What is a Contractor?
A contractor furnishes labor, materials, and improvements to land or existing buildings. Depending on the project, the services include some or all of the following:
- Construction of a house, office, store, or other buildings
- Installation of plumbing and electrical systems
- Grading and landscaping
- Repairs
- Painting
Building projects have general contractors and subcontractors. General contractors assume more of a project manager role. They:
- Enter into agreements with owners establishing the price, rates, scope of work, competition, and other details of the project
- Engage subcontractors for various phases of the construction project
- Procure building permits
- Schedule inspections
- Inspect work of subcontractors
- Ensure payment of subcontractors
By contrast, subcontractors focus upon a particular phase of the construction such as heating and air conditioning, electrical or plumbing. Further, owners of the property being improved upon do not deal directly with subcontractors.
As an owner, you do not have a contractual obligation to pay the subcontractor. However, unpaid subcontractors can put you on notice that the general contractor owes them and put a lien on what you might owe the general contractor.
How a Lawyer Helps You With Bad Contractors
Bad contractors typically perform their work solely, with poor materials and quality, or not at all. You may have paid a contractor who did not do any work at all.
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Bringing Lawsuits
In these situations, a lawyer can pursue a lawsuit for you against the contractor for a refund or damages. You may have a claim for breach of contract by the contractor. These breaches may involve:
Failure to perform the work under the contract’s timelines or otherwise in a timely manner
Not following the plans or specificationsUsing materials of inferior quality or not using the materials called for in the contract or as represented
Violating the building codesNot performing the work in a workmanlike manner, such as leaving gaps and holes and not measuring
To pursue your claim, your lawyer will need the contract, plans, work orders, plans, and your payment records. Photographs and video can powerfully depict the defects in workmanship and the damages from it.
For example, improperly installed roof shingles may cause leaks and resulting water spots on and damage to ceilings. Your images also capture gaps, scratches on newly-installed flooring and walls, and work left undone.
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Defending Lawsuits
If a contractor sues you for nonpayment, you may want a lawyer to raise defenses about the quality or lateness of the work. Disputes over amounts owed call into question the method by which the contractor charges you.
This involves not only interpreting the original contract but also dealing with change orders. Contractors quote prices based on the dimensions, area, and materials used. Any additional work or upgrades likely will increase what the contractor says you owe.
The lack of a license can serve as a potent defense. Generally, an unlicensed contractor cannot recover in a lawsuit against the owner for unpaid amounts. Depending on the jurisdiction, jobs with a cost over a certain dollar amount require a general contractor’s license. Those performing specific jobs may need a plumbing or electrician’s license.
Courts will likely deem contracting without a license when required to violate public policy. Under this reasoning, unlicensed contractors cannot get around the rule by claiming that you knew that the contractor was unlicensed.
Although you generally cannot recover what you paid an unlicensed contractor, you don’t face liability for any outstanding balance to an unlicensed contractor.
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If You Are a Subcontractor
Plumbers, electricians, and other subcontractors may encounter bad general contractors who do not pay. With a lawyer’s assistance, you can pursue the contractor and, to a limited extent, the owner. Specifically, many jurisdictions allow the subcontractor to claim a lien upon amounts that the owner might owe the contractor.
As a subcontractor, you “step into the shoes” of the contractor to enforce whatever rights the contractor might have against the owner. This includes rights of the contractor to a lien upon the real property being improved.
What Should Be in Your Agreement With a Contractor?
A well-written contract may help you avoid bad contractors or reduce the problems one may present.
You need to understand how the contractor gets paid. In a “cost-plus” agreement, you are bound to pay the contractor the cost of the materials and labor along with an additional percentage of the costs. This markup represents the “profit: to the contractor. In such an arrangements, you may find yourself at the mercy of inflation.
You might consider having a “turn-key job.” You and the contractor agree upon a specific price for the job. In the turn-key approach, you eliminate the risks of rising materials costs. However, you don’t get the advantage of conditions that might reduce the contractor’s costs of obtaining supplies and labor.
other related articles of interest:
The Aftermath: Navigating the Fallout of an Absconded Contractor
Consider having a construction contract with provisions that:
- Define the scope of the work, including specifications for dimensions of rooms, materials used, and who performs particular tasks in the project
- Establish a firm deadline for completion
- Call for completion of the work or phases before payment rather than upfront
- The contractor affirms having all required licenses
- Inspection of the work by an engineer, architect, or other professional inspector
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Image credit: take action against a bad contractor by envato.com
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