I was curious if anyone else has had to do this...and the best way possible? I have a contractor I need to fire due to condition and breach of contract, the problem is how do I get my deposit back? His time and material in the job does not exceed that of the deposit. Yet far less than his required deposit requirements?
joat, you may want to start with your state's contractors' license board. Review what your state allows and the information your state has on this particular contractor. Gather your facts and present your case to the contractor. If he still refuses to negotiate with you, then proceed with legal steps.
As the previous poster said, a written contract is your best friend. Review the terms and conditions and all fine print before you proceed.
I'm assuming you already asked the contractor for the deposit back and he said "too bad".
You need to consult an attorney to review the terms of the contract so they can give you legitimate legal advice. An attorney who knows the details of the contract and the laws where you reside can give you the best course of action. It may be as simple as a letter or as complex as taking the contractor to court.
We know nothing of your situation, or even your location (USA, UK, etc.) Plus, it's actually very unethical for others to provide you with legal advice and apply it to a unique situation.
Whats the deposit for and the amount? You've left it open for too much interpretation. If you paid a small deposit to secure plans and/or drawings you probably are out. You really should pay for the work performed even if it's drawings. Why are you stopping the project? Did you get a lower bid? Remember you should be as ethical as you expect your contractor to be.
I agree with you. The subject is too wide open. If any work is done, he should get paid for that work. There are fees for permits to pay for "before" work can be done. They do not refund. It the contractor breaks work codes, that's a whole other matter. Breach of contract...hopefully you have something in writing and signed.
I am an electrician and I always get something in writing if the project is worth having a deposit for. Covers me and the owner. Oral agreements are not very reliable in circumstances like "breach of contract." You will have to prove what you say to get your money back.
I have to agree with the two answers above. Work done gets paid for. Do realize that the contractor's subs need to be paid, materials bought need to be paid for and the list goes on. As I am sure there are more than enough bad contractors to go around there are an equal number of bad clients to go around too.
Let me be alittle more specific on this....
When starting the project, the contractor received almost 1/2 of the contract price and some assets were also given (our BIG mistake) anyway...hindsight is 20/20...right? So after 2 month on the job, (only 11 days worked) this contractor approaches me and tells me he is flat broke and that I would need to finance the remainder of the job, if it were to get done, that would include his workers..AND had the GONADS to ask for the remaining balance of the contract when done..well Im thinking where did all this $ go? **Note all materials in the job with the exception of 500.00 was provided by me....Thats the just of it...yes there was a contract, and we did try to get our money back twice, yet to no avail.....How do you squeeze money out of a turnip...right?
As mentioned, there's nothing you can do unless the contract is written. Typically, you don't get the deposit back no matter what. It's usually a non-refundable deposit, unless otherwise specified.
And typically, you do pay half up front like you did. It is the contractor's responsibility to complete the job.
I also agree, you should pay for whatever work was done. You can't expect the contractor to cover those costs. He still had to pay his workers and whatever he did do.
Doesn't sound like breach of a contract to me. Just sounds like you didn't research contractors before hiring a reputable one.
ohhhhhh forgot to mention all the work that was done was not to code and had to be all torn down.and redone.....
Tell ya nothing better than grabbin your ankles over and over again
Who had the work torn down? Did a city inspector? If so, the work is on record. You might try calling the State labor board and ask for the contractor division and you can find information about this contractor. he must have a license. You might have a civil case.
As posted above, review the termination conditions of your contract. You must also investigate the contractors’ lien laws in you State. If you received a Notice to Owner, there most likely are contractor protections in place, which will complicate termination, unless you can prove non-performance and/or negligence.
Depending upon your situation you may need to retain the services of an attorney well versed in Construction Law. I would also suggest you consider hiring a construction management consultant to assist you and any perspective attorney. The consultant’s time is typically less than what an attorney will charge and can provide higher quality litigation support.
Thanks everyone.......I had an inspection done and it failed, which I knew it would have........
This individual was sued but all it is a piece of paper.
Perhaps stricter laws need to be in place......per state and county. It is unfortunate and well understood why one has to be a jack-of-all trade... oppppps a jill-of-all-trades
far too many people end up where you are. don't just let go. follow up with your state contractors' board. see if there are other complaints against him. if it can be shown that fraud is involved, this individual could possible face jail time and/or have to pay restitution to the folks he has cheated. how much time do you have and how angry are you?
If he didn't pull permits and city works knows about it they can cause him some problems. I wouldn't give him another dime and I would make it clear that he is terminated and make a demand for your money. If he made minor mistakes then a judge may allow him to correct them. I always make a paper trail in case it ends up in court. Start with the city and start loading up on info I also send a certified letter, then I have my attorney send him one. Let us know how it goes.
