For most homeowners, a great deal of effort goes into choosing the right contractor for their home renovations. By the time you’ve decided on a contractor, finalized an agreement, and paid the deposit, the last thing you need is for it all to fall apart.
Some delays are warranted in home renovation as there are often things out of the contractor’s control, such as injury, weather conditions, or getting the supplies needed to do the job. For example, you may not get the energy-efficient windows you wanted to help reduce your carbon footprint or the granite countertop you chose for another month because they’re on backorder. But if your renovation seems to drag on and your contractor isn’t giving you good reasons for the prolonged delay, it may be time to start weighing your options – especially if you’re trying to increase your home’s value before listing it for sale.
The best-case scenario is you won’t find yourself in this situation. But if you do, a first step you can take is to document the unfinished work, such as through screenshots and photos, and contact your contractor to try and come up with a resolution. If you don’t find a viable solution or cannot reach the contractor, there are a few avenues you can consider.
5 steps you can take if your contractor doesn’t finish the job
1) File a suit in small claims court
This is a viable option for homeowners who feel their contractor owes them money. Maybe you’ve paid them in advance for labor or supplies, or perhaps they left substantial damage to your house before going MIA. The small claims court system allows individuals the opportunity to raise small claims against companies or other individuals. The maximum for small claims court settlements differs from state to state. For example, if you’re living in San Antonio, Texas, the maximum is $20,000, but if you live in Pittsburgh, Pennsylvania you will have a limit of $12,000. A typical amount these claims are capped at is $10,000. Be sure to research what the maximum is in your state to ensure your unfinished contract work falls within limits.
When you attempt to sue your contractor through the small claims court, you typically present your claims against them, bring evidence of faulty or incomplete work, and evidence of any other failure to uphold contractual obligations. The contractor also presents their defense, and the ruling rests with the presiding judge.
Be sure to get an estimate on how much it will cost to fix, then go to the state licensing board website and find out who their bond is. Write a demand letter to the bonding company and to the original contractor asking them to refund the amount of money paid plus the cost to get the project fixed. Once the demand letter expires and if it’s under $10,000, you can take the contractor to small claims court. If the amount is over $10,000 you can file in superior court. – Ace Small Claims, small claims assistance service in Los Angeles, CA
2) Seek legal advice and consider hiring an attorney
If the case is complex and you feel you would benefit from some legal counsel, seek the guidance of a legal professional before deciding your next move.
Additionally, your case may be worth more than your state’s small claims court will allow, in which case the only way to pursue any compensation legally would be to hire an attorney. Legal professionals with experience in the construction industry understand how best to assess your situation and find any weaknesses in or violations of the written contract.
This can be costly, so it’s essential to weigh all the advantages and disadvantages before proceeding.
If you find yourself in a situation where a contractor has not performed as agreed upon, you have legal remedies. You can first reach out to your state’s Attorney General’s office and file a complaint. The office will investigate the claim and encourage the contractor to remedy the issue if your complaint has merit. If this doesn’t work, you can file a complaint at a local District Court, which can handle judgments up to $12,000 and is designed to be accessible to the public. You can also research other options to take against licensed contractors who don’t honor their contracts. For example, Pennsylvania’s Home Improvement Consumer Protection Act provides strong statutory language against contractors who fail to abide by the requisite legal requirements in entering into and completing home improvement contracts. – Cornerstone Law Firm in Blandon, PA
3) File a claim against the surety bond
A licensed and bonded contractor is required to have a surety bond in place to provide some level of protection to consumers in the event of any contractual issues. This is a form of financial security for the consumer when situations like this arise. If you decide to file a complaint with the licensing board against their bond, you may get your money back.
When home or even rental renovations are left incomplete as per the terms of the contractual agreement, homeowners can submit a claim against the bond. Licensed contractors have already paid a surety company who can reimburse you as long as you provide proof. If they did negligent work, their insurance might cover what the bond does not.
Surety agencies work with homeowners to determine the best outcome, assessing whether there are grounds for damages, appointing new contractors, or re-engaging the initial contractor to fulfill the written contract terms.
