering further consequences.

When business is slow, it is time to review your contract, brush up on the building code (Massachusetts recently published the 7th edition of its code), check the status of your licenses, and check in with former and current clients. If you do your housekeeping now, you will greatly reduce your worries when business is booming and you are too busy to pay attention to these important tasks.

Warranties When the Contractor Abandons the Job

2008-12-02T21:56:00.000-05:00

About a month ago, a woman walked into my office, and she said that her contractor told her that he would not honor his warranty unless she gave him a good reference. It seems like, of late, that homeowners are extremely concerned about the warranties provided by their contractors. What if something fails over time? Who is going to address problems that arise?

Let's face it. Good contractors honor their warranties. In fact, for you contractors out there, here's a tip: warranty your workmanship for life. A contractor I know says, why not? I have complete faith in my workmanship. There is no reason not to give a lifetime warranty

When a contractor abandons the job, it is unrealistic to expect that he or she will honor his warranty. It is not unusual for problems to develop as months pass. That is why it is important not to bring a claim before all of the damages are discovered. When claims are filed initially, it is important to factor in the value of the warranty and the likelihood of something going wrong when making a demand.

Once the relationship between the parties has broken down, the homeowner should assume that he has lost any warranty provided by the contractor other than those that are passed on from the manufacturer. The homeowner should do his best to reduce his damages by documenting the issues and then preventing further losses (if water is leaking into the house, you can't allow it to continue leaking and create a more extreme problem in order to pursue further damages against the contractor).

If you are extremely concerned, it may be worthwhile to have an independent home inspector come in and review the work. In my experience, this usually increases the estimated amount of damages and is worth the expense.

Rather than being worried about whether warranties will be honored, think about whether you would want your contractor back if he has abandoned the job. Factor the price of future repairs into a potential settlement figure, and then move in. It is not worth it to stay in a bad relationship where you will doubt the workmanship ofrepairs done at your home.

When the Contractor Files for Bankruptcy

2008-12-02T21:13:00.000-05:00

As the economy has gotten worse, I receive phone calls from homeowners asking: what do I do if my contractor files for bankruptcy? First, the disclaimer. I am not a bankruptcy lawyer. The bankruptcy law changed within the last few years, and lawyers are required to issue a number of disclaimers before offering bankruptcy advice. So, I am not going to tell you how to file for bankruptcy, or which debts are dischargeable in bankruptcy and which are not.

If your contractor states that he is on the verge of bankruptcy, understand that you may never recover even if you can bring a claim against him. That is why it is important to take one's ability to collect into account prior to filing a lawsuit. In Massachusetts, tshere is a fund called the Guaranty Fund that will pay up to $10,000.00 of your damages if you obtain a judgment and your contractor files for bankruptcy. I do not know if other states have similar funds. In any event, I always say that the easiest thing for a contractor to give you is his time and labor. Keep that in mind when you are trying to resolve a dispute.

Building Confidence, LLC

2008-11-17T14:20:00.002-05:00

I stated when I started this blog that I would have been able to help prevent many of the problems that contractors and homeowners experience when going through a construction project. I am now making my services available to support the goal of having a stress-free process.

I am pleased to announce the launch of my new business, Building Confidence, LLC www.buildingconfidence-llc.com. I am offering consulting services to homeowners and contractors who are about to embark on new construction or renovation projects. For a flat fee, I will write your contract and work with local lawyers to make sure it protects your interests and is in compliance with state law. I will then be available by telephone and e-mail to consult with you throughout your project and advise you regarding any issues that arise. I can be reached at 617-467-3073 or ajg@buildingconfidence-llc.com. Please look at my website to learn more about my new construction consulting business.

I Want to Sue my Builder/Contractor/the Homeowner

2008-11-11T23:34:00.000-05:00

One of the interesting aspects of writing this blog is I get to see the keywords that people use to find me. My audience frequently searches the title above to land at my blog. I have posted previously ("Think Before You Sue"), but I think it is tremendously important in the current economy to re-visit this issue.

Lawsuits do not usually end well. I think the media has given us an unrealistic picture of the rare windfalls that can occur after going through a court proceeding. So many clients have told me they want "justice." I try to point out that a group of twelve strangers or a judge are not necessarily going to provide a just result. So many factors influence the behavior of the decision-makers that it is not realistic to think that one is going to achieve a storybook verdict.

At the end of a lawsuit, if the parties do not settle, one side receives a judgment. Frequently that is only the beginning. Enforcing the judgment and collecting on it is a whole other matter. Most people do not have readily accessible funds to pay a judgment. Even if they hold a valuable asset, one still has to force the sale of the asset if one hopes to collect.

So, rather than end this post on a discouraging note, I want to remind my readers of the following:

1. Start all construction projects with a good contract. This document spells out the understanding and intentions of the parties. A wonderful arbitrator I arbitrated with last week said ideally, the contract should sit on a shelf and collect dust once it has achieved its purpose.

2. Maintain good communication throughout the project. If problems arise, deal with them quickly and be honest. It is not surprising to me when I meet great contractors who tell me they have never been sued. Great contractors are usually great communicators as well.

3. Be realistic. Many of the disputes that I see occur because parties have unrealistic expectations. There are some people who simply expect perfection, and that just does not occur. When I was buying my house, my cousin said, "When you look at a house, you should keep one eye closed." I think there is a great deal of truth to that statement.

4. Try to resolve your disputes. Settlements are always better. Yes, I mean always. Statistics have shown that people tend to comply more with settlements than judgments. In addition, a settlement is something that you have control over.

After all, isn't justice when you have a say in the result?

Thoughts on Green Building

2008-11-01T11:08:00.000-04:00

Although the concept of Green Construction has been around for quite some time, there seems to have been more discussion recently about using the technology to reduce heating costs, benefit the environment and as a marketing angle. I belong to a builder's association, and there have been more courses offered in green construction and LEEDS certification. I am not going to pretend to be an expert in this area, but I am trying to learn more about the "green" movement and how I can offer advice to my clients in this arena. For example, I recently learned about LEEDS-AP certification which a limited number of lawyers in Massachusetts have obtained. I am pursuing the possiblity of taking this class through the Green Builders Council http://www.usgbc.org/.

So, what does this mean for you?

For the contractor, it is important to stay state of the art.

Educate yourself about options and take continuing education classes.
Learn about the pros and cons of green products and determine which ones to offer to your clients.
Include clauses in your contracts when introducing green options and be wary of making claims or promises about results.
Familiarize yourself with government rebates that could benefit your clients.
Pay attention to what may happen with the next administration.
Distinguish yourself by marketing and taking advantage of the green movement by advertising real credentials, knowledge and experience.

For the homeowner:

Don't get caught up in green for green's sake.
Educate yourself about the true benefits of the green products and processes that you are considering.
Learn about government programs and rebates that may benefit you.
Consider the true costs of going green.
Allow your values to play a part in your decisions.
Carefully research contractor's or builder's claims and make sure they are accurate and valid.

The green movement is both exciting and daunting. It seems that everyone is hopping on the green train and none of us want to be left behind. At the same time, this area is ripe with the potential for fraud, false claims, and over-enthusiastic hype. It is important for both builders and homeowners to cut through the information that is being presented and determine which products and processes will provide real benefits in terms of cost savings and contributions to preserving our environment. I look forward to our learning together.

Getting Rid of a Mechanic's Lien

2008-09-13T10:35:00.000-04:00

Before I say anything, I want to remind homeowners that mechanic's lien law is state specific. I only know how they work in Massachusetts. That said, there are usually similarities between states, and this will give you some idea of how the process works.

It is not easy to follow the mechanic's lien process properly. For contractors, it can be complicated, and it is very easy to make a mistake. Many attorneys do not get it right. So, there are opportunities along the way for a lien to be subject to being dissolved. The problem is, they do not self-extinguish. A document has to be filed with the registry of deeds to put the public on notice that the lien is no longer valid.

The simplest way to dissolve a lien is by agreement. The parties come up with a way to resolve their dispute, and a Notice of Dissolution is filed by the contractor.

The next "easiest" is for the homeowner to post a bond. The reason I put "easiest" in quotes is because this can be quite expensive. So, although the process is easy, the price is not. The fee I have encountered is about 10% of the value of the lien.

If the lien is not perfected, that is it has not been filed properly, or the contractor has failed to file suit on time, or file an attested copy of the complaint with the registry of deeds, then the homeowner can file an action in court to have the lien removed.

Here's the process in Massachusetts:

Chapter 254: Section 15A. Application to court for order ruling on or discharging lien

Section 15A. If any person in interest, including but not limited to an owner, contractor, or mortgage holder, claims (a) that any person who has provided labor or materials or has agreed to provide funding, financing or payment for labor or materials, refuses to continue to provide such funding, financing or payments of labor or materials solely because of the filing or recording of a notice of contract pursuant to section two or a statement of claim referencing a lien under section one, or (b) it appears from the notice of contract or a statement of account that the claimant has no valid lien by reason of the character of, or the contract for, the labor or materials or rental equipment, appliances or tools furnished and for which a lien is claimed, or (c) that a notice or other instrument has not been filed or recorded in accordance with the applicable provisions of this chapter, or (d) that for any other reason a claimed lien is invalid by reason of failure to comply with any provision of this chapter, or (e) that any party’s rights are foreclosed by a judgment or release, or (f) that any party wrongfully refuses to execute a notice of completion as required by section two A or improperly files or records a notice of termination under section two B, such person may apply to the superior court for the county where such land lies or in the district court in the judicial district where such land lies, for an order (i) ruling on the matter involved or (ii) summarily discharging of record the alleged lien or notice as the case may be. The holder of any recorded mortgage upon the affected property shall receive notice of and be entitled to appear and be heard in any proceeding brought under this section. An order of notice to appear and show cause why the relief demanded in the complaint should not be granted shall be served upon the necessary parties no later than seven days prior to the date of the scheduled hearing. If the necessary parties cannot be found, such service may be made as the court shall direct. The application shall be made upon a verified complaint accompanied by other written proof of the facts upon which the application is made. Upon granting or denying the application, the court shall enter a final judgment on the matter involved or expeditiously order such further proceedings as are just. Chapter 254: Section 15A. Application to court for order ruling on or discharging lien

So, the homeowner has to file a lawsuit, notify the mortgage holder and serve all the parties, and attend a hearing. This is not an inexpensive process, but may be necessary if the homeowner is trying to refinance, obtain a mortgage or sell the property.

It is always less expensive to try to resolve disputes in order to remove a lien from one's property. However, when necessary, there are other options that will obtain the same result.

When Your Contractor is a Bully

2008-08-21T23:00:00.000-04:00

Before I start this post, I want to remind my readers that I represent both contractors and homeowners and have seen good and bad on both sides. I can certainly write the next post about nightmare homeowners, but this one focuses on a phenomenon that I have seen recently.

I have had more than one client come to me within the last few months who has been bullied by his contractor with threats of walking off the job, failing to honor warranties, and pushing homeowners into changing the scope of their projects.

The homeowners feel powerless and do not know how to handle the situation. So, here is some advice for dealing with the difficult contractor:

1. Ask yourself what if? A home renovation project can be unpleasant, invasive and overwhelming, but it should not be threatening. If your contractor is not honoring your wishes, something is going wrong. So, the first thing to do is ask yourself, what if the contractor walks off the job? Files a lien on my property? Refuses to honor the warranty?

a. Remember that the market is bad. Many contractors are out of work right now, and would be thrilled to take over your job. It is a buyers market. You are the customer. The contractor should be nice to you.

b. Start calling other contractors and get quotes to complete NOW. I have given this advice to homeowners on numerous occasions, and they frequently do not do this. It is time consuming and a pain, but knowledge is power. The more you know about your alternatives, the better off you are.

c. Name the behavior. This is a tactic frequently used in negotiations. If someone is acting like a bully, call them on it. Point out that the person is bullying you and tell him that you will no longer accept it. All change orders must be in writing and approved by you. A schedule for completion is required.

d. Learn the law. More than one state has a home improvement contractor law. Know your rights. Inform the contractor what your rights are.

e. Hire an advocate. Let's face it. Some of us can be great advocates for others in our work, or high powered executives, but when it comes to our homes, we act completely differently. There are all kinds of professionals who are ready to come in and intervene on your behalf. There are now home contracting consultants and attorneys who will negotiate with your contractor for you. Even a trusted friend can play that role if you are not comfortable. It is possible that the contractor may prefer dealing with that person rather than interacting with you.

f. Be realistic. A homeowner recently told me her contractor told her that he would not honor his warranty unless she gave him a good reference. Aside from the fact that you would be foisting that contractor on another unsuspecting homeowner, do you really think this person will be responsive when something breaks? Do you want to be the victim of blackmail? Can you trust this person to do a good job? You might be better off cutting your losses and terminating the relationship (make sure you do not breach your contract) rather than continuing with someone who treats you like that.

g. Look for signs. Finally, pay attention to your instincts and notice the red flags. Every single homeowner I have spoken to who has a "bully" contractor has told me that the signs were there from the beginning. The contractors were evasive, pushy, insistent, instilling urgency into the process, etc. If you sense any of this from your contractor, bring it out into the open. If the contractor is not responsive, run run in the opposite direction, and do not hire that person.

