The Contractor List: Eight Tips When Contracting for Home Improvements
The homeowners wanted to build a pool in their backyard. In April, a pool contractor gave them a written proposal. After receiving the proposal, the homeowners met with the contractor and selected several options, including a custom rock grotto waterfall, which were not specifically identified in the original proposal.
Pool construction started and the pool was filled with water at the end of the summer. However, some of the work on the custom rock grotto waterfall needed repair, and the homeowners complained that the heater and chiller did not operate properly because incompatible equipment had been installed. A dispute arose over payment. The homeowners refused to pay the remaining monies due under the original proposal because of the construction issues. The contractor claimed they owed even more money because the options they chose had increased the price and refused to do any more work because he had not been paid.
The contractor filed liens, and everyone sued. The contractor argued he was entitled to payment in full because he had “substantially performed” the contract and any remaining performance was excused because the homeowners had not paid him. The homeowners said the contractor could not sue for breach of contract because he had breached it first.
Five years later, the lawsuit was still ongoing.
Tips for Working With Contractors
Working with contractors on home construction projects is tough for any homeowner. This is an area where seniors are especially vulnerable because they are more likely to be targeted by scammers, they often suffer from decreased executive function and therefore do not have the ability to research and negotiate a good contract, and they may not have a strong support system in place to help them research and make an informed decision.
Thus, I’ve created The Contractor List. It may not prevent you from having a contractor dispute, but it will at least give your lawyer something to work with if you run into problems.
- Hire a reputable contractor. You need a real company that has been in business for years, provides references, has a good BBB rating, and carries insurance that will cover everyone and everything on the job. If you hire a guy with a beat-up truck who randomly knocks on your door, then you will likely get bad results.
- Get a written contract. Handshake deals are stupid.
- Include in the contract the complete scope of work, materials that will be used (type, grade, manufacturer, new or used), project schedule, and price. Pay attention to the “standard clauses, especially those that address delay of performance, dispute resolution and the change order process. Negotiate daily penalties for unexcused delays.
- Make sure the contractor uses only licensed subcontractors for the work that requires a license.
- Put the duty on the contractor to obtain any required permits. If the contractor suggests sidestepping the permitting process, that is a deal-breaker. If you are in a homeowner’s association, enlist the contractor’s help to get any necessary approvals.
- Tie your payments to performance milestones and hold back 10% to pay upon final completion. Do not pay the contractor in cash.
- Be there during construction. Inspect the work and materials. Take pictures. Keep notes. Meet the subcontractors and write down their names. Buy them lunch to minimize job disruption.
- If you see something wrong, say something and get it resolved then. Insist on copies of invoices, proof of payment, and lien releases.
If things go awry, try to work it out. If that fails, call your lawyer.
Hammerle Finley Can Help
Are you looking for legal assistance? Schedule a consultation with one of the experienced attorneys at Hammerle Finley to discuss your options.
Virginia Hammerle is in her fourth decade of practicing law. She is Board Certified in Civil Trial by the Texas Board of Legal Specialization and an Accredited Estate Planner. Contact her at legaltalktexas@hammerle.com or visit www.hammerle.com. This column does not constitute legal advice.
