Even the best laid plans…well, you know the rest. And when it comes to home remodeling, there’s no such thing as a “dispute-proof” plan. No matter how well things start out, there’s bound to be a misunderstanding or difference of opinion (or both) down the line. Here are 8 guidelines for effectively and efficiently handling disputes when they pop up.
When it comes to home remodeling, there’s no such thing as a “dispute-proof” plan.
1) At the outset, sit down with your contractor and agree how you’re going to resolve disputes. Projects almost never go as planned, so it’s very likely you’ll have at least one disagreement down the line. The key is having a set process for handling disputes when they come up. You DO NOT want to wind up in litigation – even if the verdict goes your way, the time and money you’ll spend will be enormous. Plus there’s the small matter of your house sitting there unfinished.
2) Before the project starts, spend a good deal of time creating a Scope of Work document. It’s easy to agree on the big things – a staircase goes here, a kitchen island goes there. But what about the floor tiles? The type of track lighting, or brand of pipes? To keep the devil out of the details, be SPECIFIC about your project, and create a paper trail that irons out what you want –have a good scope of work and a solid project plan, keep all your forms in place, and all your change orders documented. This paper trail will be your tool for effectively resolving many disputes (since most of the time the reason you’re arguing is that no one can remember what was agreed upon in the first place, or when it was agreed to).
To keep the devil out of the details, be SPECIFIC about your project, and create a paper trail that irons out what you want –have a good scope of work and a solid project plan, keep all your forms in place, and all your change orders documented.
3) Understand how your project’s finances affect you and your contractor. You and your contractor should be in the same boat – you’re undertaking a project together, and you both have an interest in the project succeeding. We have strong views on this crucial aspect of your project.
4) Supervise the project as much as possible. If you can, visit your project as often as you can while the work is being done, or have someone you trust be there. Feel free to take pictures while the job is in progress – they could be useful resources down the line. Just be mindful of staying on top of what the contractor should be doing, as opposed to telling him how to do it – if you want to manage everything, you may as well be your own contractor.
Feel free to take pictures while the job is in progress – they could be useful resources down the line. Just be mindful of staying on top of what the contractor should be doing, as opposed to telling him how to do it.
5) Stay organized! It’s critical that you keep and update a job file of important papers, including the contract, plans and specifications, warranties, bills and invoices, canceled checks (front and back), lien releases from subcontractors, correspondence, and those photos you took of the job in progress.
6) Don’t be pressured into signing a certificate of completion until you’re certain that all the work has been completed to your satisfaction, and to the specifications set forth in the contract. Have your initial task list ready at the end, and make sure you check off every item on the list before you sign off.
If necessary, get lien waivers from subcontractors before final payment is made.
7) Never ignore notices from subcontractors or suppliers about nonpayment. These notices indicate the contractor has failed to pay his people. It may be a sign of cash-flow issues, or impending bankruptcy. The problem will only get worse if you ignore it. If necessary, get lien waivers from subcontractors before final payment is made.
Warning Signs of Contractor With Cash Flow Problems
1) He asks for a big advance that doesn’t make any sense/relate to the needs of the project.
2) Subcontractors or suppliers start complaining about not being paid.
3) Materials keep arriving late.
4) You start to disbelieve the excuses you are being given.
5) His subcontractors walk off the job.
6) He asks you for additional funds in advance of progress being made.
7) He’s been in litigation more than once in the last two years (to check this, either ask your lawyer to check federal and state databases, or contact the Better Business Bureau or your local licensing agency that oversees home remodeling and ask for any history of complaints or penalties against the contractor).