Life is too short to spend months dealing with a bully.

AAA vs. Home Improvement Contractor Arbitration Program

2008-07-31T02:50:00.000-04:00

At one point in time, I would guess that if a contract contained an arbitration clause, it most likely would have included an agreement to use the American Arbitration Association (AAA) for the arbitration itself. Nowadays, AAA has many competitors, but it is still a very popular option for construction contracts. There are pros and cons to choosing arbitration to resolve disputes, but the purpose of this post is to compare two arbitration organizations: AAA and the Massachusetts Home Improvement Contractor Arbitration Program (HIC).

Price: AAA is more expensive. The fees for arbitration are based on the amount in controversy, and the arbitrator is paid by the hour. There is no limit on the amount of time to be spent in arbitration. The HIC program has a fixed price ranging from $450-850.00 depending on the amount in dispute. This fee provides for a half-day arbitration that also includes a site visit if the homeowner so chooses.

Arbitrator: AAA sends out a list of arbitrators to choose from that can be rejected by the parties. The HIC program assigns the arbitrator. As long as the arbitrator has no conflicts, there is no choice (that I know of).

Appealability: AAA arbitrations are binding and final. Generally the only bases for overturning arbitrations are bias of the arbitrator and fraud of the arbitrator. Other states will also consider an appeal for "manifest disregard of the law." HIC arbitrations are appealable to the district or superior court with a new trial. The findings of the arbitrator become evidence in the trial.

Participation: A AAA arbitration can take place without the participation of the other side. The HIC program makes every effort to bring the parties in to arbitrate. Contractors impliedly consent to participate in the HIC arbitration when they register with the state.

Experience of arbitrator: Both organizations offer experienced arbitrators to arbitrate disputes. AAA has a construction panel and the HIC group consists of experienced construction attorneys, engineers, contractors, etc. I am on both panels, and I believe a number of the other arbitrators are as well.

I particularly like the Construction Industry Rules of the AAA. That said, M.G.L. c. 142A (the Home Improvement Contractor Statute) also offers guidelines for the HIC program.

At the end of the day, I would say that AAA is more "high end." The HIC program is intended to help homeowners and contractors to resolve disputes without the participation of attorneys (although many parties to hire attorneys for the process).

What you choose for your contract is up to you. Just make sure you know what you are agreeing to and how that might impact your claim if you end up involved in a dispute.

The Building Permit and the Homeowner

2008-07-10T02:40:00.000-04:00

I cringe when I hear that a homeowner has pulled a building permit. Homeowners do not consider the responsiblity that goes along with pulling the permit and do not really think things through before doing so.

Here's the good news-the average homeowner who pulls his own permit does not have to have a Home Improvement Contractor or Construction Supervisor license if he satisfies the following requirements:

"Exception: Any Home Owner performing work for which a building permit is required shall be exempt from the licensing provisions of 780 CMR 108.3.5; provided that if a Home Owner engages a person(s) for hire to do such work, that such Home Owner shall act as supervisor. This exception shall not apply to the field erection of a manufactured buildings constructed pursuant to 780 CMR 35 and 780 CMR R3. For the purposes of 780 CMR 108.3.5, a "Homeowner" is defined as follows: Person(s) who owns a parcel of land on which he/she resides or intends to reside, on which there is, or is intended to be, a one or two family dwelling, attached or detached structures accessory to such use and/or farm structures. A person who constructs more than one home in a two-year period shall not be considered a home owner. "

Here's the bad news:

1. If a "weekend" worker is hurt on your property, you are liable. If you hire a company, their workers are required to be covered by worker's compensation insurance (at least in Massachusetts).

2. You cannot avail yourself of the benefits of the Home Improvement Arbitration Program or the Guaranty Fund.

3. If your work causes damage to your neighbor's property, you are liable.

4. If you cause damage to your own property, your own insurance may be less inclined to cover the damage (although most insurance does not cover damage due to defective work).

5. You are responsible if your work is not up to code.

6. You are the "general contractor" and will need to coordinate the subcontractors.

Bottom line: Is it really worth it to pull the building permit yourself?

The Strength of a Mechanic's Lien

2008-06-12T13:32:00.000-04:00

One of my readers asked a very good question in response to a recent blog post. Is the mechanic's lien a stronger item in Massachusetts? The answer to that question is yes, a mechanic's lien is a very effective means for a contractor to put someone on notice of his claim. It will also put a "cloud" on the title of the property, meaning that most real estate conveyances cannot take place once a lien has been filed.

Over the past few years, mechanic's liens I have filed have prevented progress payments for new constructions projects, prevented the sale of houses, and forced others to come to the table and try to settle the dispute.

The only way for a property owner to dissolve a lien without going to court is to post a bond, and as some of my clients have found out, posting a bond can be quite expensive (usually 10% more than the amount of the lien).

Even if the lien is not done properly, one still has to file an action in court to dissolve it, which requires paying legal fees that are frequently not recoverable.

So, in order for a contractor to protect his or her interests, she should file the necessary documents for a mechanic's lien. It is much less costly than filing suit and a very effective means of pursuing payment.

When the Subcontractor Does Not Get Paid

2008-05-29T03:20:00.000-04:00

There is a great deal of confusion about what to do when a contractor does not pay the subcontractor. The homeowner wonders if he is liable when subcontractors start knocking on his door, saying they are still owed money. Subcontractors are not sure about their rights either. They are upset that the general has not paid them, and do not know what to do next.

Please keep in mind that the following information applies to Massachusetts law. I suspect that other states are similar, but you need to consult with your own legal advisor about these issues.

The general rule is that when the contract is between the contractor and the subcontractor, the homeowner is not liable to the sub for payment.

There is an exception carved out in the law that helps to protect subcontractors, and that is the mechanic's lien law. Mechanic's liens are generally a creature of statute, which means they are governed by a specific law. In Massachusetts, that law states that subcontractors can place liens on an owner's property as long as they follow the specific requirements of the statute. For those who want to read the section of the law that applies to subcontractors, here it is:

Chapter 254: Section 4. Subcontractors; written contract; notice; filing; form; indirect contractual relationship; notice of identification

Section 4. Whoever furnishes labor, including subcontractor construction management services, or who furnishes material, or both labor and material, or furnishes rental equipment, appliances or tools, under a written contract with a contractor, or with a subcontractor of such contractor, may file or record in the registry of deeds for the county or district where such land lies a notice of his contract substantially in the following form:

For a complete version of that section, you can go to:

http://www.mass.gov/legis/laws/mgl/mgllink.htm

Filing a lien is a bit complicated, and it is very easy to do it wrong.

So, the homeowner may ask, how can a subcontractor place a lien on my property when my contract is with the general contractor?

The answer is: that is the subcontractor's right, but whether she will prevail is another story.

The owner is only liable to the subcontractor for the amount of money that is still owed to the general contractor.

So, how does this work in practice?

General contractor abandons the job and has been paid in full. Subcontractors have not been paid. Subcontractor files a lien. Homeowner goes to court to dissolve the lien, proving that the GC has been paid in full. Subcontractor loses. Subcontractor still has a claim against the GC for payment.

GC finishes the job and is still owed $30,000.00. Subcontractors have not been paid and the aggregate amount owed is $50,000.00. There is $30,000.00 left in the pot, and the subcontractors will not be paid in full.

The contract designates that certain payments are earmarked for subcontractors. Those payments are made, but money is still owed to the GC. I would argue that the GC has been paid for the work done by the subs, so no money is owed. However, I have not read case law regarding that scenario.

So, if I am a homeowner, and the subs are not getting paid, what can I do?

1. Write joint checks to the GC and the sub so both have to endorse the check before it is cashed.

2. Ask the subs for lien waivers as they finish their work.

3. Sometimes it is better to pay the subs twice just to get the work done and avoid legal fees and extra costs to complete the job. It's a hard pill to swallow, but try to be level-headed about what you do.

When the GC is in trouble, the first sign is frequently that subs start to complain about not getting paid. The homeowner should respond at the first sign of a problem and address the issue as quickly as possible.

There are some additional technicalities in the lien law that a homeowner may follow, but those would only add further confusion to the issue.

Maintaining Control During a Home Renovation Project

2008-05-09T02:15:00.000-04:00

Perhaps the hardest part of dealing with a home renovation project for a homeowner is giving up control of his home. The homeowner has to really have faith in the contractor because she is turning her life upside down and allowing someone else to control her environment. The contractor is automatically in conflict with the homeowner, because he is trying to maintain control of the project while the homeowner is "interfering" in the process. The interference isn't necessarily a bad thing, because it allows for a system of checks and balances.

At the same time, some homeowners overstep and try to micro-manage and drive the contractor crazy. So, how does one maintain a balance and deal with the lack of control?

Rule #1-Start with a good contract. A contract that contains clauses that deal with possible unforseen events helps to protect both parties. Those who are in the business of construction develop these contracts over time as incidents occur during home improvement projects. They learn from the experience and incorporate these obstacles into the contract to protect future parties.

Rule #2-Communicate! Keep the lines of communication open. If you are going to destroy the homeowner's prized azaleas, warn her. If you do not want the contractor to damage your family heirloom, remove it or warn the contractor. If something is getting on your nerves, nip it in the bud, and discuss it.

Rule #3-All change orders must be in writing and signed off on by the parties. It's worth saying one more time. The parties should agree how the change order is going to affect the contract price and the date of completion.

Let's face it. No one likes to give up control; especially of his house or control over her workmanship. However, in the unlikely marriage between homeowner and home contractor, each side must work with the other and compromise in order to achieve the final goal.

The Contractor-Discussing Increases in Price

2008-05-02T01:51:00.000-04:00

I have noticed a trend recently in contractor-homeowner disputes. It is a problem that usually occurs when contractors do not follow my cardinal rule:

ALL CHANGE ORDERS MUST BE IN WRITING AND SIGNED OFF ON BY BOTH THE HOMEOWNER AND THE CONTRACTOR. THE CHANGE ORDER SHOULD SPELL OUT THE INCREASE OR DECREASE IN PRICE AND ALSO STATE WHETHER THE DATE OF SUBSTANTIAL COMPLETION WILL CHANGE AS A RESULT OF THE CHANGE ORDER.

The trend is that as the project progresses, the contractor realizes that he has underbid the job, and starts to ask for or negotiate for more money.; or, at the end of the project, the contractor finally works on his accounting, and discovers that he has to bill for a great deal of additional work.

When this occurs, what do you think happens? The homeowner ends up furious, shocked and blindsided by the additional bill, or it does not dawn on him/her right away that he is shelling out much more money than anticipated.

The reason this occurs is obvious: no one likes to talk about money. The contractor discovers that the project is going to cost more than he anticipated, and is afraid to admit it and give the homeowner options. Or, he does not keep up with his accounting, and is slammed at the end of the job, when he discovers that he has been operating at a loss.

So, the moral of this post is that the contractor has an obligation to both himself and the homeowner to bid responsibly and monitor the project as it progresses. If he does run into a problem, he is better off being honest and working with the homeowner. Trying to build in extra costs surreptitiously, or sneaking in an extra bill at the end only provides fodder for irresolvable disputes and ultimately, lawsuits.

So, talk about the money openly and honestly. It will payoff at the end.

Contractor Show on YouTube

2008-04-22T22:45:00.000-04:00

I recently made my YouTube debut when I was interviewed by The Contractor Show in Florida. I gave advice to contractors about how to prevent disputes during renovation projects.

Here's the link: http://www.youtube.com/watch?v=KsHpXmFkS1U

Yes, You Really Have to Read the Construction Contract

2008-04-07T01:30:00.000-04:00

One day I was having lunch with a colleague who is an in-house counsel and he told me that someone asked him, "Do you really read everything that's written in those contracts?" At that point, we both started to laugh because the answer is yes, we really do read every word.

It astounds me at times what people will sign without reading the contract. For example, I recently reviewed a Massachusetts contract that said that all disputes would be resolved by going to an arbitration hearing that would take place in Washington, D.C. How could these people agree to go to Washington, D.C.?

Another contract stated that the arbitrator had to be chosen by the Superior Court. How practical is that? It is better to say that an arbitrator will be mutually chosen by the parties. If the parties cannot agree, then there should be a secondary mechanism for choosing the arbitrator.

One of my favorite clauses is when people put in that the prevailing party will be reimbursed for his/her legal fees. Why give away legal fees? The party creating the contract should put in a clause allowing him to collect legal fees if he has to bring a claim against the other party. Let the other side negotiate to protect her interests.

Choice of law. I can't tell you how many times I've seen contracts where some other state's law controls, or the parties agree to go to a given court or county. Just make sure that these terms are intentional.

