This article walks through various options to help homeowners effectively deal with difficult contractors and realign home improvement projects that have gotten off track.
How Quickly Renovations Can Turn For The Worst
Here is a story to set the stage on how renovation projects and contractor relationships can deteriorate. Dijana Kambic, a woman in Ontario, Canada, continues to suffer through a never-ending renovation nightmare involving her bathroom remodel gone terribly wrong. After sustaining enduring spinal cord damage from a car accident, she contracted with Home Depot to install a $27,000 accessible bathroom that would aid her rehabilitation efforts.
What ensued has been a five month long ordeal that continues, as of the posting of this article. The main setback was major water damage that was caused by Home Depot’s subcontractor. Since then, Home Depot and their subcontractor have been pointing fingers at each other, while the bathroom situation has remained unfinished and unresolved. The full story can be read here: Car Crash Victim Says Home Depot Botched $27K Bathroom Renovation.
Though this story may seem a bit extreme compared to most home improvement projects, it should serve as a reminder how quickly and seriously circumstances can turn for the worst. So what happens when your dream renovation becomes an unpleasant experience or worse? What options do you have to cancel? How do you deal with difficult contractors, with whom you are at odds? How do you begin the process of rectifying the situation? When is litigation your only recourse?
Remember That You Are Not Alone
Keep in mind that you are not alone, as this is an all-too common issue, especially with larger renovation projects. Proactive and clear communication, especially in written form, can work wonders, however.
Prevent Issues Upfront with a Strong Contract
Sadly, in the majority of cases, the best relationship you will ever have with a contractor is before you sign the project contract. As we have stated many times, the message is still very clear: “Begin every renovation project with a strong, clearly defined contract that protects you, the property owner”. Make sure that you have provisions for the following:
- Job Abandonment
- Dispute Resolution
- Penalty Clauses for Delays
- Poor Workmanship
- Non-Performance; and
- Termination Clause
For more details, read The Essential Elements of a Home Renovation Contract.
Resist Making Any Oral Agreements & Decisions, Big or Small
Resist the urge to enter into oral agreements at any stage of the project, as this will prove to put you at a disadvantage should a dispute ever arise. This also includes oral confirmation of decisions. Any verbal decisions should always be followed with prompt written confirmation, either by email, text, or signed addendums.
If you end up in litigation regarding any issues, a written contract will allow you to prove, undeniably, the existence of the agreement, as well as the detailed rights and responsibilities of each party. Written correspondence, like text messages, can also corroborate mutual expectations for matters lacking sufficient detail in the contract.
If you really want something specific, always document this in the contract accordingly. Things that you “hoped” to get, that were not documented, will very likely not be done, without a change to the contract. What’s more, these types of changes will often incur additional cost.
Leverage Buyer’s Remorse Cancellation Protection
Should you discover information that makes you uneasy, or if you have second thoughts about the contract you have just signed, many states offer property owners a right to rescind. This is also referred to as a “cooling off” period, which is typically three to five days from the date of signing. During this period, a consumer can cancel a contract for any reason by sending the contractor a written cancellation notice.
Each state has its own methods of official cancellation and qualifying circumstances, so be sure to check your specific state laws. Those states that have upfront cancellation rights typically require licensed contractors to inform customers of this right in written form. Any contractor that ignores this requirement, when mandatory, is a major red flag and you should seriously consider walking away, before signing any agreements.
Keep the Relationship from Becoming Stressful
Always strive to keep the relationship from heading down the wrong path into something regrettable. Make sure that lines of communication are clear between you and the general contractor at all times. Before the project begins, document the process by which issues will be resolved in the contract. If you do not plan to be onsite during construction hours, then you should establish a method by which you will relay any defects or issues to the contractor. The key is not to feel trapped or discouraged once you have discovered a problem that demands a resolution.
Using a smart device, document any concerns you may have as soon as you are able to allow the resolution process to begin, prior to further work proceeding. By submitting photographic evidence of your concerns, you are also legally documenting any issues should the need for evidence become necessary.
Each issue should be documented with the following:
- A Clear Explanation of the Issue; and
- A Concise Description of What You Expect as the Resolution
If necessary, refer back to the contract as a reason why you consider the issue to be in dispute. Once again you will see the importance of a well-written contract, as it will be the basis for keeping disputes and misperceptions to a minimum.
Another concept to keep in mind is approaching communications with “fairness” and “expectations” in mind. Sometimes it is not “what” is communicated that can worsen relationships, but “how” something is or is not communicated. One easy example is to require that both parties, homeowner and contractor, commit to confirming receipt of email and text messages promptly. This simply lets the other party know the message was received and seen. Addressing the content of the messages can take longer, of course.
Another easy example is requiring the contractor to communicate their daily schedules consistently. This can simply mean to let the homeowner know, by at the least the day prior, of estimated time of arrival of the next work day. Also, it is helpful and polite to let the homeowner know when the crew is finished for the day. Approaches like this can help to establish and maintain mutual respect.
When the Project Starts to Go South
In the event that the project begins to sour, step back and review your options. Are these issues covered in the contract? An example of this would be that the contract specifically states that cement board should be used around the shower and tub areas. You, however, discover that the contractor is using greenboard. Photograph the greenboard that has already been installed and any additional packaged stacks, waiting to be installed, along with a text or email. The information should include the contract section which states what was agreed upon in writing. In many cases, this should resolve most disputes in your favor.
Always attempt to have a polite conversation with the contractor explaining your dissatisfaction, as soon as possible. The best way is to type up your thoughts in bulleted form to make sure that all key issues are addressed. Once you have discussed this verbally, send the typed version via email or text, as a follow up to the verbal discussion. This is a way of reinforcing and documenting your conversation.