This all occurred months ago,and now have a judgement for all that was redone, both purchased before and then after....We did sustain water damage to our house while the house was covered by a tarp for 2 fricking months, but that money had to be used to fix all the outside damage to eliminate any further inside damage. Yet here we are still sitting in what I call our Sanford & Son house. Its just ashame...I have a piece of paper, by law allowing me to collect...but how do you collect from someone who has nothing........nor has this individual prvided anything to the courts as to where my money and assets went? Im very angry and probably will be.......OHHHH and I am NOT the only homeowner he has affected either ~sigh~
Did you check and see if his he was licensed? I'm a licensed contractor in MI. and have seen a large spike in unlicensed contractors advertising on Craig s List or whatever. I feel for you Jill and contractors like you are describing give us all a bad name. I give a copy of my license on first meeting and ask for the home owner to check me out. Also provide references at request. Not having either of these items for your information is a red flag.
Was he insured?
Yes, there are licensed contractors that are not worth hiring, I agree. But there are some that stand by their work and take pride in doing the job right and to code.
You can try the court route, but you might be out of luck. We had one that we were paying bits at a time and suddenly they screwed up our basement concrete and I mean screwed it up. It looked like the ocean and was like walking on waves. We had held back $7000.00 and managed to jackhammer it out and redo it with that amount. He had ripped off so many people it was incredible. He declared bankruptcy and nobody got anything.
Two things a contractor does not want to happen a license board complaint and bond claim, threaten both or to sit and negotiate a refund give him three days to reply or start the claim process if he/she is sensible they will pay you back.
Do not consult an attorney you will only end up in deeper waters they love home improvement disputes it an easy $15,000.00 for nothing read my new blog How to avoid a home improvement dispute.
Practise saying these words over and over with either a friend or a family member...then go and be firm with him....Here are the magic words.....
You are fired, and I want my deposit back as per the contract, or I will see you in court.
The important part is to have a written contract, and to be firm, no room for argument...
You are fired, and I want my deposit back as it says in our written contract or I will see you in court. If you form a statement, and do not let it sound like a question, he will not question you.
I have seen many homeowners win this battle but it is not easy or fast. we build outdoor kitchens and many of the home i visit are under construction. i have had several clients here in florida in exactly the position you are in. once there is a judgement and the money does not get paid -- no attempt to make any reparations, go back to the judge. i had a couple last year who ended up financing their own job but the contractor had his future earnings garnered. He was told he had to sell off machinery, his home, trucks, etc if he was unable to make arrangements for the debt. if these steps were not taken, the court would confiscate his stuff and sell it for the homeowner. go back to the judge who sat on the suit and ask for assistance.
i have seen several homeowners win their money back in this way.
I don't know how different your construction industry is in the US.
I was in construction for about 40 years. We have a show here called " Holmes on Homes" It deals exactly with your type of problem.
When I watch this show I have to shake my head. I am absolutely astounded by how naive or gullible homeowners can be.
The first stupid mistake is no contract. The contract is your bible when it comes to construction. I don't care if it's your brother, uncle next door neighbor or mother in law. You do absolutely nothing without a contract.
The second stupid mistake is giving any contractor a deposit. If you are supplying materials this goes double. If he is supplying materials you can make a deal to pay for the materials when they are on your property and in a place you can lock up.
When it comes to him paying his trades, if he can't carry a payroll for two weeks he shouldn't be in business.
When you do a draw make sure you check to see what work is done and get a 3rd party to help decide what the value of that work is. If you have a builders loan at the bank they will help you with that.
When you agree on the amount of work you hold back 15% and pay him a week later. You always need to make sure the amount of work he has done is more than what you pay him for. Other wise he has no incentive to come back.
If the job is big enough you want a written guarantee that he has paid his trades before you pay him. If you don't any sub trade on the job could place a lien against your house. He also needs to have his compensation insurance paid up. You don't want to be responsible for paying someones doctor bills if they get hurt.
Someone mentioned a performance bond. That's excellent advice.
Not only does it guarantee that if you have to hire someone else, the bonding company pays. It also makes sure you get the job done in a reasonable length of time. And, the bonding company will go after the contractor for payment.
Even if, at the end of the job, the contractor has done his job never pay out 100% when he is finished.
There is a condition called a hold back lien. Usually it is 15 or 20 %. You pay that out 35 days after completion and only when he supplies a guarantee that his sub trades are paid.
Think about all that. And before you do any job do your homework. And then do more homework, and finally DO YOUR HOMEWORK!!!
Common sense goes a long ways and to many people ignore it.
Also, the chances of getting any deposit back are slim to none. If the contractor is broke he has nothing to give back.
You would only waste your money.
Many a shady contractor has taken the homeowner for all they could. Then they declare bankruptcy and start up again under a new name.
Unfortunately the laws don't do much about this.
So good luck with your problem, I hope you get something out of it.
For future reference, each time a contractor requests a draw make sure you receive partial lien waivers and a final lien waiver at the end of the job. Any subs or material suppliers who do not get paid by the contractor can put a lien on your home.
If the contractor has a bond file against it. Also check for workman's compensation and general liability insurance.
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