Interest and/or late fees. Payment requirements are also negotiable. Do not agree to pay interest or late fees unless you have to.

I could give many more examples, but by now, you've gotten the point. The homeowner must read the contract before signing it. The contractor must make sure that he has a contract that is in compliance with the law and that protects his best interests.

Finally, if the contract is for a significant amount of money, extremely complicated, or you just can't bear the thought of reading it, ask your attorney to review it. Dare I admit, I actually enjoy reading and writing contracts, and it is my job to protect your interests.

The Payment Schedule

2008-04-04T15:52:00.000-04:00

Most construction contracts include a schedule for payments that looks something like this:

33% on signing

33% at completion of the rough inspection

33% upon substantial completion.

Although this would appear straightforward, in many cases it is not, and both parties need to put more thought into the payment schedule. From the contractor's point of view, he wants to make sure that he gets paid regularly, so he can pay for his subcontractors and materials. From the homeowner's point of view, she does not want to get so far ahead on payments that the contractor has an incentive not to finish the job.

In addition, payment becomes a way of monitoring performance and ensuring that each side lives up to his end of the bargain. The contractor has to perform before payment, and the homeowner has to show good faith and pay so the contractor will perform.

Most importantly, the payment schedule must allow for verifiable stages when payment will be made so both sides know what to expect. Sometimes payments are broken down further.

For example:

$x on signing
$x on the start date
$x once framing is completed
$x electrical
$x plumbing
$x at rough inspection
etc.

The advantage of this kind of payment schedule is that it gives both sides the incentive to keep to a schedule and perform.

The kind of payment schedule to avoid is one that is based on percentage completion (who will decide?) because this becomes an opportunity for debate on both sides about how to determine this percentage.

Finally, in Massachusetts, final payment cannont be demanded until the work is done to "the mutual satisfaction of the parties."

So, when preparing a contract for construction work, give some thoughts to the payment schedule. It may have more of an impact than you might think.

PREPARE FOR A SAFE SPRING CONSTRUCTION SEASON

2008-03-27T23:44:00.000-04:00

Another post from Jerry Solomon:

The new 2008 construction season is just weeks away. As you plan and prepare for your new jobs think about the safety of your workers and subcontractors. Make sure everyone knows how to do their work safely and is aware of the safety rules that apply to residential construction.

OSHA continues to focus on residential construction as a high hazard industry. They are out there looking for you. Last year they issued over 4900 citations against home builders and renovators with penalties of over $3.7 million. You need a lot of profit to cover those penalties which come off your bottom line.

The most frequently cited violations are for fall protection for workers on floor edges, roofs, etc. Workers must be protected against any falls of 6 feet or more. Guardrails may be impractical except for fall hazards that might exist for a few days or more. For trained workers, safety harnesses with lanyards which are properly worn and secured are often the best option. OSHA citations for inadequate fall protection account for almost $1 million of last year’s total penalties against residential contractors.

Close behind in dollars and frequency are citations for inadequate scaffolds. A scaffold is any elevated work platform. You’ve got to think about a stable base, the load capacity, proper bracing to the building, proper planking or pics, safe access, and fall protection. The OSHA fines are not all there is to worry about. There was a recent report of a roofer at a condo site who fell 17 feet when the scaffold he was working from pulled away from the building. He was paralyzed. The general contractor was sued as was the contractor that erected the scaffold. The case was settled for over $2 million. Imagine what a settlement like that will do for your future insurance costs. For some contractors the worst part is thinking about the guy who fell and how some small additional precautions might have avoided this accident.

The third most frequently cited OSHA violation is for ladders that don’t meet proper standards. Get rid of those old crappy ladders. If you build ladders on site, make sure you know the rules and do it right. Open step ladders before using them. Make sure your extension ladders are at the appropriate angle and braced at the top. And keep your ladders away from electrical lines.

OSHA also frequently cites residential contractors for electrical violations. Make sure everything is grounded. Throw away cords that are frayed or where the grounding pin has been cut off. Don’t use extension cords where they can be pinched or cut or crushed. The use of GFCIs is the norm. Don’t allow work on live circuits. Even the old-timers are starting to come around on that. Don’t cut corners on electrical safety. Lives may be at stake.

Jerry Solomon
Law office of Jerrold Solomon
617-244-7345
www.oshastrategies.com

Preparing Yourself for a Home Renovation Project

2008-03-20T02:33:00.000-04:00

A couple of weeks ago, I gave a presentation along with a home contractor to a group of professionals. The contractor, Paul Monaco, brought up a number of terrific points about the effect that a home renovation project has on one's household. So, in no specific order:

1. Be ready to have your life turned upside down. Doing renovation work in your home is very disruptive.

2. Do not put in a new lawn or beautiful new shrubs just prior to putting in an addition. Assume that your landscaping is going to get ripped up.

3. Prepare to eat off paper plates and wash your dishes in the bathtub or a temporary slop sink.

4. Understand that different workers will come and leave at different hours.

5. Do not count on workers to arrive on a daily basis. For example, a plumber may need to attend to an emergency and put off work at your home for a day.

6. Unforseen events may occur. Weather may interfere with the progress of your project. In addition, there may be hidden defects that must be addressed. A recent change in the building code in Massachusetts is also placing new demands on contractors and there may be more work involved to bring your project up to code.

7. Communicate, communicate, communicate. Keep the lines of communication open and many problems will be prevented.

By the way, this is my 100th posting!

Calling in the House Therapist

2008-03-16T23:31:00.001-04:00

The New York Times featured an article recently about consultants who help homeowners work through renovation projects. Here's the link:
http://www.nytimes.com/2008/03/13/garden/13coach.html?_r=1&scp=1&sq=renovation+consultant&st=nyt&oref=slogin

The Reality of Legal Fees

2008-02-24T15:35:00.000-05:00

A couple of weeks ago I was having lunch with another attorney, and I was lamenting about the fact that clients have such a difficult time understanding legal fees. The public tends to think that all lawyers set out to take advantage of their clients and charge inordinately high hourly rates without justification. Nothing could be further from the truth for most attorneys.

The moment a client calls, the first thing I do is determine whether their claim merits the involvement of a lawyer, and whether the ultimate recovery will exceed the cost of pursuing the case. We attorneys recognize that most disputes ultimately come down to money, and the goal is to end up with the most money in your pocket, or prevent a payout on your part.

There are really very few situations in which you will recover your attorney's fees. Even though most of the claims I file on behalf of homeowners will entitle them to attorney's fees, when it comes to settlement, they are rarely included. Most (in my case over 90%) cases settle. The cost of a trial and the chance of collecting on a judgment are just too great and too risky for most parties. For that reason, we always keep the attorney's fees in mind.

Principle is expensive. I wish I had a dollar for every time a potential client tells me that it's all about the principle, and not about the money. I always say, "Do you know what you will be telling me six months from now?" They look puzzled and answer "what?" "Your bill is too expensive!" Even if it's about principle now, at the end of the day, it will almost always be about the money. It is my job to be objective and level-headed and keep reminding you of that.

Fees. Attorneys are in a service profession. We have put in many years to learn our profession and you are paying us for our expertise. We charge for meetings, phone calls, e-mails and the time spent working on your case. I had one client who would always talk as fast as she could when she called me, until I assured her that I want my clients to feel free to call me, and I will only charge for the time spent discussing the case. I do not charge for the time spent talking about the Red Sox (unless you are a Yankees fan).

There is a constant debate in the legal profession about how to make our billing system more palatable to clients. We talk about flat fees, billing in phases, etc. The problem is, in litigation, too much of what we have to do is completely unpredictable. Most of the tenor of the case and the amount of work involved is dependant on the other side and their approach to the dispute. A cooperative opposing counsel may have the goal of resolving the dispute in the fairest, most expedient fashion possible. On the other hand, someone with a difficult, highly combative client, or an attorney who acts like a bulldog is going to drive costs up immensely. That is why we always try to keep the end in mind and keep costs down as much as possible, but cannot always do so.

I always say if I had a crystal ball, I would start a hedge (investment) fund. I want you to win as much as you do, but I cannot guarantee outcomes. So much of what occurs in a lawsuit is outside the attorney's control. I can only promise to put in my best effort and provide quality service and do excellent work. That is why you pay for my services. It is my hope that at the end of the day I will reduce the impact of your claim enough that you can move on with your life without having suffered a financial disaster. If you are made "whole," that is a win. If you get a windfall, which is extremely unlikely, that is an incredible bonus. Lawsuits are not intended to make you win the lottery.

So, when thinking about hiring a lawyer, make sure that you hire someone who factors in the cost of his or her services, and keeps the net result in mind. The goal is to minimize the damage you have suffered, and if that is achieved, the cost involved will have been worth it.

Anatomy of a Claim Against a Homeowner

2008-02-19T22:10:00.000-05:00

The other day I posted on the usual procedure for bringing a claim against a contractor. Today I am focusing on what the contractor should do when bringing a claim against a homeowner. Some of these steps specifically apply to Massachusetts law.

1. Make sure you have a good contract that is in compliance with your state law. In Massachusetts this means complying with the Home Improvement Contractor Act, M.G.L. c. 142A. Keep in mind that you cannot collect attorney's fees in MA unless you include that provision in your contract. Decide whether you want an arbitration and/or mediation clause in your contract.

2. Make sure you are registered with your state, if required.

3. If the homeowner refuses to pay, file a mechanic's lien. Remember that the law regarding mechanic's liens is very specific and it is very easy to fail to do it properly.

4. Write a demand letter to the homeowner with a clear explanation as to why you are owed the money. Give the homeowner a chance to say why he/she does not want to pay, and try to resolve the situation without being forced to take further action. It is much easier for a contractor to address a punch list item and get paid quickly than to be forced to file a claim against a client. In Massachusetts, you could be subject to double or triple damages, attorney's fees, interest and costs if you violate the MA Home Improvement Contractor Statute.

5. File suit to enforce your lien, or make a demand for arbitration or mediation.

Mediating Home Contractor/Homeowner Disputes-On Television

2008-02-18T23:36:00.000-05:00

This posting is from David Leavitt, who is developing a television show to mediate home renovation disputes. Anyone who is interested should contact David directly. This sounds like an interesting way to resolve disputes without pursuing litigation:

I am casting Homeowners and Contractors for a home renovation dispute mediation and resolution TV show.

The scope and breadth of the dispute can range from any of the problems you usually see including, but not limited to, type of work, budget, build problems, personal problems, and homeowner changes.

Since we are a television show, we MUST complete the project in a relatively short amount of time (about 6 days), which will fit nicely with the needs of a homeowner and contractor. This means we seek projects that are large enough in scope to show a good before and after experience, and small enough in scope to be finished in no more than about three weeks. Some examples would be a kitchen expansion, new room, bathroom remodel, garage build, etc. Please keep in mind that we will consider all sizes of work if the people and the project appear good for the show.

We intend to make absolutely sure that the dispute is solved to the satisfaction of both parties and that the project gets done right, on time and on budget. It should be a benefit for the homeowner via dispute resolution and project management, and for the contractor for the same reasons as well as excellent publicity for his or her business. And of course, it could save them both the time and cost of legal action.

Interested parties should contact me immediately!
The sooner we speak, the sooner we can try to resolve your dispute!
Please call or email me ASAP!

David Levitt
Casting Producer
Superfine Films
60 Grand Street, 4th Floor
New York, NY 10013
O: 212-941-6838
david@superfinefilms.com

ABOUT THE COMPANY:

Superfine Films is a Manhattan based film and television production company specializing in high-quality social issue documentary and reality television.

Our mission is to create unique, compelling, genre-redefining content that challenges, excites and engages viewers from start to finish.

Founded five years ago by award-winning filmmaker and television producer Steven Miller, Superfine has since grown to include the talents and energies of a tightly knit corps of writers, producers, shooters and editors, and is represented by N.S. Bienstock.

Superfine is currently in production on the sixth season of the hit show Psychic Detectives, the Court TV crime documentary series that explores the use of psychics by law enforcement and how psychics have helped to actually solve crimes; and Rock and Roll Acid Test, the Fuse Network series that plays a wild game of Truth or Dare when we put music myths and legends under the hot lights of our ultimate scientific testing.

Past work includes Heroes, a reality recreation based series for the Hallmark Channel, which depicts stories of ordinary citizens in acts of extraordinary courage. Superfine was nominated for an Emmy for the documentary film Meeting with a Killer: One Family¹s Journey, a story of redemption and forgiveness set inside one of Texas most notorious prisons.
Superfine has won two Gold Awards from the Houston International Film Festival and a CINE Golden Eagle for the acclaimed series Adoption.

Anatomy of a Claim Against a Contractor

2008-02-15T01:20:00.000-05:00

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

Contractors Say Recession Is Here

2008-02-13T00:12:00.000-05:00

http://www.thebostonchannel.com/video/15284867/index.html

The Boston Channel ran a story about the current economy and how it has affected contractors.