License bonds ensure that contractors adhere to the local and state regulations set by the law. To make a claim, homeowners will need to provide the contract that outlines the scope of work to be performed and evidence of the damages. While the guidelines and guarantees vary in each state, homeowners can start by contacting their State’s Consumer Protection Agency to begin this process. – Goldleaf Surety, a national surety specialist in Montevideo, MN
Most states require contractors to obtain a bond as a prerequisite to licensure, and homeowners should contact their state’s contractor licensing authority to obtain information on their contractor’s bond. If a homeowner’s state does not have a bonding requirement, they can request the contractor to purchase a performance bond before starting work on the project. – Nick Brady, head of Contract Surety at BondExchange, a surety-focused wholesale insurance agency
Surety bonds can help guarantee that a job will be completed and suppliers paid. Most home improvement contractors don’t carry a surety bond. For contractors working on small homeowner projects, these are difficult to obtain. The best way to protect yourself is to speak with friends and neighbors to get references. Verify that they are reliable and have completed other jobs to their satisfaction. Keep down payments to a minimum and don’t pay the final bill until everyone is satisfied. – Bob Glonek, Partner & Insurance Consultant at Connor & Gallagher OneSource in Lisle, IL
4) File a complaint with the state licensing board and the Better Business Bureau
In most states, construction industry contractors are required by law to hold a license that is verified and approved by a state licensing board. Therefore, if you are not arriving at any agreeable solutions with your contractor directly, you can file a complaint with your state’s licensing board. While this move will not directly provide you with solutions to the issue, the threat of them losing their license may motivate your contractor to return your money or fulfill their contractual obligations.
You can also contact the Better Business Bureau to persuade your contractor to complete the project or pay you back.
5) Leave online reviews and feedback
After the legal process plays out and a verdict has been reached, you may want to leave honest reviews and feedback online. Leaving detailed reviews regarding your negative experience with your contractor on community boards, online review sites, and social media platforms is a quick and cost-effective way to detract others from having the same negative outcomes as you. Remember, leaving a review shouldn’t be to unjustly slander a business as it could also leave you in hot water. Remain respectful and factual in your accounts, and be sure to read and follow the terms and guidelines of any platform you leave reviews or feedback on.
Hiring a completion contractor
Once it is apparent that the initial contractor will not carry out any further work, it’s time to bring in a completion contractor. This is a tough spot to be in, as completion contractors know that you’re in a dire situation and often charge more than your original agreement.
Completion contractors have to pick up where your previous contractor left off, so while it’s an ongoing project for you, it’s new to them. They have to spend extra time and resources checking over what has already been done and potentially fixing any subpar or unfinished contract work. This effort will be reflected in their price.
The best you can do is conduct extensive research and choose a highly reputable completion contractor after receiving several quotes. From there, be as thorough and helpful as you can in bringing them up to speed with the project particulars.
Also, be prepared to remain flexible regarding your preferred outcome, given what is likely to be a reduced budget. You may have no choice but to compromise to get the job completed. You can try your best to recoup some or all of your losses from the initial contractor via the channels outlined above.
If you have an unfinished house project, you’re probably going to attempt phoning, writing, and emailing the contractor. However, if you receive nothing but quiet in return:
- Try a variety of methods to re-establish communication.
- Consider hiring a different contractor if you haven’t paid everything in advance.
- Consider suing in your state’s small claims court if you’ve paid for more work than you’ve received.
File a claim with your county court if the degree of the damage exceeds the maximum of your state’s small claim amount. – Lawrina, a free legal database and portal
Renovating your house is stressful enough, and issues with contractors are an added problem that you don’t need. Make sure you research the credentials and reputation of any contractor you engage with, and consider the steps above if things go wrong.
Redfin does not provide legal advice. This article is for informational purposes only, and is not a substitute for professional advice from a licensed attorney.
The post Project Left Unfinished? What to Do When a Contractor Doesn’t Finish the Job appeared first on Redfin | Real Estate Tips for Home Buying, Selling & More.