You love your property and need to make some repairs or have decided to remodel it completely. Following sage advice from a family member or friend, you get three contractors to give you estimates. Dutifully, you check references and look each one up through the Better Business Bureau and some online review sites.
Everything checks out okay, and you make your decision. Feeling good about your shared rapaport, you trust all the work will be done on-time and to your satisfaction. The contract is in good order, and everything is spelled out in detail.
You agree to put thirty percent down up-front, then another thirty percent down halfway through the project, with the last third owed upon completion. Somewhere along the way, things don’t go as planned and now you find yourself in a dispute with your general contractor. It’s frustrating and creates a very stressful situation. You want to get the matter worked out but are unsure how to go about it.
Keeping the Matter Out of Court
First and foremost, you don’t automatically have to run out and hire a lawyer. Unless there’s a serious breach of contract, substantial damage, or an unsafe condition that makes it impossible to live in the home, you can resolve the situation without going to court.
“If you checked your references thoroughly, this shouldn’t happen. Contractors don’t usually turn into bad apples overnight. But if they do? Next you check what’s in your contract. The contract will be at the beginning of any legal proceeding, so even before your dreams start featuring Perry Mason’s rotund frame, look to your paperwork. You should have negotiated some leverage there. Payment schedules are the best leverage but if you find yourself without sufficient monetary leverage, check with your lawyer to see what other options are available. There may be an arbitration clause, for example. In any case, the possible remedies open to you are several.” —Bob Villa
Go through your contract and look carefully for solutions to resolving disputes. In general, construction contracts have specific remedies for such matters. Try and work it out things with the contractor before you threaten to sue or go to the state licensing board.
That would actually be your next option, as most states have agencies which deal with contract disputes between two parties. In the alternative, you can also contact the local Better Business Bureau and ask if that organization has a dispute resolution program. Some counties also have such alternatives, which are less expensive and time consuming.
General Contractor Dispute Resolution Options
The county or state agency or the local organization might not have an “in-house” option, but do often have what’s known as “alternative dispute resolution” options. These are things such as mediation and binding arbitration. If those options don’t fit or don’t resolve the dispute, there’s always small claims court and civil court:
- Mediation. In mediation, the two parties negotiate through a mediator, who is generally a retired judge or a real estate or construction attorney. The mediator hears both sides of the case, then begins to try and bring the matter to a resolution through a give-and-take process until an agreement is reached. However, in mediation, the mediator’s decision isn’t binding, so, neither party is legally obligated to recognize the deal.
- Binding arbitration. This too can involve a retired judge or practicing attorney. It works much like mediation, the judge to litigator hears both sides of the case and mulls over the facts of the case. The arbitrator will render a decision, however, unlike mediation, the decision is binding on both parties. What’s more, is there is no appeal options if you don’t like the decision.
- Small claims court. You can go to small claims court, which doesn’t require an attorney to represent you. In fact, most small claims courts disallow the presence of a lawyer during trial, if it gets that far. These are small amounts, ranging from $3,000 to $5,000 and usually provide step-by-step instruction.
- Civil court. Should the dispute involve a large amount of money, then small claims court will not be an option. Civil court will be the proper venue, and will require an attorney. You will need to retain legal counsel, but if you win the case, the defendant will have to pay your attorney’s fees and costs.
If you are making improvements to your property to get it ready to rent out or to sell, then contact me for a free consultation. I’ll help you market your property and find qualified people for you to meet. I can market your home to sell quickly and still get the best price.