Contractors and Criminal Liability

2008-01-23T14:23:00.000-05:00

I have occasionally had clients who have been grossly mistreated by contractors. They have paid large sums of money for little or no return. The contractor may have done a little bit of work at the premises, but then disappeared. Perhaps the contractor took money in advance and then the homeowner discovered that even though the money was designated for subs, they were not paid.

At this point, homeowners frequently feel that they have been robbed. I have often been asked, "can I press criminal charges against the contractor?" I am not a criminal lawyer, but I have had experience with pursuing contractors criminally. Homeowners need to understand that bringing criminal charges will only succeed in the most extreme cases. One has to prove that the contractor took money and used it for other purposes. In addition, in a criminal case, it is necessary to show intent.

In my experience, most district attorneys hate contractor cases. They believe they belong in the civil arena. If the contractor has done any work, he can claim that there were change orders and the money was used to cover additional costs or materials. In order for criminal charges to be brought, the contractor has to intentionally take the homeowner's money. In most cases, this is very hard to prove.

My New Website!

2008-01-17T12:46:00.000-05:00

I am proud to announce my newly redesigned website! Please take a look at www.andreagoldmanlaw.com.

Top Ten Clauses to Have in Your Contract-The Homeowner

2008-01-01T21:33:00.000-05:00

The interesting thing about the contract from the homeowner's viewpoint is that many of the same clauses that I listed yesterday are just as important for the homeowner. For example, #1 is exactly the same:

1. ALL CHANGE ORDERS MUST BE IN WRITING AND INITIALED BY BOTH THE HOMEOWNER AND THE CONTRACTOR! Should I say it again? The change orders should spell out any change in the contract price and include information about whether the completion date will be affected.

2. The contract should clearly spell out the price for the job along with a clear cut payment schedule and a list of which aspects of the work must be completed before payment is made.

3. The contractor should indicate how often he will be at the job and who has authority to authorize changes orders. The homeowner should ask for that person's cell phone number and/or e-mail address.

4. There should be a complete description of the scope of the work and the materials to be used.

5. The homeowner should include a provision that will allow him or her to collect attorney's fees if he has to bring an action against the contractor for breach of contract.

6. The homeowner should include a clause about what constitutes breach of the contract and what the remedy will be if the contractor breaches.

7. Warranties should be clearly spelled out and include the items that are not covered as well as covered items.

8. The homeowner should decide whether he wants to include a mediation and/or arbitration clause in the contract.

9. The contract should include a detailed description of what constitutes punch list items and how to determine when the punch list is complete in order for final payment to be made.

10. The contract should clearly define unreasonable delay and what the penalties will be for finishing beyond the date of substantial completion. It should also indicate what will occur if the work fails inspection, is in violation of the building code, or is deemed substandard by a third-party inspector.

Remember, the best protection for the homeowner and for the contractor is a contract that clearly spells out how the job is going to work, and what will happen if problems arise.

Happy 2008 everyone!

Top Ten Clauses to Have in Your Contract-The Contractor

2007-12-31T17:13:00.000-05:00

As a post for starting off the new year, I have been thinking about the most important clauses to have in home contractor contracts. So, in an attempt to add to the top ten lists that are generated at this time of year, here is my list for contractors:

1. ALL CHANGE ORDERS MUST BE IN WRITING AND INITIALED BY BOTH THE HOMEOWNER AND THE CONTRACTOR! Should I say it again?

2. The contract should clearly spell out the price for the job along with a clear cut payment schedule.

3. The contractor should list reasonable start dates and end dates for the project with exceptions for delays caused by unforseen circumstances or homeowner delay.

4. The contractor should include a provision that will allow him or her to collect attorney's fees if he has to pursue payment from the homeowner.

5. There should be a complete description of the scope of the work and the materials to be used.

6. The contractor should ask the homeowner to designate who the decision makers are and make that person's cell phone number and/or e-mail address available to the contractor.

7. The contractor should include a clause about what constitutes breach of the contract and what the remedy will be if the homeowner breaches.

8. Warranties should be clearly spelled out and include the items that are not covered as well as covered items.

9. The contractor should decide whether he wants to include a mediation and/or arbitration clause in the contract.

10. And finally, the contract should include a detailed description of what constitutes punch list items and how to determine when the punch list is complete in order for final payment to be made.

I am sure there are more, but these are what come to mind for how contractors can best protect themselves. Tomorrow I will list my top ten from the homeowner's side.

Happy New Year!

Contractor Found Guilty of Criminal Charges-From the Metrowest News

2007-12-20T22:38:00.000-05:00

Contractor sentenced to 3-5 years in prison By Norman Miller/Daily News staff GHS Wed Dec 19, 2007, 11:44 PM EST

CAMBRIDGE - A Leominster contractor accused of bilking customers in Natick, Marlborough and Arlington out of thousands of dollars in unfinished work was sentenced to state prison yesterday.
Michael J. Corda, 50, was sentenced to three to five years in prison and to pay a yet-to-be-determined amount of restitution to the homeowners.
Corda, who owned Northeast Building and Design, was found guilty by a jury of seven counts of larceny of more than $250 and 16 counts of 142A violations, which is the law that prohibits certain acts by home contractors.
"When homeowners enter into an agreement with a contractor, they deserve to be dealt with honestly and to get the services that they paid for," District Attorney Gerry Leone said. "This contractor violated the trust of these homeowners and took thousands of dollars from them for work that he had no intention of performing."
Corda was indicted by a Middlesex grand jury on Sept. 26, 2006. Authorities said he agreed to five contracts in Natick and one each in Marlborough and Arlington.
Assistant District Attorney Elisha Willis said during Corda's trial he never intended to fulfill the services he promised in the contracts. She said Corda knew he did not have the resources to complete the jobs, and did not complete any of the services.
All of the incidents took place between November 2003 and August 2005. Along with the prison term and the restitution, Corda will be on probation for seven years after he gets out of prison. He will also be banned from working as a home contracting project manager in Massachusetts.
(Norman Miller can be reached at 508-626-3823 or at nmiller@cnc.com.)

When Contractors Fail to Pay Subcontractors

2007-11-28T20:07:00.000-05:00

In most home improvement contracts, the contractor serves as the general contractor (GC) and hires the subcontractors to do various aspects of the job. It is understood that it is the homeowner's duty to pay the contractor, and the GC then pays the subs. At least, that is how it is supposed to work.

One of the most upsetting experiences for a homeowner is when a subcontractor knocks at his door or walks off the job stating that he has not been paid. It is even worse when a sub files a lien on the property. The homeowners are caught off guard and frequently between a rock and a hard place.

They face a difficult choice: Should they re-pay the subs in order to get the work done, or rigorously defend against subcontractors' claims? In Massachusetts, if the sub's contract is with the contractor, he cannot prevail legally against the homeowner for payment. However, this is no consolation for a homeowner who is defending against a lawsuit, or living in an unfinished house.

The reality is that one has to weigh the cost of paying the subs, the likelihood of success in collecting against the GC, the cost of defending against a lawsuit and the consequences of have a lien on one's property, in order to decide what to do. That said, the best remedy is really prevention.

There are two ways to prevent claims from subs. One is to insist on lien waivers as the subs finish their work. This will immediately put the homeowner on notice if there is a refusal to provide the waiver . The other is for the homeowners to check in on a regular basis with the subs and ask them directly if they are getting paid. If not, they can immediately confront the GC and nip the problem in the bud.

In any event, it is a nasty surprise for homeowners when they discover that the subcontractors are not being paid. That is why they need to be vigilant and make sure that the situation does not get out of hand.

Attorney's Fees and Construction Contracts

2007-11-24T11:13:00.000-05:00

Many of my clients come to me with their claims and assume that the law will afford them their attorney's fees if they prevail in their case. Unfortunately, nothing could be further from the truth. The law does not provide you with attorney's fees unless there is a law that applies to your claim that gives you attorney's fees, or, they are provided for in the contract.

There are a variety of ways of wording attorney's fees provisions in contracts. They can be very one-sided, or more equal. I was just reviewing a contract for a client that allows for the contractor to recover his attorney's fees if he has to pursue payment from the homeowner. This is the contractor's contract, and not surprisingly, it does not afford the homeowner the same benefit. Since in this case, I represent the homeowner, I would be inclined to cross that line out. However, it is unlikely that the contractor would agree to such an exclusion.

The compromise provision would allow the prevailing party to collect attorney's fees. This spreads the risks equally between the contractor and homeowner. In many ways, this is a good clause to include in a contract, because it makes both sides think carefully before filing a claim. It actually promotes settlement because their is greater risk involved and the penalty for losing can be quite high.

One has to think quite carefully before signing a contract that gives either party attorney's fees. I have never seen a contract with a cap on the fees, although courts have been known to reduce them if they think they are unreasonable.

So, before creating a contract, or signing a contract, think about your goal, and think about what is fair. Here in Massachusetts, any violation of the Home Improvement Contractor Statute is a per se violation of the Consumer Protection Statute, which provides for attorney's fees, up to double or triple damages, interest and costs. Given that the law protects homeowners, I try to ensure that contractors have a clause that gives them attorney's fees in their contracts. It equalizes the playing field and makes both sides try to work together to resolve disputes.

The Home Improvement Contractor License and the Construction Supervisor License

2007-11-02T02:23:00.000-04:00

Both contractors and homeowners alike often do not realize that there is more than one type of licensing for contractors in Massachusetts. From the Office of Consumer Affairs & Business Regulation (OCABR) website:

A Home Improvement Registration certificate and a Construction Supervisor License are different.

The Home Improvement Contractor (HIC) Registration Program is primarily a business registration program designed to protect consumers. The registration process identifies the responsible party for the contracting business, who is responsible for the company’s business practices. A registration does not certify that a contractor has a set of construction skills.

A Construction Supervisor's License, however, does fulfill that function. If a contractor is going to be supervising certain structural work, then that person will need to have a license, which presently requires that the contractor has at least 3 years of construction or design experience and has passed a written examination on the State Building Code. Exams are intended to test the literacy of Building Code requirements and general construction practices.

The Department of Public Safety’s Board of Building Regulations and Standards (BBRS) requires an individual who supervises building construction for certain building types to be licensed as a Construction Supervisor.

Here's the confusing part: all contractors who do home improvement work must register for their HIC license unless they fall within certain exceptions. Contractors frequently believe that if they have their CS licence, they do not need the HIC license. However, this is not true.

Homeowners should make sure they hire only contractors who have their HIC license, or they will not be able to avail themselves of the benefits of the Home Improvement Contractor Arbitration Program or the Guaranty Fund.

Depending on the kind of work they do, contractors may need to have both licenses. They can check with the Board of Building Regulation and Standards to make sure that they are complyng with the law.

CONSTRUCTION WARANTIES – A TRAP FOR THE UNWARY

2007-10-19T18:15:00.000-04:00

From guest poster Attorney Steven R. Striffler, who is a construction attorney with construction experience:

“Attorney's fees for the review of a contract before it is signed are a fraction of the cost of their fees after the project has gone bad.”

I received two calls last week on warranties, one from a contractor and the other a homeowner. Without going into specifics, the scenario is something similar to this:

It has been about two years since you put that addition on your home, or if you are a contractor – have completed the project, and the roof starts leaking after that recent Nor’easter. Does the homeowner have recourse against the contractor? Is the contractor obligated to repair the roof? Well, that depends on the warranty clause contained in the construction contract, if in fact, the contract contained a warranty clause.

Most construction contracts contain an express warranty that the contractor will correct deficiencies and failures associated with the work for a certain period of time after the work is completed. The custom in the construction industry is for a one-year warranty. The theory being that most defects will manifest themselves within one year and contractors do not want to be subject to claims, and rightly so, for an indefinite period of time.

But what if your contract does not contain a warranty clause, or if it does, the defect arises after the warranty period has expired? Construction contracts also contain implied warranties. An implied warranty is an obligation imposed by law and is independent of any promises between the homeowner and the contractor. The most common implied warranties are (1) the implied warranty of habitability, which generally only applies to new homes, and (2) the implied warranty of workmanlike construction. However, implied warranties may be modified or disclaimed by contract. Also, these warranties are subject to different statute of limitation periods, which is outside of the scope of this discussion.

So, even if your contract does not contain an express warranty you may be able to recover on a claim for a breach of an implied warranty. And if you are a contractor and you think that your liability to correct any defects ceased after the contractual period, you may still be subject to claims. The moral of the story, if you are unsure of any of the terms of the contract, engage counsel before you sign it.

Nevertheless, the best assurance of long-term performance is a combination of quality materials and skillful workmanship. No warranty can adequately compensate for the lack of these key elements.

Steven R. Striffler Attorney At Law 268 Summer St., Suite 300 Boston, MA 02210-1190
Tel: 617-290-1573 Fax: 866-314-2716

Servicemagic.com

2007-09-29T00:24:00.000-04:00

I am not in the habit of endorsing contractors or contractor referral services, but I do like to make the public aware that they exist. I recently had a problem with a garbage disposal and contacted servicemagic.com. They responded with the names of three contractors in my area and I could read reviews of their services online. At least one or two called me right away. As it happens, I solved the problem myself, but I was impressed by how organized and efficient they are.

