If your contractor has fouled up your home improvement job, delivered poor work or disappeared altogether, you have recourse.
We all know that remodeling can be a hassle. But occasionally a construction project turns into a total disaster and you end up at odds with your contractor -- even though you thoroughly vetted the contractor and the remodeling contract before signing. Shoddy workmanship, unexplained delays, and amenities that never get installed can lead to frustration and anger.
Don’t get mad; get motivated to defend yourself. Here’s how.
Fire the Contractor
Firing your contractor may seem obvious, but it's not an easy step when things go seriously wrong. Your contractor could challenge the firing in court as a breach of contract: You must show that he breached the contractor agreement first.
Document each time the contractor doesn’t live up to the specifics of the contract, such as substituting inferior materials or failing to stick to the schedule. Then send a return-receipt letter to her business and home address stating that unless the problem is rectified within a specified number of days, she's in breach of contract, and you'll be terminating it.
The catch: A contractor probably won’t refund money you’ve already paid. If you’ve written any checks up front, this tactic can be costly.
Request a Hearing
Some construction contracts include a binding arbitration clause, where parties agree to resolve disputes by arbitration rather than in court. Arbitration is a relatively low-cost process in which each side presents its case to an independent authority, who makes a final decision.
Even if your contract has no such provision, you can request a similar hearing. The Better Business Bureau, a national nonprofit association, offers mediation services for free or for a nominal fee of around $50. Neither the homeowner nor the contractor needs to be a member of the organization.
- You must get the contractor to agree to mediation. (Good luck!)
- Mediators and arbitrators look to the contract for guidance. If you have a badly written one, you may be out of luck in mediation.
Hire an Attorney
Hire a construction attorney who knows the ins and outs of state statutes and can find weaknesses in the contract. Unlike Better Business Bureau hearings, the contractor can’t opt out of a lawsuit.
If the contractor has disappeared altogether, you may be able to collect money from a state contractor recovery fund consisting of contractor licensing fees, or from a bond the contractor posted at the start of your project, which is required in some states.
The catch: Attorneys charge $100-$300 per hour for these cases. So unless you’re dealing with a big-ticket project, you’ll likely spend more on the attorney than you will collect from the contractor.
Take Your Case to Small Claims Court
In small claims courts, you represent yourself and pay just a few dollars to bring a case. The rules depend on your local jurisdiction, but typically a judge hears from both parties, asks questions, and then resolves the issues.
The catch: Small claims are just that. In most places, award limits range from $3,000-$7,500. For example Kentucky has one of the smallest awards, capped at $2,500; in parts of Tennessee it's highest, with a max of $25,000.
File Complaints and Bad Reviews
A slew of websites allow you to post information about bad contractors, including Angieslist.com and Franklinreport.com (for certain cities). You can also file a complaint with your state contractor licensing board, which could make the information public if it receives enough complaints. (Search online by “contractor licensing board” for your state.)
These steps won’t fix your crooked tile, but you may take comfort in knowing that you’ve protected a fellow homeowner from the same fate.
The catch: A contractor could sue you for libel over a bad review. State laws vary, but truth is a strong defense, says Atlanta attorney Alan Begner, a board member of the First Amendment Lawyers Association. Still, a big contractor with deep pockets could force you to spend tens of thousands in your own defense.
To decide how -- and whether -- to go after your contractor, ask a construction attorney to review your situation. You’ll pay between $500-$1,000 for a consultation, but you could save far more money (and aggravation) in the long run.
Source: "How to Deal With a Bad Contractor"