What To Do if You Have a Contractor Dispute
Options before and after going to court
on July 18, 2022
Contractor disputes can quickly spoil a new construction project or plans for home improvement. Disputes can result in frustration, delays, and unforeseen expenses.
If you are dealing with a contractor dispute, you may be wondering what your options are and if you should file a lawsuit.
While filing a lawsuit is possible, going to court is often a last resort. “There are a lot of ways a case could go that could be short of full-blown litigation,” says Colorado construction law attorney Jeffrey Kerrane.
This article will cover different types of disputes between homeowners and contractors and the various options for resolving disputes.
Types of Contractor Disputes
Several types of disputes could arise with a contractor. Some of the most common include:
- Start date. Disputes over when a contractor is supposed to begin work are common. If a contractor starts a day late, for example, this may not be a big issue, especially if the contractor explains the reason for the delay. However, if several days or even weeks go by, this can create serious problems.
- Project delays. In addition to late start dates, there can be delays throughout the entire course of a construction project. Delays can arise for many reasons. Some are legitimate or unavoidable. Other delays are due to the fault of the general contractor or subcontractor.
- Completion date. If delays mount, the project may not be finished by the agreed-upon finish date. The work could drag for weeks or months beyond the original goal, leading to frustration and other problems.
- Quality of the work. This is another major area of dispute. Perhaps the construction is shoddy, or parts of a project are left incomplete.
- Materials used. There may be disputes over the materials used in building or renovating. For example, a homeowner may have wanted a particular type of wood or tile for their kitchen. When the work is done or midway through the project, the homeowner realizes a different material was used.
- When and how contractors are paid. Money issues can be some of the most significant disputes with contractors. For example, disagreements could arise over who pays for materials, who pays subcontractors, and when payment is due.
How to Deal with a Contractor Dispute
If you are facing a dispute with your contractor, there are several steps you can take to try and resolve the issue.
Speak with the Contractor Directly
It’s always a good idea for homeowners to try and “exhaust all of their remedies with the builder directly before even considering hiring a lawyer,” says Kerrane. “If things can be worked out without hiring a lawyer, that’s always best.”
For example, an issue could be based on a misunderstanding or miscommunication. The contractor may be unaware of the issue.
If notified of the problem, the contractor may be willing to redo work or offer a discount to make things right. Talking things over in a firm but polite way may be able to clear matters up.
Study the Contract
If you have a written contract, review its provisions. This is particularly important if you haven’t looked at it closely before. See what the contract says about:
- Scope of work. The scope of work outlines the project to be completed, including goals, materials used, and who will be involved in the project.
- Time frame. Does the contract specify a start date? An end date? Does it lay out a timeline for phases of the project?
- Payment schedule. See what the contract says about payment times and how payment is made. Does the general contractor pay the subcontractors? Does the homeowner pay subcontractors?
- Arbitration clause. Arbitration clauses can be a very important part of the contract if you are considering taking action against your contractor. Does the contract specify how disputes are to be resolved? Before using or taking other legal action, the contract may require you to go through mediation or arbitration.
Contracts can be confusing and dense. But understanding what’s in the contract documents is essential for taking effective steps to resolve a dispute. If you have questions about your contract, contact a construction litigation attorney.
“Many states [require] that before you can file a lawsuit for construction defects, you have to go through an informal notice process,” says Kerrane.
This notice process is relatively straightforward. “The homeowner sends a letter (typically through certified mail) to the builder identifying the problem,” says Kerrane. “The builder then has a certain amount of time to respond and offer to make repairs. If this process works out, it usually resolves the issue.”
The notice process may involve an inspection and a little bit of negotiation with the builder to achieve the best outcome, says Kerrane.
If you have questions about whether your state requires giving notice before pursuing a lawsuit, or the timeframe for notice, consult with a construction lawyer in your area.
Alternative Dispute Resolution
Another option that is often required in construction contracts is alternative dispute resolution (ADR).
ADR is any process in which an impartial third party, selected by both sides in the dispute, helps the parties resolve their dispute without recourse to litigation. The two main types of ADR are:
- Arbitration. Arbitration “is a lot like being in court, but instead of having a judge or a jury, you have a privately hired arbiter who decides the dispute,” says Kerrane. The arbiter hears arguments and makes a binding arbitration decision. The parties agree to follow the decision ahead of time. Generally, there is no appeal.
- Mediation. Mediation is like arbitration, however the impartial third party does not make a binding decision for the parties, instead it helps to resolve the dispute themselves.
Compared to trial, ADR can save time and money and often leads to good results for the parties.
If you do not pursue alternative dispute resolution or ADR fails, you can take your matter to court.
Small Claims Court
If you are trying to recover money from your contractor, consider filing a claim in small claims court.
Small claims courts are different from regular civil courts. Individuals typically represent themselves instead of having a lawyer. Small claims courts only handle specific monetary amounts, typically ranging from a maximum of $2,000 to $25,000.
Small claims courts are a less expensive option than pursuing a lawsuit in civil court, because obtaining an attorney is unnecessary. To initiate a claim, you get the necessary paperwork from the small claims court clerk and pay the filing fee.
Typically, you will file with the small claims court in your local jurisdiction. But be sure to check your contract to see if it says where claims should be pursued.
If you pursue a lawsuit in civil court, it is essential to seek legal representation from a construction litigation attorney.
There are multiple phases of a lawsuit with different deadlines and requirements. The law is complex. The trail can be time-consuming. An experienced construction attorney will understand the law and process for securing the best outcome.
Preparing For Action
Whether you are planning to talk with your contractor directly, pursuing alternative dispute resolution, or going to court, it is important to have evidence of the problems in the dispute.
“People can take pictures or videos of their issue. For example, if they’re having an issue with a water leak, it’s probably most powerful if they have a video that shows the water dripping from the ceiling or a light fixture. Aside from that, people should always be preserving any documents related to the purchase of their home,” says Kerrane.
- Documentation (including the contract)
- Photos or videos of the defect
- Communications with the contractor (emails, texts, etc.)
Can all be helpful in building your case.
Questions for an Attorney
If you are considering legal action against a contractor, it’s important to seek legal advice from an attorney whether you ultimately decide to sue or not.
Fortunately, many attorneys provide free consultations, allowing the attorney to hear the facts of your case and for you to determine if the attorney meets your needs.
To see whether an attorney or law firm is a good fit, ask informed questions such as:
- What are your attorneys’ fees?
- What billing options do you offer?
- What is your experience with construction litigation cases?
- What are all the legal services you offer?
- What does my contract require?
- Is a lawsuit the best option for me to pursue?
You can visit the Super Lawyers directory and use the search box to find a lawyer based on your legal issue or location.
Look for a construction litigation attorney in the Super Lawyers directory on matters related to contractor disputes.