A potential client had a similar experience with servicemagic when looking for aluminum siding and roofing contractors. They responded quickly and he was pleased with the service. I am going to follow their website and review their advice from time to time, but so far, I am happy to report that customers have been satisfied.

Questions to Ask a Contractor's References

2007-09-07T22:12:00.000-04:00

How many times have you been advised to check someone's references? How many times were those references less than glowing? References are only as valuable as the information they provide, so the burden is on the homeowner to ask good, specific questions that will let him know whether the proposed contractor is a good match. So, here are some questions to ask, in no particular order:

1. Did your job come in according to budget?

2. How often did the contractor come to your home?

3. How often did the crew come to your home?

4. If the contractor was not there, was there someone with the authority to answer your questions and make decisions?

5. Were change orders in writing?

6. Did the job finish on time?

7. If not, why?

8. How did the contractor leave the site at the end of the day?

9. Did you feel it was safe?

10. Did the contractor obtain necessary permits?

11. What hours did the contractor work?

12. Did the contractor have other jobs going at the same time that you know of? If so, did he or she have enough workers to cover both jobs?

13. Were you consulted about materials used?

14. Was the crew pleasant?

15. Did the work pass inspection?

16. Were you given a clear idea of what the contractor was going to do for you?

17. Were the results what you expected?

18. Were you happy with the contractor's subcontractors?

19. How big was your job, and what kind of work did the contractor do for you?

20. Would you work with this contractor again?

Asking informed questions should help you decide whether your contractor is right for you. Hopefully, as a result, you will have a long-time productive relationship that results in a magnificent final product.

Suing a Builder-Part II

2007-09-02T15:51:00.000-04:00

I have written about suing a builder for new construction previously, but I would like to spell out in more detail the remedies that a homeowner (or even commercial construction for that matter) may have when a dispute arises.

As I have now stated over and over, the place to start is with a good contract. Particularly when new construction is involved, there are usually benchmarks for progress payments. Homeowners should be particularly vigilant regarding those benchmarks, and builders should be clear about which work needs to be completed and whose approval is required before the payment is made. On the builder side, it is nice when those payments are automatic upon inspection (bank or town should be specified). The homeowner may want to include a provision that he/she should be allowed to inspect before payment is issued, but the builder should be able to protect himself at that point so the homeowner cannot have full power to determine the definition of what constitutes completion.

If the homeowner is not happy, he should start out with a demand letter to the builder spelling out the problems, and if in MA, write the letter pursuant to c. 93A. If delay is the problem, then the homeowner should negotiate a new schedule for completion with the builder and each party should sign off on it. If quality is a problem, the homeowner may want to bring in an independent inspector to evaluate the work and write down which corrective measures must be taken. If the property does not pass inspection, the building inspector will specify what needs to be done to bring the structure into compliance.

In any event, once quality or delay is an issue, there should be a clear cut agreement about when the contract will be considered breached, and what the remedies will be for the breach of contract. The homeowner should be able to know at which point she can hire someone else, and the builder should ensure that he will be paid for work to date or even the full value of the contract if the homeowner terminates it unlawfully.

Homeowners have two means of securing judgments against builders. They can either prevent progress payments, and/or maintain an amount for retainage until the work is complete (usually when a certificate of occupancy is obtained and punch list items are completed), or file suit and move to attach the builder's property.

Putting a lien on property is more difficult with new construction because if the builder is incorporated you can only obtain a lien on corporate property. Under the Home Improvement Statute, the company's designee is individually liable, but that does not apply to new construction.

When new construction is involved, the approach to a dispute is similar to that of a renovation or addition issue, but the law does not provide as many built-in protections. That is why a good contract is even more important for new construction, and why homeowners should monitor the work.

The Contractor and Unreasonable Delay

2007-08-28T20:38:00.000-04:00

We have all heard how construction/renovation projects take longer than we think they will. How you're lucky if they're done by a certain date. How you should be thrilled if your contractor actually shows up. The question is, when is delay par for the course, and when does it rise to the level of unreasonable or become actionable (resulting in an actual claim against the contractor)?

Of course, the place to start with all of this is the actual contract. Homeowners and contractors should spell out how often the workers will be on site and for how many hours. There should be minimums, and everyone should be clear about managing expectations. As an aside, a person should always be designated as the point person for the job when the contractor is not on site. Both sides should know what that person's authority is, and how to reach the GC if that person is not authorized to make decisions.

What should a homeowner do, however, when it is clear the project is not on track; that it will not be finished anywhere near the completion date listed in the contract?

The answer is quite straightforward, but it does not usually occur to homeowners to try to work things out with the contractor. They feel helpless and like sitting ducks with a home that is fully gutted. The homeowner should request a meeting with the contractor. They should sit down with a calendar and map out work to be done each week with specific dates of completion. The deadlines should be short so the homeowner will know right away if the contractor is going to follow through. Then, there should be a penalty built into the agreement. If the contractor breaches the agreement, there should be an understanding that there is a monetary penalty, and/or that the contractor is in breach and that the homeowner has the right to terminate the contract. It should be stated that this addendum is now incorporated into the contract. Both parties should then sign off on the agreement.

In this way, the homeowner can take back control over her project. The contractor will no longer have free reign over when and if he shows up. The homeowner will know that he will win no matter what, because the work will either be completed, or, the homeowner can terminate the contract without fearing repercussions for illegal termination.

Additional factors to consider may include stating who will show up and when, whether intermittent inspections will occur, and what kind of damages will ensue if the work is found to be substandard. Substandard work and delay frequently go hand in hand, but that is fodder for another posting.

Think Before You Sue

2007-08-23T22:00:00.000-04:00

For those who are wondering why I am posting so much this week, it is because I am away on vacation. I would like to take this opportunity to ask those of you who read my blog to ask questions and suggest future blog posts.

This post is not directly about contractor or homeowner issues, but I have been thinking lately about the stress of dealing with a lawsuit. Parties vary regarding their involvement in their own disputes. Some are happy to hand their claims over to an attorney and check in now and then, and others want to be directly involved and strategize about their claims. However, no matter how much or little involvement you choose, you should realize that lawsuits are extremely emotionally taxing.

First of all, the financial burden cannot be underestimated. Lawsuits are unpredictable. Even if your own attorney is prudent about expenses, he or she has no control about how the other side conducts themselves. Opposing counsel and/or parties can make life miserable and drive up costs. That's just the way it is. Even if you prevail in a lawsuit, there is frequently no guarantee that a judgment will be paid. Different states have different measures available for collection, but it is not usually easy.

Emotionally, lawsuits are difficult. You will be living with your dispute for a long time, and re-living unpleasant experiences every time there is discovery (written questions, document requests and depositions). Your suit will become a part of your life that feels like it never goes away. It is unlikely that a win will be a slam dunk. Ultimately you will probably settle for less than you had hoped for at the beginning.

Why would a lawyer say all of this? The truth is, I am like a surgeon who does not want to do surgery unless it is medically necessary. Most cases settle. Clients have to understand that resolving disputes short of filing suit is usually a better option. Legal expenses have not accumulated extensively, and statistically, parties are much more likely to comply with negotiated settlements. Resolution is not left up to chance where twelve arbitrary jurors are deciding your fate, or a judge is making the decision for you. It is much better to maintain control over your own outcome.

I do not hesitate to advise my clients to file suit when it is necessary and recovering a judgment is feasible. Litigation is my forte along with arbitration and mediation. However, I do not recommend filing suit unless it is worth it, because the emotional and financial consequences are too high.

Home Contractor Claims - to Litigate or to Arbitrate (From the Contractor's Point of View)?

2007-08-22T02:15:00.000-04:00

Unless a contractor has a provision in his contract that entitles him to attorney's fees when pursuing a claim against a homeowner, at least in Massachusetts, the contractor will be forced to pay his attorney's fees whether he is choosing to arbitrate or litigate. If the homeowner opts to file with the Home Improvement Contractor Arbitration Program in MA, then neither side is entitled to attorney's fees.

So, let's assume the following scenario: The contractor has fully performed, and the homeowner now refuses to make the final payment, or the homeowner is withholding payments, or the homeowner has unlawfully terminated the agreement (the contractor should have the terms for termination included in her contract). What should the contractor do?

First of all, do not underestimate the stress and impact of a lawsuit (the subject of an upcoming post). It should always be one's goal to try to resolve disputes without a formal proceeding. Contractors should attempt to communicate with clients so that irresolvable conflicts do not arise. However, there are situations where the communication does break down and it is helpful to have a plan if this occurs.

First of all, most states offer a powerful option for contractors/construction workers, and that is the mechanic's lien. The procedures required for filing liens vary by state, so it behooves contractors to try to familiarize themselves with their rights under the law. You should also form a relationship with an attorney so that you do not have to frantically search for one if you need to file a lien.

The contractor should also consider sending a demand letter to the homeowner. Although this is not required, it is helpful to spell out your side of the story and understanding about how the work has progressed, what (if anything) is left to be completed and why payment is due.

Then, consider whether you want to arbitrate or litigate if all other options fail. Actually, the time to decide whether to arbitrate is when the contract is drafted, but the homeowner might agree to arbitrate even if there is no arbitration provision in the contract.

Advantages of arbitration: The parties choose the arbitrator (as opposed to a judge, where there is usually no choice), they choose the location and timing of the arbitration, they can elect an arbitrator with expertise in construction, and the process is frequently more expedient and less expensive than litigation.

The main disadvantage? Arbitration is usually binding and not appealable. That means that the parties are subject to the whims of the arbitrator, and there may be little or no discovery (the exchange of information prior to the hearing), and in some states, arbitrators can disregard the law. The bases for appealing an arbitration are so limited (bias or fraud on the part of the arbitrator and in some states, manifest disregard of the law) that one must assume that the arbitration will be final.

Litigation is a well-established process with rules of evidence and legal precedent. The parties all work with the same rules and there is an opportunity to exchange information by sending out interrogatories (written questions), document requests, requests for admission and taking depositions. This gives each side the chance to continuously assess the strength of their cases and consider whether settlement is an option. If one is unhappy with the outcome, then appeals are possible. However, one should keep in mind that parties usually do not appeal because the process is costly.

The main problem with litigation is that costs can spiral out of control depending on how the other side approaches their case. If they request numerous depositions for example, costs can quickly accumulate. In addition, one is subject to the court's timetable, and hearings and trials frequently get postponed even though the attorneys have prepared. They will then need to prepare again which adds to the cost.

All in all, it is better to avoid disputes altogether. However, it is better to be well-informed about one's alternatives and think them through before an irresolvable conflict occurs.

P.S. I always appreciate questions or comments.

When to Get an Inspection Report

2007-08-19T11:54:00.000-04:00

I have recently been thinking a great deal about when a homeowner should hire an independent expert to review the work that a contractor has done at his/her home. This usually arises when the quality of the work has come into question. The homeowner is concerned that some items may need to be re-done, and subsequent contractors may have alarmed the homeowner with sweeping statements about extensive repairs. In addition, the renovation work may have failed the rough inspection, or the building inspector may alert the homeowner to violations of the building code.

I used to tell homeowners to get two or three quotes from subsequent contractors. If the quotes were all similar, then the homeowner would be able to verify the problems. However, as with new hairdressers or dentists, each contractor has his or her style, and there is a fair amount of subjectivity in looking at someone else's work.

The advantage with an independent home inspector is that he has nothing to gain from finding problems, and his opinion will carry more weight with the court. I will often bring a motion to attach real estate as potential security against a contractor. In my experience judges are more likely to grant the motion when an independent inspection report is attached.

Independent inspectors also help ferret out exxagerations on the part of the homeowner and can verify whether work has been done to industry standards. In some ways, this can also support a contractor who is being unjustly accused by an over demanding homeowner who finds fault with the work.

An independent inspector can inject some reality into an emotionally charged situation, and help both sides have a more realistic view of potential damages. This can only serve to help resolve the situation.

Home Contractor Claims - to Litigate or to Arbitrate?

2007-08-19T11:30:00.000-04:00

Once the relationship between a home contractor and a homeowner has broken down, and a demand letter has been sent, a decision must be made about how to proceed if the dispute is not resolved. At this point most homeowners and contractors are fairly anxious. They are wondering about what happens next, and what it is all going to cost. The steps I take in these situations is always the same, but the outcome will vary.

First, the homeowner side:

1. What are my damages? I have posted on damages before, so I am not going to explain how to determine damages in this post, but this is the most important question.

For claims less than $5000.00, one should consider small claims court or in Massachusetts, the Home Improvement Contractor Arbitration Program.