Find Root Details of Contention
Frequent communication, backed with documentation, will help uncover and resolve nagging issues. Exposing the root details of contention is the first step to resolution. These details, more likely than not, will involve one or more of the following:
- Project Scope
- Project Specifications, such as Materials
How to Approach Compromise
A helpful approach is to propose this question to the contractor: “How can we get this issue resolved to our mutual satisfaction?” This will help to explore areas of fair compromise that work for both parties. This method is especially necessary when dealing with matters that are not clearly defined in the contract. For example, if a homeowner’s timing is flexible this could help diffuse tension if the contractor is struggling with team availability and scheduling. This is critical to help ensure that you secure the strongest subcontractors on your project throughout.
How to Fire Your Contractor
In some cases you may want to fire the contractor immediately, but once again defer to the contract to make sure you are following the termination clause in your agreement. Terminating a contract can be risky if you do not have valid grounds for the termination and can result in costly and protracted litigation. In some cases, you might still have to pay for work not completed, even if you have decided to terminate services.
Material Breach of the Contract
If you have attempted to resolve on-going contractual issues, and you have exhausted your attempts at remedy, then by all means fire the contractor. Reasons for cancelling a contract cannot be frivolous such as, “he is aggressive in his manner”. In legal terminology, you must demonstrate that there has been a material breach of the contract. In other words, if there has been a breach from the essential elements of the contract and you can demonstrate that the contractor has not complied with said elements.
Should you have a legitimate reason for firing the contractor, make sure to do so in writing, either via text or email and fully document your reasons. As previously mentioned, make sure that you have fully documented your attempts at getting the issues rectified before you send a termination notice. Dates of correspondence regarding your issues, responses (or lack thereof), videos and photos are all necessary to fully document your complaint.
Right to Cure Laws
Be forewarned that some states have “right to cure” laws that allow the contractor the opportunity to correct any defects before you terminate the contract or take any legal action against him. This “right to cure” option is also an important litmus test of how healthy your relationship is with the contractor. You will know if the relationship is salvageable or not, by your willingness for the contractor to continue work or not. It is not uncommon for homeowners to refuse any further work to be done by the originating contractor, at any recourse, due to lost trust and poor quality issues. In situations of this kind, it is best to seek the assistance of your local licensing board.
After the Project is “Over”
Once the project is essentially completed and the team of tradesmen are no longer on your property, it is time to assess the overall workmanship and functionality of the project. Once again, a smart device should be used to document the process, either as photos or videos, as you walk the job site, observe the work and materials, and use the space as it was intended.
Never sign the project completion form until you have actually occupied the space and have had a chance to use the new features and space consistently. For example, we have heard countless stories of shower diverters being installed incorrectly, e.g.: hot water turns on cold; or overhead shower turns on when it should be the handheld. Leaking plumbing and seals are also known to cause ensuing damage once in everyday use.
Remember, the project is not completed until you are fully satisfied with the workmanship and the quality of what was agreed to in the original contract. Make sure that all items on the punch list are resolved, not “TBD”, and that all items promised per the contract are delivered. A completed punch list is an important prerequisite to signing the Project Completion Form. The signed completion form is then the key requirement for the contractor to receive the final payment.
After a project is officially completed, the homeowner then enters, and is protected by, the warranty period. For more information on warranties, read 6 Key Concepts of Construction Warranties.
Recourse Instead of Expensive Litigation
If the situation is beyond an amicable resolution, then that is why we have the law. However, litigation can be extremely expensive and should be the last recourse for resolving a construction contract dispute. If your contract requires that you go through formal mediation or arbitration before filing a legal case with a court, then you must follow the process.
States that require formal licensure for contractors should have a formal process for mediating or arbitrating disputes between their licensees and consumers. Usually this is at no cost to the consumer, but will require formal documentation and time spent with representatives of the state licensing board and their expert investigators. Be forewarned, the process is lengthy and a bit arduous. If your position is solid and you have the time to document and hold meetings at your home, it is the least expensive method to rectify the situation.
Filing a Claim with the Bond Company
Also, assuming that you are following the language of the contract and your position in the dispute is on the right side of the law, file a claim with the contractor’s bond company. Similar to filing a complaint with your state board, the complaint to the contractor’s bond company will involve proper documentation and record keeping.
There will be a period of “back and forth”, where the contractor must respond to your complaint in writing and you must then provide a rebuttal. When all necessary correspondence is completed, the representative from the bond company must make a determination based on the facts that are in evidence. In some cases, the bond claim will not resolve itself until the state licensure agency has performed its investigation. On the other hand, if breach of contract is clearly evident, you may receive a payout from the bond company in a matter of weeks.
The only caveat to being made whole by the bond company is that the bond may be limited in amount (depending on your state) and there may be multiple claims against the contractor’s bond. In other words, if the bond amount is $15,000, and your claim is $7,000, you may not recoup the entire amount if there are claims ahead of yours, which are in excess of the $15,000 limit. Your recourse would then be Small Claims Court or Civil Litigation depending on the dollar amount of your damages.
Though we hope that you may never need to pursue some of these actions, we do hope that this article helps reduce stress and improves your renovation experience overall. Good luck!
Signs of a Bad Contractor Before You Sign a Contract
How to Choose a Qualified and Trustworthy Contractor
How to Increase Your Chances of Hiring a Good Contractor
How to Start Your Renovation
The Essential Elements of a Home Renovation Contract
The Importance of a Punch List for Your Home Improvement Project
When to Sign Your Project Completion Form
Key Concepts of Construction Warranties
Home Improvement Findings in the Consumer Complaint Survey