Home Building/Improvement Projects
Many home improvement projects turn into headaches for the homeowner. There are consumer protection laws in place that provide remedies for a project gone bad. Going into the project knowing these laws and how to avoid (or at least how to be well prepared for) a lawsuit will ease some of the anxiety a homeowner will surely suffer during the project.
Before hiring someone for the project, get several bids. Check the contractors' job references, credit references, license status, and insurance coverage. Look at other work performed by the contractor. Discuss building codes and permits with the contractor. Keep a written record of your findings and the contractor's statements regarding those matters.
Once you have decided on a contractor, insist on a written contract. A good contract will contain:
- The scope of the work, with detail of the demolition, construction and cleanup processes and standards. Make sure the contract language is clear and completely reflects your desires. Don't read more into it than what's actually stated and don't assume the contractor knows what you wanted;
- The exact specifications of the materials to be supplied by the contractor or named subcontractors and any warranties on those materials;
- Start and completion dates. If timing is important to you, the contract should note it and you should negotiate late penalties or a reduction in the price in the event the contractor does not meet those dates;
- Price. If you are contracting based on an estimate and not a fixed price, the contract should state what your budget is for the project, how the final price is to be calculated, who is to monitor the actual cost compared to the budget, and the notification procedure for cost overruns.
- Payment terms. You shouldn't make any payments to the contractor until some material has been delivered to your site and you have received an invoice. If you agree to partial payments prior to substantial completion, the contract should allow you to demand a written accounting of how the contractor spent the money. Payments should be tied to job progress and properly completed work. Withhold a certain percentage until the job is completed to your satisfaction and the contractor gives you a written statement that all subcontractors or suppliers have been paid;
- Warranties on all work, materials, equipment, or appliances supplied by the contractor;
- Process for changing work, substituting materials, or modifying the contract. Any changes should be in writing;
Once the work begins, keep a written log of the progress and your conversations with the contractor. Be quick to notify the contractor of defects or deviations from the contract, and make sure you give the contractor access to correct the defects. Make payments only upon written invoices and knowledge that the materials or services have been provided. Insist on lien waivers from any subcontractors or material suppliers that have completed their obligations to the contractor. If you agree to changes, put the agreement in writing and make sure the contractor signs it. Keep tabs on the budget, even if someone else is responsible to notify you of cost overruns. If you and the contractor dispute about the quality of the work or materials, bring in a third party to make an assessment, videotape or take pictures of the disputed areas. Use the third party as a witness to the contractor's response to your dispute. If you cannot resolve the dispute, consult an attorney about your remedies before making further payments. If the job is complete except for a few repairs, give the contractor the opportunity to cure the defects.
If you find defects after the job is complete and you have made the final payment, notify the contractor immediately. Even if the contract warranty does not appear to cover your situation, you may be covered under state laws covering new home construction warranties or home improvement warranties. Under those statutes, the contractor may be liable for the cost of the repairs. To protect a statutory claim, you must notify the contractor in writing shortly after discovering the defect. Again, keep a written log of your communications with the contractor. If you cannot work out a solution with the contractor, contact an attorney promptly to protect a possible claim and to determine whether your claim is covered by state law.
If you have followed these procedures, you will have reduced the chances of having to state your claim in court.
The information contained in this article is not intended to be legal advice or to create a contract between the reader and the author. The reader is encouraged to seek appropriate legal counsel and not to rely on the information contained herein.