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Hiring a contractor for a home improvement job? Your contract must contain certain items.
Under the Home Improvement Contractor law, all contracts over $1,000 (One Thousand Dollars) must be in writing. However, homeowners and contractors should consider having a contract for every job, regardless of the price.
The following items must be included in any contract between a homeowner and a registered home improvement contractor for home improvement work.
Chapter 142A does not require that an arbitration clause be included in the contract. However, if the contractor wishes to initiate arbitration, this provision must be in the contract, and must be clearly set out, and separately signed by both the homeowner and contractor. The following language is acceptable: “The contractor and the homeowner hereby mutually agree in advance that in the event that the contractor has a dispute concerning this contract, the contractor may submit such dispute to a private arbitration service which has been approved by the Office of Consumer Affairs and Business Regulation and the consumer shall be required to submit to such arbitration. NOTE: The signatures of the parties above apply only to the agreement of the parties to alternate dispute resolution initiated by the contractor. The owner may initiate alternative dispute resolution even where this section is not signed separately by the parties.
Homeowners and contractors with questions about the Home Improvement Contractor program, should contact the Office.
A complaint may be filed against a contractor or a salesperson. If violations of the Home Improvement Law are found after investigation, regulatory or criminal charges may be filed. There is no monetary award for homeowners in the complaint process. If a licensed contractor was used, the homeowner may be compensated for actual losses through the Guaranty Fund claim process.
TO FILE A GUARANTY FUND CLAIM
There is a form, separate from the complaint form, which must be filed with the Commission for compensation from the Guaranty Fund. The Fund does not apply to salespersons, or unlicensed contractors. A claim must be filed within three years of the date of discovery of loss or damage caused by a licensed contractor.
To obtain a claim form, contact the investigator who is assigned to your complaint.
NOTICE TO GUARANTY FUND CLAIMANTS
Even if the Commission has hired an expert inspector to inspect the Claimant’s property, the Claimant has the right to hire his/her own expert to inspect the property and to testify on the Claimant’s behalf at the hearing.
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*Excerpt[So why would a client refuse to pay you? The possible reasons range from innocent misunderstandings to human error, all the way to fraud and malicious intent.
The most common reason is that the client is unsatisfied with the work itself. Maybe they think you did a shoddy job, or maybe there was a miscommunication that led them to expect different results. There also might be issues with the contract that cause a client to withhold payment. This is also related to unmet expectations, because the contract lays out exactly what the client and contractor expect of each other, and if it isn’t stated clearly, it can cause misunderstandings.
Fraud is also a possibility. You might have done everything right and the client is just trying to get a free ride, therefore knowing your fundamental contractor legal rights and laws is absolutely critical.
When a client refuses to pay contractors they’ve hired, that means that they are unhappy, and it’s important for you to understand exactly why. So the first thing you should do is listen. A face-to-face conversation is the best way to go, because your communication will be more effective than it would be over the phone or in writing. Ask your client to explain exactly what went wrong. Don’t argue and don’t justify yourself while they’re speaking. Just listen.
Once you’ve listened, repeat back what the client has said in your own words. This is the most effective way to let them know that you have understood what they told you. “So, you feel that my work did not live up to your expectations.” “You felt I should have been more careful about covering your furniture before I began painting.” “You believe the materials I used weren’t good quality.”
Hopefully, this will smooth the way to the next step:
When a homeowner refuses to pay contractors who have been building or renovating their own home, they usually don’t want to have to go through the trouble of hiring someone else. They’re withholding payment as leverage to get you to fix the problem.
Dedicating more time and materials to fix or redo the work may cost you in the short term. Think of it as an investment in your business’s reputation. Most customers are happy to give you a chance to set things right, especially if you’ve established a good relationship from the beginning.
Sometimes it won’t be possible to redo the work, and in that case you can offer a discount on the amount they owe you. Discuss the possibilities with the client and see if you can come up with a creative solution.
When push comes to shove, though, you deserve to be paid for work you did, regardless of how the client feels about it. If your efforts to find a peaceful solution come up dry, it may be time to take legal action.
The short answer is yes. If you’ve exhausted all other means, you can bring the case to a small claims court. It’s a good idea to speak to a lawyer first to see what your options are and whether it’s worth it.
According to Ask-a-Lawyer.com, oral agreement is enforceable in court. That means that you don’t necessarily have to have a signed contract to make a non-payment claim–but it’s strongly advisable to have something in writing. A solid written contract outlines all the details both parties agreed to. Without a written agreement, it’ll be your word versus theirs. In most cases, unless there is an obvious problem with the quality of the work, a court will rule in favor of an independent contractor not paid for work. Still, other situations may be fuzzier and inconclusive. It’s always a good idea to have a contract.]
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