For claims between approximately $5000.00 and $20,000.00, one should consider the Home Improvement Contractor Arbitration Program. The reason is simple; the filing fee is low, the Office of Consumer Affairs and Business Regulation administers the whole process, and one does not need a lawyer to use the program (although one may decide to hire a lawyer for this process as well). As long as one qualifies (the contractor is registered, the contract was signed within the last two years, the contractor pulled the permit, the construction work was a renovation, etc.), this is the easiest process for resolving a home contractor dispute and the contractor must submit to arbitration as long as he is registered. In addition, the Guaranty Fund will pay up to $10,000.00 in damages, and it is not as important to procure security for one's claims.

For claims over $20,000.00, it would be much more important to establish whether the contractor owns assets that would be available to satisfy a judgment against him. At this point I do an asset search and usually file a Motion to Attach Real Estate along with a lawsuit in order to have security for a judgment. Violations of the Home Improvement Contractor Act usually will allow for getting one's attorney's fees back, so it is worth it to pay for the costs involved in filing suit. This is a much longer, complicated process than the arbitration program, but the opportunity to obtain prejudgment security makes the process worthwhile.

These are very general guidelines for how to decide how to proceed with pursuing a claim against a contractor. The decision made for a specific case will depend on the ability to collect at the end, the size of the claim, the amount of hassle and difficulty involved in a lawsuit vs. arbitration, and the individual homeowner's goals. However, this will hopefully answer the general question of how one goes about making the decision what to do next.

The Endless Punch List

2007-08-01T02:59:00.000-04:00

In Massachusetts, a homeowner does not have to make the final payment until the work is done to "the mutual satisfaction of the parties." What is a contractor supposed to do when the homeowner is never quite satisfied, or the punch list of items to be completed never seems to end?

I have seen this situation occur with my contractor clients, where homeowners take advantage or have unrealistic expectations about when a project is complete. How can contractors avoid this problem?

1. Start with a a good contract that spells out the work to be done and the materials to be used, IN DETAIL!

2. Make sure that all change orders are in writing, and adjust the completion date accordingly. Make sure both the contractor and the homeowner signs off on all change orders.

3. Designate in the contract who the decision makers are and make sure they sign the contract and all of the change orders.

4. When the job is complete, have the homeowner create a punch list and discuss each item in detail. Agree in advance what "complete" means.

5. Plan in advance for potential delays by suppliers or for possible mistakes when ordering materials and agree what the consequence will be for these delays.

6. Once the punch list has been created over a reasonable period of time (a contractor should assume that a homeowner is not going to notice everything immediately), say over a ten day period, then the contractor should agree to come back and finish the work by a certain date.

7. Once the work is finished, it would be worthwhile to have the homeowner sign off on the job and agree that the work has been done to his satisfaction.

8. Once final payment has been made, the contractor may want to "sweeten" the deal by signing something saying that all subs have been paid or by supplying lien waivers from the subs.

9. As always, keep the lines of communication open so there are no nasty surprises at the end of the job.

10. Make sure the homeowner knows which warranties are provided and how long they will last. I know one contractor who warranties his workmanship forever.

Why is it important whether the builder/contractor is incorporated?

2007-07-23T22:42:00.000-04:00

I was so pleased to read the question listed above as comment on a recent blog post. Please continue with questions, and I will be happy to answer them. There are a number of reasons to want to know whether a builder/contractor is incorporated.

In general, the reason to incorporate a business is to protect one's individual assets from creditors. For that reason, and others, many businesses incorporate. A corporation is like a separate individual. So, if you obtain a judgment against a corporation, you can only collect against corporate assets. Sometimes contracting companies own trucks or equipment, but in general, they do not own valuable assets. So, before investing money in a claim or lawsuit, it is important to figure out if there is anything to collect against at the end of the day.

Of course there are other reasons to incorporate as well. There are tax implications, branding and marketing reasons (to protect a particularly catchy name), and other financial and business reasons.

In Massachusetts, a designee of the corporation is jointly and severally liable for a violation of the Home Improvement Contractor Statute. That means that the designated individual can be held individually liable for a violation. It is important for contractors to know this and make sure to follow the law before they start going after homeowners for money, etc. Contractors do not want to be held invidually liable under the law and subject their assets to seizure!

How to Approach Your Home Contractor Problem

2007-07-11T22:46:00.000-04:00

Today I was thinking about that fact that I approach most of my home contractor cases the same way, but the path that is followed after the initial steps will vary depending on a number of factors. It also occurred to me that I frequently send homeowners off with a homework assignment before I even meet with them, because they call me before being fully cognizant of their potential damages or without knowing what they want to do next.

More specifically, I get a call like the one I received today where the contractor delayed and delayed, violated the building code by not pulling permits, and then abandoned the job. The homeowner in this case did do some of his homework before calling me, so it was easier to figure out a course of action.

Here are some of the steps to take:

1. Find out if your contractor is registered with the state if you have not done that already.

2. Find out if your contractor is incorporated.

3. Get quotes for completing the work.

4. Have the work evaluated for defects.

5. Speak to your local building inspector and find out whether proper permits were pulled and whether inspections should have taken place.

6. Ask the building inspector to inspect the work and write a report.

7. In some cases, you will want to hire an independent expert to evaluate the work.

8. Document everything! Write a chronology of the events leading up to the breakdown of the relationship.

9. Take good pictures!

10. If you have to do emergency repairs, try to get even more documentation of the problems before they are repaired.

11. Try to determine where your contractor lives and whether he/she is married. (You may ask why? If you try to attach real estate to secure a possible judgment against the contractor, it is harder to enforce a judgment against property owned as tenants by the entirety, which is a form of ownership available to married couples).

12. Do not rashly call and cancel the contract with your contractor, because you could be sued for breach of contract.

13. Know whether your contract has an arbitration and/or mediation clause.

Quite frankly, the more legwork the client does, the less expensive the legal bills. I ask clients to e-mail me their chronologies so I do not have to start from scratch. So, do your homework before calling an attorney, and you will find that your lawyer will be able to offer you more helpful, clear cut advice from the beginning.

Reddish v. Bowen-Contractors Beware!

2007-06-18T02:01:00.000-04:00

I have promised to post about some important home contractor cases in Massachusetts, and the Reddish case was decided in June 2006. In Reddish, the contractor installed a pool and violated a six-foot side lot setback requirement contained in a local zoning by-law. The court held that this was a violation of the Home Improvement Contractor law in Massachusetts that states that contractors must comply with the building laws, and therefore a violation of the Consumer Protection act, as well.

The important point to note about this case is that the contractor relied on the homeowner's statement that the property line was at the location of a fence, when in fact, it was not. The contractor deviated from the plans based on the homeowner's "say so," and was then held accountable for this error and was forced to pay the plaintiff's attorney's fees as a result. Therefore, contractors should beware, and make sure that the property has been properly surveyed, that the plans are accurate, and that they do not deviate from the plans without verifying that there work will not violate any laws.

Residential Building and Landscaping: High Hazard Industries

2007-06-17T22:36:00.000-04:00

Another post by Jerry Soloman, OSHA attorney:

Industries are recognized and treated by OSHA as “High Hazard” if their injury rates per 100 workers are higher than the norm. Residential construction and Landscaping are among the industries with the worst injury rates. That is one reason why OSHA has targeted residential building for special emphasis and a greater number of inspections.

Last year OSHA made around 1360 inspections of residential building contractors in about 25 states controlled by federal OSHA. They issued fines totaling over $3.2 Million. The most frequent citations were for fall protection; scaffolds; ladders; head protection; hazard communication and electrical. It is hard for a residential builder to follow all the rules and still make money on a job. But think about thousands or even 10s of thousands of dollars in penalties if OSHA catches up with you.

Even worse than an OSHA inspection and fine, what if someone gets hurt or killed on your jobsite? It happens more than you think it might. Since last October in New England 9 workers have died under conditions that could exist at any home construction site.

Fatal Facts

2 workers on an aluminum pump jack were electrocuted, one fatally, when a long piece of aluminum fascia blew into contact with a power line. In another fascia accident an employee was killed as he was trying to install a cap on a brick fascia when his step ladder tipped sideways and he fell from the roof of a 2-story building. Another employee installing a roof on a private residence fell to his death, and yet another fell and died while cleaning gutters. There were 3 other roofing-related fatalities involving falls including a company owner who fell 12 feet while stepping on to a scaffold without fall protection. It only takes an instant to lose your footing. Roof work is dangerous. Respect that danger and protect employees from falls.

Landscaping presents its own problems. A worker using a self-propelled lawn aerator was killed when he was pinned between the machine and a window-mounted air conditioner. Bobcat-related fatalities are not uncommon. One landscape employee was killed recently when his machine flipped on an incline. The operator was ejected and then the machine rolled on top of him. Most old-school guys will laugh at it, but Bobcat operators are required to wear seatbelts.

Nail Guns

In 2005, 28,600 workers were treated in emergency rooms for nail gun injuries. Over 1700 of them required further hospitalization or treatment. Make sure workers using nail guns are trained in the proper usage and safety features. Don’t by-pass safety features for speed. Manual triggers with nose-contact devices are there for safety purposes. Sequential-trip triggers also make accidental discharge less likely. Protect workers, avoid job losses that happen when someone is injured, and keep your workers comp costs down by using appropriate safety devices on nail guns.

Jerry Solomon
Law Office of Jerrold Solomon
617-244-7345

Home Contractor Problems-What to Do Before You Call a Lawyer

2007-05-29T21:56:00.000-04:00

Today I was speaking with a potential new client, and it occurred to me that many homeowners have no idea what to do when they have problems with a contractor. They feel helpless as the contractor has control over what is happening to their home, and they do not know how to deal with the situation when a contractor is doing poor quality work.

There are some things a homeowner can do that will help a lawyer understand the details of the situation. First of all, if there have not been any inspections done, the homeowner should call the local building inspector and ask him or her to come and evaluate the work. If work is not up to code, that strengthens the homeowner's case and let's him know if work needs to be re-done.

In addition, the homeowners should call contractors to come and give quotes for the cost of completing the job. This is one way of determining the amount of damages, and helps a lawyer decide the right approach to the claim. If a job was supposed to cost $100,000 originally and the homeowner has paid $90,000, and a contractor gives a quote of $40,000 to complete the work, the claim would be for $30,000 (forty thousand less the ten thousand not yet paid).

Clearly new contractors frequently criticize the work that was done previously, but this is why it is a good idea to get two or three quotes. When more than one person states that quality is poor, and work needs to be re-done it bolsters a claim against the contractor.

Once the homeowners are armed with information, they will feel more empowered and ready to deal with the problem. Having an outside party verify one's sense of the situation is a good way to start.

Then, find a lawyer who is familiar with these kinds of cases, and discuss your options.

Landscape Design and Construction - How to Work with a Design Professional

2007-05-29T21:47:00.000-04:00

Here is a guest post from Michael Radner, Landscape Architect:

There are many reasons to improve the landscape around us. Many studies have determined that shoppers spend more time and money in stores shaded by street trees. Property values of single family or multi-family homes are as much as 15% higher when they are set in well-designed, well-maintained landscapes. Test scores go up when school classrooms have visual access to trees and open space. The mental and physical health benefits of healing gardens in hospitals is well documented, and even crime is reduced in neighborhoods planted with trees.

Yet many home and business owners don’t know how to get started when the need or desire for landscape improvements hits. There are three basic options for those who don’t want a “do it yourself” job.

1. Hire a “Design/Build” company to take you from design through construction. This is an attractive option, as it gives the consumer or builder a one stop shop for services. These are primarily landscape construction companies that employ landscape designers or landscape architects on staff, or on a consulting basis. The company may charge a nominal fee, or nothing at all for design services if you contract with them through construction. In reality, one pays for the design through increased construction fees, so despite appearances you may not be saving money. The company’s motives are obviously to maximize profits and sell more landscaping, not necessarily to look out for the owner’s best interest. On the plus side, the owner can potentially save valuable time by hiring design and construction services at once, cutting out the time for bidding and hiring a General Contractor. A good Design/Build firm will also provide insight into the construction process early on, saving time, money, and aggravation later.

2. Hire a landscape designer for design services. Landscape Designers come in many shapes and colors. Many are quite talented, have years of design experience, a degree or certificate in landscape design, beautiful portfolios and many happy customers. I find that landscape designers are more comfortable with smaller residential projects versus larger luxury residences or commercial projects. Many other providers may not have the prerequisite training or experience to provide the proper services that will protect the health, safety and welfare of their clients, and the public. There are no state laws or statutes that govern the practice of landscape designers. Make sure you check their credentials and speak with former customers before hiring them.

3. Retain a Landscape Architect for design services. LA’s are registered professionals, exactly like Architects and Engineers. They have a duty under law to provide for the health, safety and welfare of their clients and the public. The vast majority of LA’s are degreed professionals, with Bachelor’s or Master’s Degrees in their field. They are also covered by professional liability insurance, commonly known as “errors and omissions” insurance. This is not always indicative of the quality of the design work, but does ensure a minimal degree of professional competency through the completion of licensure (which is achieved through several years of apprenticeship and a rigorous, multi-day written exam). LA’s are typically involved in larger residential sites, and commercial or civic projects such as multi-family developments, parks and recreation facilities, or retail sites. As such, they will be familiar with local and state environmental statutes that may impact construction, and can guide the client through any permitting processes. They also are used to working with allied professionals, such as Architects, Civil, Structural and Environmental Engineers. LA’s will usually have ASLA or RLA after their name, indicating membership in the American Society of Landscape Architects, or “Registered Landscape Architect”.

