Volume 16, Number 2 · April 2006

Avoiding Home Improvement Hangups

property law in Southwestern Pennsylvania

by Robert C. Fratto

One of the most frustrating situations I see as a lawyer is a disagreement between a homeowner and contractor arising out of a construction or home improvement project. When talks between the parties break down, the parties are then faced with hiring a lawyer to protect their interests. Often where smaller amounts are at stake, the cost of litigation will exceed the damages. This can be avoided by carefully choosing a contractor and preparing in advance a contract that will protect both parties.

After planning your project carefully, the single most important decision for the homeowner will be the selection of a contractor. Unfortunately, advertising does not always guarantee the quality of a contractor's work. Friends who have used the contractor, real estate agents, architects and lenders may be helpful in finding a reputable contractor.

The next step for the homeowner is to interview each contractor you are considering.

How long has he been in business?
What is his record with the Better Business Bureau (BBB) or Chamber of Commerce?
Will he provide a list of comparatively recent references for projects like yours?
Will he be using subcontractors on the project?
What types of insurance does he carry and with what limits? Ask for copies of insurance certificates and make sure they are current.

While many contractors use good business practices and operate within the law, there are exceptions. Practices you may well want to question include door-to-door solicitations, a request for payment only in cash, excessive upfront payments, pressure for an immediate decision, lack of a telephone number or business forms and cards, and especially beware of questionable financing plans recommended by a contractor.

Whether a homeowner or contractor, be sure to reduce your understanding to a written agreement. The obvious elements in such a contract would include the names and addresses of the parties, a careful description of the work to be performed, an estimated start and completion date, and a payment schedule. Neither party should assume anything that is not written. A homeowner may include a "no lien" provision in the contract. Recording a no lien certificate in the Office of the Prothonotary will prevent not only the contractor, but subcontractors and material suppliers from filing liens in the event of nonpayment somewhere down the line.

The agreement should include a provision for how change orders will be handled. A change order is a written authorization to the contractor to make a change or addition to the work described in the original contract. It will likely affect the project's costs and may affect the time schedule.

For both homeowner and contractor, having your Peacock Keller lawyer review your contract before you sign it will be more cost effective than a lawsuit to reform or enforce it. Keep a log or journal of all phone calls, conversations and activities during the construction period. You also may want to take photographs as the job progresses. These records are especially important if problems later develop. Of course, you will want to keep a copy of the contract, any change orders and correspondence.

Before signing off and making final payment, a property owner should ask:

Has all work met the standards spelled out in the contract?
Do you have written warranties for materials and workmanship?
Do you have proof (receipts or releases) that all subcontractors and suppliers have been paid?
Has the job site been cleaned up and cleared of excess materials, tools and equipment?
Have you inspected and approved the completed work?

If a dispute arises, most can be resolved by reasonable discussion with the contractor. Again, a verbal negotiation should be followed by a writing signed by both parties. Whether you are the contractor or the property owner, dispute resolution by negotiation or even mediation involves less time and money than litigation. But if you do not get satisfaction, consider contacting the BBB, the Bureau of Consumer Protection, or your Peacock Keller attorney for further information and help.

< Back


Home · About the Firm · Attorney Directory · Practice Areas · News and Events · Contact Us · © 2006 Peacock Keller & Ecker, LLP, 70 East Beau Street, Washington, PA 15301 · Phone: (724) 222-4520 or in PA: 1-800-242-8897 · Fax: (724) 222-3318 · Terms and Conditions