How To Fight Back Against a Bad Contractor

By: Oliver Marks

Published: March 4, 2011

Don’t take contractor abuse lying down. If your contractor has fouled up your home improvement project–or disappeared altogether–you have recourse.

Maybe the contractors took on more work than they could handle or their credit dried up in the middle of a job. Worst-case scenario, they’re out-and-out scam artists.

Don’t get mad: Get motivated to defend yourself. Here’s how.

Fire the contractor

Firing is the obvious, but 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 or she breached the agreement first.

Document each time they didn’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 their business and home addresses stating that unless the problem is rectified within a specified number of days, they’re in breach of contract, and you will be terminating it.

The catch: Contractors 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 home owner nor the contractor needs to be a member of the organization.

The catch(es): You must get the contractor to agree to mediation (good luck!). And 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 work around weaknesses in the contract. Unlike BBB 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 to $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 to $7,500. In Kentucky, coming in lowest, it’s $1,500; in parts of Tennessee, highest, it’s $25,000.

File complaints and bad reviews

A slew of websites allow you to post information about bad contractors, including angieslist.com, franklinreport.com, and contractorsfromhell.com. You can also file a complaint with the state contractor licensing board, which could make the information public if it receives enough complaints.

These steps won’t fix your crooked tile, but you may take comfort in knowing that you’ve protected a fellow home owner 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, president of the First Amendment Lawyers Association, a trade group. 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 and $1,000 for a consultation, but you could save far more money (and aggravation) in the long run.

A former carpenter and newspaper reporter, Oliver Marks has been writing about home improvements for 16 years. He’s currently restoring his second fixer-upper with a mix of big hired projects and small do-it-himself jobs.

Visit houselogic.com for more articles like this.

© Copyright 2011 NATIONAL ASSOCIATION OF REALTORS®

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s