Of course, when hiring any design professional or contractor, check references, licensure and the State for any complaints.

Radner Design, Inc.
215 Boston Post Road, Sudbury, MA 01776
ph: 978.443.9679 fax: 978.443.4636
e: mradner@radnerdesign.com
web: www.radnerdesign.com

Suing a Builder in Massachusetts

2007-05-12T17:29:00.000-04:00

Most of the posts from the homeowner side in this blog involve renovations or additions. As such most of these disputes involve contractors who are covered by the Home Improvement Contractor Law, or M.G.L. (Massachusetts General Laws) c. 142A. What should a homeowner do, however, if he or she is involved in a dispute with a builder?

As I have said so many times before, a good contract should actually prevent disputes and spell out the procedure for dealing with problems before they arise. Unfortunately, builders and homeowners alike often undertake large projects without consulting with a lawyer (who focuses on these things) and they then suffer the consequences when a disagreement occurs.

If homeowners develop problems with their builders, they should start off with a demand letter outlining the problem, and the solution that they would prefer. If the claim is in Massachusetts, the demand letter should be under the Consumer Protection statute.

If the issue cannot be resolved, then the parties can consider mediation, arbitration or ultimately filing suit. A lawsuit should always be the last resort. Lawsuits are expensive, time-consuming and emotionally draining. If a lawsuit is going to be filed, then one has to make sure that a judgment would actually be collectible by securing an asset (an attachment of real estate for example) in advance, if possible.

As always prevention is the best alternative. Doing one's homework by finding a good builder (the Builder's Association of Greater Boston-BAGB-www.bagb.org), drafting a good contract and keeping the lines of communication open will make for a positive experience.

The Blue Book-Contractors and Subcontractors

2007-05-12T16:57:00.000-04:00

I recently attended the annual showcase event sponsored by The Blue Book, where contractors and subcontractors can meet and exchange information. The Blue Book is really a book, that lists tradespeople by their professions (including lawyers) and is a great resource for finding help when needed.

The event was quite lively and well-attended, and numerous types of companies were represented. For example, there was a construction company whose specialty is constructing dentists' offices.

These companies do all kinds of construction, from commercial to residential to renovations. So the next time you are looking for a subcontractor, check out The Blue Book.

Here is the website: http://www.thebluebook.com

Massachusetts Contractors-Beware!

2007-05-02T00:07:00.000-04:00

It is only natural for a contractor to want to get paid for his or her hard work on a project. When a homeowner refuses to pay, it can be for any number of reasons, and they are not always reasonable. The homeowner may expect extras to be thrown in without additional cost, or may have standards that are unrealistic. He or she may also not recognize that reasonable delays occur. In any event, contractors will frequently decide to sue homeowners after trying to collect.

However, in Massachusetts, contractors run a huge risk by filing suit. Unless their contracts are in compliance with the Massachusetts Home Improvement Contractor Law, they may be exposed to liability under the Consumer Protection Act, M.G.L. c. 93A. This could subject the contractor to double or treble damages, attorney's fees, interest and costs. So, contractors should make sure, in advance, that they are properly registered, and that their actions are in compliance with the law. In addition, they should have their contracts reviewed by an attorney and make absolutely sure that they are as protected as possible.

This is one area in which it is well worth the expense to have a lawyer review one's paperwork. It could help prevent a major loss in the future.

The Change Order

2007-04-21T22:47:00.000-04:00

I once had a construction lawyer say to me, "If there were one thing I would say to both contractors and homeowners to prevent problems during construction projects, it would be, 'All change orders should be in writing!"

One day, I will go through my active cases and figure out how many of the disputes could have been prevented if the parties were to follow that rule. Homeowners frequently believe that items are included or will not cost extra. Contractors submit bills after the fact for "extras" that were unanticipated. Then the misunderstandings occur.

Change orders should include a full description of the new work to be done, the types of materials to be used, and how the change will affect the expected completion date. They should spell out the additional price for labor and materials. Finally, they should be signed off on by all parties. If subcontractors are to be used to affect the change orders, I would note that down as well.

It does not imply distrust to write down the agreement between the parties. Instead, it enourages clear-cut communication and prevents problems. So, make sure that you spell out all change orders to keep the project running smoothly.

OSHA and the Home Improvement Contractor-- Part 2

2007-04-15T16:26:00.000-04:00

Maybe home improvement workers are immortal. Look at the attached photo. These guys are on the third floor. Maybe they are not affected by gravity. If you cannot spot OSHA violations in this picture, you need to get some training.

Protection against falls is something OSHA emphasizes all the time. It is one of their biggest concerns. They look for fall hazards on every construction inspection, and they almost always find them. Between October 1, 2006 and January 31, 2007 8 workers died from falls in New England. Violations of fall–protection rules are among those most frequently cited by OSHA for residential construction.

One worker fell to his death while cleaning gutters. 4 workers died in separate incidents while performing residential roofing work. In one recent fatality a worker fell 2 stories from a roof when his step ladder slipped. (Did you notice the unopened step ladder in the photo? It was used for access to the roof. It is very unstable when used folded up. It would not take much for it to slip sideways.)

For residential construction there is a 6-foot fall rule. Every employee who is engaged in activities that are 6 feet or more above a lower level must be protected against falls by guardrails or a personal fall arrest system (harness and lanyard attached to an anchor capable of holding 5000 lbs.) or some other means. If it is not feasible to use conventional fall protection, and you can prove it, you can use your own fall protection plan instead.

“Be careful!” is not a fall protection plan. You need to really think it through. You need to train workers and make sure they follow the rules. There are detailed regulations about what a plan must include. You can find the basic rules for fall protection at 29 C.F.R. 1926.501. The specific rules for residential construction are under 1926.501(b)(13). The rules for developing a fall protection plan are at 1926.501(k).

Get to know these rules and follow them. It will save you grief with OSHA. More importantly, it might save the life of an employee or a good buddy.

Jerry Solomon
Law office of Jerrold Solomon
617-244-7345
http://www.oshastrategies.com/

The Home Improvement Contractor Arbitration Program

2007-04-06T14:05:00.000-04:00

In Massachusetts, the state runs a Home Improvement Contractor Arbitration Program that gives homeowners and contractors an alternative to filing suit when a dispute arises. This program has many advantages. For one thing, the cost of filing for arbitration is generally less expensive than filing suit. Once the application is filed, the state oversees the process, and it is usually fairly efficient. Unlike litigation, there is usually little discovery (the exchange of information) which allows the parties to control costs. The program allows for a half-day hearing, and the arbitrator can opt to make a site visit. The arbitrator is also authorized to award double or triple damages and costs under M.G.L. c. 93A.

The arbitrator cannot award attorney's fees. The arbitrator's award is appealable (unlike most arbitrations), and the parties are entitled to a new trial if the decision is appealed. All findings of fact issuing from arbitration shall be taken as prima facie evidence in any subsequent appeal. This means that the court will consider the arbitrator's findings when making a decision.

The program can only be utilized by either party if the contractor is registered and was hired to hired to perform home improvements on a 1-4 unit, owner-occupied residence. The contractor must have pulled the permit(s) as well.

The Arbitration Clause and the Contractor

2007-04-06T13:48:00.000-04:00

In Massachusetts, the homeowner has a presumptive right to pursue his or her claim through the Home Improvement Contractor Arbitration Program. However, if the contractor wants to go through the arbitration program, he must insert a clause in his contract that states that he is entitled to do so. The state of Massachusetts has a model home improvement contract on its website, and there is a sample clause that most contractors insert in their contracts. It states as follows:

The Contractor and Homeowner hereby mutually agree in advance that in the event the Contractor has a dispute concerning the contract, the Contractor may submit such dispute to a private arbitration service, which has been approved by the Secretary of the Office of Consumer Affairs and Business Regulations. The consumer shall be required to submit to such arbitration as provided in M.G.L. c. 142A.

Most contractors think that this clause would require the homeowner to go through arbitration if they have a dispute. I recently had a case however, where the homeowner filed suit, and I filed a motion to compel arbitration. The judge did not agree with my argument, and said that the clause only applies where the contractor initiates arbitration, and it does not prevent the homeowner from filing suit.

So contractors need to consider re-writing their contracts if they want to require homeowners to proceed to arbitration in the event of a dispute.

Your Neighborhood Contractor

2007-03-25T23:23:00.000-04:00

Today I heard about a contractor who had been hired by various neighbors. The contractor had abandoned one job while continuing to work at the other. A couple of weeks ago I met a homeowner who hired a contractor because many of the neighbors were happy with him. Now he says he wished that he had asked that contractor the right questions.

So, what are the right questions? Here are ten questions to ask your contractor, even if he or she comes highly recommended:

1. Have you ever done this particular type of work before?

2. Can you give me references of homeowners for whom you have done this kind of work?

3. What is the largest job you have ever handled?

4. How many jobs do you work on at one time?

5. If I accept your proposal, how many jobs will you be working on while you are doing my job?

6. How many people are in your crew?

7. How often will you personally be at the job site?

8. Who will be in charge when you are not at the job site, and will he/she have the authority to make decisions?

9. Will you give me your cell phone number or a time when you will be reachable during the week?

10. Are your subcontractors readily available for work on my job, or will there be delays because they are overbooked?

The Guaranty Fund and Bankruptcy

2007-03-21T23:35:00.000-04:00

A colleague recently sent me the following information about the Guaranty Fund:

"A homeowner who is precluded by the Bankruptcy Court from pursuing legal action against the contractor may still be eligible for compensation from the Guaranty Fund.The homeowner can file a Request for Special Access to the Guaranty Fund. To receive this application, call the Office of Consumer Affairs at 888-283-3757. The application must be submitted to the Office of Consumer Affairs and Business Regulation within two years and six months of the contract date. Special Access to the Fund only applies if the contractor's debts have been discharged and the bankruptcy case is closed."

However, this option is no longer available. Even if the contractor files for bankruptcy, the consumer must obtain a judgment in order to collect from the Guaranty Fund. I just filed a case against a contractor and he filed for bankruptcy. As a result, I have to file a motion with the bankruptcy court in order to continue with the case against the contractor and obtain the judgment.

It is unfortunate that my client has to spend the funds to obtain the judgment, but that is currently what is required. It is still worth it for the client to obtain the $10,000.00 from the Guaranty Fund.

Please keep in mind that I am not a bankruptcy attorney, and I am not able to give advice regarding bankruptcy law.

OSHA and the Home Improvement Contractor

2007-03-16T19:01:00.000-04:00

A colleague, Jerry Solomon, offers the following advice:

All you have to do is look around you, in the city and the suburbs, to see that many home contractors have little concern for following OSHA rules to protect their employees. You see Mickey Mouse scaffolds, employees working at heights without fall protection, workers riding in the backs of pickups or on backhoes, aluminum ladders near electrical lines, excavations with no cave-in protection. You can’t see it, but it is probable also that many workers on home-building or renovation projects are wrongly treated as if they are independent contractors. The prudent contractor will begin to get his act together.

Contrary to some beliefs and wishes, residential construction is covered by OSHA. Every contractor with an employee is covered. If you are incorporated, you have an employee, even if it is just yourself.

Among the highest hazard industries that OSHA tracks are residential building, and landscaping. So OSHA has targeted residential construction for special attention. It is their belief that workers in residential construction deserve a safe workplace. Every OSHA office in Massachusetts has a Local Emphasis Program for Residential Construction.

Here is the scary part. They are trying to enlist local building inspectors to be on the lookout for builders who don’t follow OSHA’s rules. OSHA is training them. Don’t be surprised if a local inspector refuses to inspect your framing or whatever if he has to climb more than 4 stairs without a handrail.

Learn the rules. An OSHA citation and fine could eat up all of your profits.

Jerry Solomon
Law office of Jerrold Solomon
617-244-7345
www.oshastrategies.com

Construction and Property Damage

2007-03-15T18:14:00.000-04:00

I recently acquired new clients who sustained severe property damage to their home. The insurance companies are denying their claims and they are quite frustrated in trying to get reimbursed for their damages. The main problem in proving their damages is that they are having trouble proving that the damages that occurred as a result of the other parties' actions. Hindsight is a wonderful thing, and the clients wish that they had taken pictures and documented the condition of the house before the work started.

