Small Business

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Intellectual Property

 May 20, 2022

Working With Contractors: Set Yourself Up for Success

construction on a house

Working with contractors

Are you planning your next home renovation project? Hiring the right contractor is critical, and it’s also essential to ensure you’re preventing miscommunications and problems before they start working for you.

When you’re in the market for a contractor, the first thing you should do to set yourself up for success is find a highly recommended one and get multiple estimates. Do your due diligence before agreeing to offer the job.

Once you’ve settled on a contractor you think will do a great job, it’s time to get set up and draw up a thorough contract. Let’s break down what you should do before they start working.

5 tips when working with a contractor

A lot goes into setting yourself up for success when hiring a contractor. Let’s break down the most important to-do’s before they start working.

1. It’s all in the contract

Having a contract is not simply a nice-to-have; it’s a critical legal document to put in place before the contractor starts working in your home. Make sure you work with a provider lawyer to get everything in writing, including:

  • A thorough description of what work is needed and pricing for each item
  • Start date and end date
  • Any applicable guarantees (any promise the contractor makes that a specific product or service will be free from defects)
  • Signatures from both parties

2. Set up a payment schedule

Experts recommend setting up a clear payment calendar and including it in the contract. For example, schedule payments at three times: a down payment before the work begins; another portion down when half the work is completed; and the rest when all the work is completed. Doing so can ensure you’re getting what you pay for at each stage.

3. Understand your right to cancel

Before you begin, check the Federal Trade Commission and local laws in your state to understand your rights to cancel if you need to. Your provider lawyer will have a thorough knowledge of local laws and can help walk you through your rights.

4. Keep a job file

Documenting the work, any change orders that come up, bills and invoices, and the overall timeline is vital so you can have a thorough record of the project. Keep everything in one folder or file cabinet and label everything with a time stamp.

Can you get your money back from a contractor?

Recent news articles uncover people frequently asking their lawyers questions like: “My contractor didn’t complete the work required, and I’m unhappy with the work they did do. Now they have disappeared and won’t return my calls.”

What should you do in this case? Is there any way to get your money back? Here are four action items when you feel you’ve been unfairly abandoned.

1. Contact them several times

First step: take a breath. If they don’t show up for work, it could be a miscommunication. Make sure you treat them with respect when you call them or send emails and consider reaching out to their place of business. Document all your attempts to reach them, as you may need the record later for legal purposes.

2. Send a formal letter

Your provider lawyer can send a letter on your behalf in these instances. A formal letter from a lawyer is often enough to get the contractor to come back and finish the job. Work with your provider lawyer to outline the next actions you will take in the letter if you don’t hear from them within a certain time frame. Additionally, make sure you send the letter as a registered letter through the postal service for evidence that you sent it.

3. File a complaint with an agency

State and local agencies, such as Better Business Bureau or Contractor Recovery Fund or Homeowner’s Recovery Fund, can help you navigate how to handle a disappearing contractor who seems to have run off with your money without doing work. They can offer legal support or put their license in jeopardy.

4. Lean on a lawyer

A provider lawyer will help you navigate this situation, write letters on your behalf, and take action to honor your rights.

Contractors: What should you do if the homeowner refuses to pay?

On the other side of the coin, contractors who believe they did a thorough, clean, complete job, often face clients who still aren’t happy and therefore refuse to pay them after a completed project. What can contractors do if the homeowner refuses to give them the promised payment?

1. Document everything

Make sure you take photos and videos of before and after shots of your work, as this can be proof of completed work. Include timestamps throughout the process so that it’s clear when you did what.

2. File a mechanic’s lien on the property

A mechanic’s lien is a guarantee of payment to contractors. If a contractor performs work on a project and the homeowner refuses to pay, the contractor may be able to file a mechanic’s lien on the client to demand payment.

3. File a breach of contract

When services in the agreement were performed, and the homeowner refuses to pay the contractor, it’s considered a breach of contract. The contractor will be able to take the client to court for failing to uphold their end of the contract agreement.

Talk to a provider lawyer to learn more

Whether you’re a homeowner hiring a contractor, or a contractor accepting different jobs, each party needs to understand their roles and how to avoid legal pitfalls. Get a consultation from your provider lawyer to learn more.

Pre-Paid Legal Services, Inc. (“PPLSI”) provides access to legal services offered by a network of provider law firms to PPLSI members through membership-based participation. Neither PPLSI nor its officers, employees or sales associates directly or indirectly provide legal services, representation, or advice. The information available in this blog is meant to provide general information and is not intended to provide legal advice, render an opinion, or provide any specific recommendations. The blog post is not a substitute for competent legal counsel from a licensed professional lawyer in the state or province where your legal issues exist, and the reader is strongly encouraged to seek legal counsel for your specific legal matter. Information contained in the blog may be provided by authors who could be third-party paid contributor. All information by authors are accepted in good faith, however, PPLSI makes no representation or warranty of any kind, express or implied, regarding the accuracy, adequacy, validity, reliability, availability, or completeness of such information.

 

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