Contract Law - question

[Turdus]

I just had my roof replaced. Contract was 1/3 down, 2/3 on completion. I have a punch list of items I want fixed, including some siding damage they did, before I hand over the final payment.

So far, no problem. the company will send out a representative to document the issues and put them in front of the owner.

My instinct says to not pay the balance until I have a resolution. If I hold the chips, I might get it fixed. If they hold, then I might not get anything.

My question is who decides the job is complete, and the contractor is to be paid?

Thanks.

[burningyen]

There's no magic to this, the job isn't complete until they deliver work product with no defects, within reason (you shouldn't hold back payment if one tile is 1mm off center, for example, unless that kind of exactitude was part of the job description). Follow your instinct and be reasonable and you'll be fine.

[velorush]

I engaged a fraternity brother to build my house and I'm still (13 years later) holding the piddly $100 I kept as a matter of principle to ensure he'd finish. I finished my house myself. He no longer builds houses.

There is a local attorney that also teaches B-Law at the University. He has his own golden rule. The Hearn Golden Rule simply states: "He who has the gold makes the rules."

If you pay the balance, you have no leverage. Always do what you said in the contract you'd do, but maintain your leverage until you no longer need it. IMHO

[Turdus]

Thanks Ben. The "within reason" is going to be the hard part. I had my roof replaced due to significant hail damage. A ridge vent was installed on the house, garage, and family room. As a result of the workers walking on the hot tiles, they have already left a significant wear pattern on much of the roof. Clearly visible from the street.

In addition there is siding damage. I would say the work is sloppy,and the wear to the shingles has probably reduced the structural integrity.

Put it this way... I have another contractor doing some aluminum wrap. He refused to put his scaffolding on the garage roof, as he did not want to be blamed for the damage he said is already on the new roof. He told me the entire roof should be replaced, lol.

[BadgerDave]

Look for the term "substantial compliance" in your contract. It may or not be there, but even if it isn't the concept will likely apply under the laws of your state.

Essentially, it means that you have the obligation to pay the contractor when the job is substantially finished. Punchlist items, as long as they are not "substantial" do not relieve you of your contractual obligation to pay.

This pretty much sucks and many contractors take full advantage. IIRC, the reason behind the doctirine of substantial compliance is to make sure laborers and subcontractors get paid, leaving minor discrepancies to be resolved between the contractor and the contractee.

That said, if you're worried that the job is seriously flawed, hold on to the money and force the contractor to sue you. There is always the chance that he won't have the time, inclination or resources to follow through.

[BubbaVO]

Just be careful. You don't want them putting a lien on your property either. It becomes a major pain when it comes time to sell.

Maintain good communication. Send letters that document conversations and commitments. If you end up in court a nice clear track record of who you were talking to, when you spoke to them, what was promised and what was done would be helpful. While substantial compliance is a concern, a judge will also want to see a fair resolution to a dispute and you want to be able to credibly inform him of your position and do so in a way that makes it clear that you're not a mishugunah.

[Turdus]

Thanks for the replies Gents.

A positive note here is that the company has been in biz for 20 years. They are sending out a rep to photograph the issues, and I have a feeling they'll do the right thing.

I suspect that the rep will ask for the balance due. That is where I am having the issue. Contract says balance upon completion, but also says.. 1.5% interest on balances over 30 days... so I may use that to my advantage.

I'm not refusing payment, but am interested in delaying to make sure my issues are addressed. Is there a polite/legal way to put that?

[Turdus]

Update: Rep came by today along with a supervisor. Issues documented, with a "we're going to take care of this" assurance.

No request for the payment balance. I was a bit surprised.

[cmatthes]

Sounds like you're going to be okay on this one. The "substantial completion" doctrine seems to apply with most homeowner contracts of this type. As a homeowner, the reality is that even if you were able to hold back a percentage of payment as retainage, that $$ figure is not significant enough for a busy contractor to finish your job before moving on to the next job and bigger payday.

This is where a contractor concerned with their reputation in this marketplace will also be more likely to work with you to get it done. 5-10 years ago in our area, it was a lot more common to see jobs abandoned completely and never revisited - there was simply too much work out there and thus money to be made. It's a good thing for you and me that the economy is running slow right now, I guess.