This made me realize that it is in a homeowner's and the contractor's best interest for the parties to document the condition of the house before work begins. In landlord-tenant law, the landlord is required to provide the tenant with a "Statement of Present Condition" in order to collect on the security deposit if there are damages at the end of the tenancy. If a homeowner is going to make claims against a contractor, it would be worthwhile to establish the condition of the premises at the beginning, so it will be easier to prove new damages later on. The homeowner should therefore take some pictures, and do a walk through with the contractor and note down problematic areas before the work begins That way, the contractor will be protected from unfair claims as well.

The Home Contractor and Workers' Compensation Insurance

2007-02-22T23:01:00.000-05:00

In Massachusetts, all employers must maintain workers' compensation insurance for their employees. This protects the employer if an employee is injured on the job, and it protects the employee as well. For the homeowner, it is imperative that a contractor maintain workers' compensation insurance for his employees. If the contractor does not maintain a policy, then an injured worker may try to show negligence on the part of the homeowner.

I am not an expert on workers' compensation insurance, but I share an office with an attorney who specializes in this area. Her name is Joyce Davis, and her website, http://www.joyce-davis.com, provides excellent information about this area.

As a homeowner, I would require that a contractor provide me with a copy of his certificate of insurance. A contractor should require the same from subcontractors. This simple step can prevent disastrous consequences down the road.

The Guaranty Fund

2007-02-08T22:22:00.000-05:00

Massachusetts has a wonderful resource for homeowners who have obtained judgments against contractors. If the contractor does not pay the judgment after the homeowner makes a reasonable effort to collect, or if the contractor flees the jurisdiction or the contractor files for bankruptcy, the Office of Consumer Affairs and Business Regulation (OCABR) administers a fund that will pay up to $10,000.00 of the homeowner'(s) damages. The homeowner must apply for the fund within six months of obtaining a judgment. For some homeowners, this will fully satisfy their claim. For others, it will help cover the cost of litigation. Once the money is paid out from the fund, the OCABR goes after the contractor for reimbursement. Check in your state to see if this type of resource is available.

More Violations of the Massachusetts Home Improvement Contractor Law

2007-01-23T23:41:00.001-05:00

Massachusetts Attorney General: Full Article http://www.ago.state.ma.us/sp.cfm?pageid=986&id=1684
1 of 1 1/23/07 9:19 AM
Home Page > Media Center > Full Article
FORMER NORTH ANDOVER MAN FACES 95 INDICTMENTS
INVOLVING VIOLATIONS OF HOME IMPROVEMENT
CONTRACTOR LAW
June 21, 2006
CONTACT: BETH STONE
(617) 727-2543
BOSTON -- A former North Andover man who operated a now defunct sunroom installation company has been indicted on charges
he violated the home improvement contractor statute in his dealings with 32 homeowners from across the state, Attorney General
Tom Reilly announced today.
James Brien, 56 years old, formerly of North Andover was indicted by an Essex County grand jury on one count of larceny by false
pretenses and 94 counts of violating the Home Improvement Contractor Statute. He is scheduled to be arraigned on July 6, 2006 at
Essex Superior Court in Salem.
Brien was the president and owner of North Andover-based American Sunroom Co. Inc., a sunroom installation business he
operated for approximately 14 months.
The indictments allege that Brien violated the Home Improvement Contractor statute in three different ways.
First, the indictments allege that Brien breached contracts he entered into with 30 homeowners by failing to deliver and install the
sunrooms homeowners ordered through Brien's company. Under the Home Improvement Contractor statute, it is a crime to
breach a contract without justification.
Second, the indictments allege that Brien violated the Home Improvement Contractor statute by failing to include in contracts with
32 homeowners the dates on which he was going to start and complete the installations of the sunrooms they ordered.
Finally, the indictments further allege that Brien violated the Home Improvement Contractor statute by failing to include in 32
contracts the information that contractors and subcontractors must be registered and information on how homeowners can check a
contractor's registration status.
Defendants are presumed innocent until proven guilty.
Assistant Attorney General Beth Merachnik of AG Reilly's Criminal Bureau is prosecuting the case, which was investigated by State
Police and the Financial Investigations Division, also of AG Reilly's Criminal Bureau.
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Violations of Massachusetts Home Improvement Contractor Act-Criminal Penalties

2007-01-23T23:38:00.000-05:00

Massachusetts Attorney General: Full Article http://web.archive.org/web/20041215000150/www.ago.state.ma.us/s...
1 of 2 1/23/07 10:10 AM
Home Page > Media Center > Full Article
WATERTOWN CONTRACTOR PLEADS GUILTY TO VIOLATING
HOME IMPROVEMENT CONTRACTORS ACT
Contractor to pay restitution of $14,100 to 12 consumers
May 5, 2003
CONTACT: BETH STONE
(617) 727-2543
BOSTON -- A Watertown man has pleaded guilty to multiple home improvement contract violations in connection with work done for 12
consumers from April 2000 through May 2001, Attorney General Tom Reilly announced today.
James Pallone, 46, of Watertown, pleaded guilty to 12 counts each of operating as a home improvement contractor without certification,
requiring a deposit on a home improvement contract in excess of that permitted by law, and failing to specify start and completion dates
on a home improvement contract. Middlesex Superior Court Judge Elizabeth Donovan sentenced Pallone to serve probation of five years
and pay restitution of $14,100 to be paid within the first year of probation. As part of today's sentencing, Pallone also was barred from
doing any work that would require a supervisor's license in Massachusetts for five years.
Pallone operated Middlesex Contractors, a landscaping, masonry and general home improvement business. Pallone consulted with
consumers and offered estimates on jobs before a contract was signed.
The investigation found that between April 2000 and May 2001, 12 separate victims contracted Pallone to do various improvement jobs
ranging in price from $2,000 up to $60,000, on their homes. The work Pallone was contracted to perform for the consumers falls under the
Massachusetts Home Improvement Contractors Act and therefore required Pallone to have a license. Pallone was not licensed to perform
home improvement contracting work, as required under the law.
Consumers signed contracts drawn up by Pallone that did not list start and completion dates for the home improvement jobs, as is
required by Massachusetts state law. Pallone also required that customers pay approximately half of the contracted price up front, a
violation of Massachusetts state law which requires only 1/3 of the total be paid ahead of construction.
Victims who contracted Pallone's services are from Arlington, Belmont, Newton, Waltham, Watertown and Weston.
Consumers with questions about home improvement contractors should contact the Attorney General's Consumer
Hotline at (617) 727-8400.
Assistant Attorneys General Madeline Leone and Kathy Chen, both of AG Reilly's Corruption, Fraud and Computer Crimes Division
prosecuted the case, which was investigated by State Police assigned to the Attorney General's Office, Investigator Ashley Dizel of AG
Reilly's Public Protection Bureau and Investigators Paul Stewart and Jon Murphy of AG Reilly's Financial Investigations Division.
Massachusetts Attorney General: Full Article http://web.archive.org/web/20041215000150/www.ago.state.ma.us/s...
2 of 2 1/23/07 10:10 AM
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More Contract Clauses

2007-01-23T10:22:00.000-05:00

In my last post, I included some clauses for consideration when putting together a contract for a renovation project.

These clauses are in no specific order, but all offer additional protection for both parties:

1. PEOPLE AUTHORIZED TO MAKE DESIGN DECISIONS AFFECTING THE COST OF THE WORK: The following people are authorized to make design decisions which affect the Cost of the Work: _____________________________________ _____________________________________ (Please fill in line(s) above at time of signing Agreement)

2. CONFLICT OF DOCUMENTSIf any conflict should arise between the plans, specifications, addenda to plans, and this Agreement, then the terms and conditions of this Agreement shall be controlling and binding upon the parties to this Agreement.

3. MATCHING EXISTING FINISHESWhere Contractor's work involves the matching of existing finishes or materials, Contractor will use his best efforts to match existing finishes and materials. However, Contractor does not guarantee an exact match due to such factors as discoloration due to the aging process, difference in dye lots, and difficulty of exactly matching certain finishes, colors, and planes.

4. OWNER’S SEPARATE CONTRACTORS: Contractor to supervise, coordinate, and otherwise specified charge 20% profit and overhead on Owner's separate Subcontractors who are working on site at same time as Contractor.

5. CONTRACTOR NOT TO BE RELIED UPON AS ARCHITECT, ENGINEER, OR DESIGNER:

Contractor is not an architect, engineer, or designer. Contractor is not being hired to perform any of these services. To the extent that Contractor makes any suggestions in these areas, Owner acknowledges and agrees that Contractor’s suggestions are merely options that Owner may want to review with the appropriate design professional for consideration. Contractor’s suggestions are not a substitute for professional engineering, architectural, or design services, and are not to be relied on as such by Owner. Contractor is not responsible for ascertaining whether details in Owner’s plans conform to all applicable building and planning codes. Contractor is not responsible for the cost of correcting errors and omissions by Owner’s design professionals and separate contractors.

6. INSURANCE Owner shall pay for and maintain “Course of Construction” or “Builder’s Risk” or any other insurance that provides the same type of coverage to the Contractor’s completed work and work in progress during the course of the project, including profit and overhead. It is Owner’s express responsibility to insure dwelling, all materials delivered to the worksite, and all work in progress against all damage caused by theft, vandalism, fire and Acts of God such as earthquakes or floods. Owner shall increase insurance on property to reflect the value at completion of project. Owner shall name Contractor as a “loss payee” on the homeowners policy. Owner shall provide Contractor with a property binder or a certificate of property insurance.

7. ENTIRE AGREEMENT, SEVERABILITY, AND MODIFICATION This Agreement represents and contains the entire agreement between the parties. Prior discussions or verbal representations by the parties that are not contained in this Agreement are not a part of this Agreement. In the event that any provision of this Agreement is at any time held by a Court to be invalid or unenforceable, the parties agree that all other provisions of this Agreement will remain in full force and effect. Any future modification of this Agreement must be executed in writing in order to be valid and binding upon the parties.

8. ADDITIONAL LEGAL NOTICES REQUIRED BY STATE OR FEDERAL LAW

REGISTRATION: All home improvement contractors and subcontractors shall be registered. Any inquiries about a contractor or subcontractor relating to a registration should be directed to: Director, Home Improvement Contractor Registration One Ashburton Place Room 1301, Boston MA 02108Tel: (617) 727-8598 (This is required in Massachusetts-check your state laws).

The Contractor-Finding the Right Contract

2007-01-16T09:47:00.000-05:00

I have discussed contracts frequently on this blog because they offer the best protection to both the homeowner and the contractor when commencing a renovation project. There are some excellent samples of contracts to be found, and like any document, they can always be improved. The Office of Consumer Affairs and Business Regulation in Massachusetts offers one online that is in compliance with our state's laws. The link is:

http://www.mass.gov/Eoca/docs/sampcont.pdf

Recently, a contractor-colleague asked me to review her contract. It was quite good, but I suggested the following clauses. Please keep in mind that these are in no specific order, but address problems that might arise throughout the course of the project.

1. Here is an example of a payment schedule. You need to include the information about the deposit not being more than 1/3, and the final payment not being paid until the work is done to the mutual satisfaction of the parties:

PAYMENT SCHEDULE AND PAYMENT TERMS

PAYMENT SCHEDULE:
First Payment: $ **** or ** % of contract amount due when Agreement is signed (not to exceed 1/3 of the contract price or the cost of special order items, whichever is greater): $ ****
Second Payment due +++++++++++++++++++++++ : $ ****
Third Payment due +++++++++++++++++++++++ : $ ****
Fourth Payment due +++++++++++++++++++++++ : $ ****
Fifth Payment due +++++++++++++++++++++++ : $ ****
Sixth Payment due +++++++++++++++++++++++ : $ ****
Final Payment: Balance of contract amount due upon completion of all work under contract done to the mutual satisfaction of the parties: $ ****

NO FINAL PAYMENT CAN BE DEMANDED UNTIL THE CONTRACT IS COMPLETED TO THE SATISFACTION OF THE PARTIES THERETO.

*Interest in the amount of 1% per month will be charged on all late payments under this ……………Agreement. “Late Payments” are defined as any payments not received within 7 days ……………of receipt of invoice from Contractor.

I also like the following provisions, but they are not required:

2. CHANGES REQUIRED BY PLAN CHECKERS OR FIELD INSPECTORS: Any increase in the Scope of Work set forth in these Contract Documents which is required by plan checkers or field inspectors with city or county building/planning departments will be treated as Additional Work to this Agreement for which the Contractor will issue a Change Order.

3. DELAY DAMAGES: If there is an increase in the cost of materials of 10% or more due to the delay of the homeowner, this increase will result in an automatic change order that will be charged to the client. Contractor will make every effort to keep costs within budget.

4. PERMIT NOTICE
It shall be the obligation of the Contractor to obtain permits as the owner's agent. The cost of permits is the responsibility of the owner and is included in this contract price. Owner' who secure their own construction-related permits or deal with unregistered contractors shall be excluded from access to the Guaranty Fund provided by the State of Massachusetts. The following construction-related permits are required:
1. Building Permit
2. Plumbing Permit
3. Electrical Permit
4. Other: ___________________________

I will include more contract clauses in my next post.