Home improvement projects that
require a contractor to complete are often fraught with problems unless proper
planning is made from the start, including selecting the right contractor,
knowing the applicable local laws, and knowing your rights as a homeowner.
The
first step in any successful project is knowing what is required by your local
community. Many homeowners pursue
projects without appropriate approvals, and then end up with fines, and
expensive restoration projects instead of improvements. If you live in a city, you should check with
the local planning department to determine if a permit is needed and any restrictions
on your planned project. Each city is
different, and just because one city does not require a permit (say for
exterior painting) does not mean that another does not either. If you live in an unincorporated area, the
county determines applicable permit requirements.
In
addition, many owners are subject to a homeowners or condominium association restrictions,
and therefore any exterior projects will likely require approval from the Association
as well. In addition, in a condominium,
interior projects that affect the common elements also require Association
approval prior to commencing any work.
Selecting
a contractor is often purely driven by price, but you should always interview
at least two to see different perspectives.
Also, if the price different is substantial, there may be issues that
the cheaper contractor is not considering, so meeting a third contractor may be
necessary. Sites like Angie’s List and
the Better Business Bureau should be checked, as well as the state’s contractor
license website for validity of licenses and complaints. In addition, always ask for a copy of the contractor’s
license and current insurance before giving any money to a contractor.
One
extra question to ask any contractor is simply, “will you use
subcontractors.” If the answer is yes,
or during the work you receive a Notice to Owner in the mail, extra precaution
is necessary when paying the contractor.
That is because subcontractors are entitled to receive payment even if
the owner has paid the contractor. For
example if an owner owes a contractor $30,000, and the subcontractor is owed $15,000
and the contractor fails to pay the subcontractor then in that event the owner
will have to pay the subcontractor to avoid a claim of lien. While the owner
may pursue a claim against the contractor, if the contractor has gone bankrupt
or has no funds the owner may have no avenue of recovery. Therefore, if there
are subcontractors or you receive a notice to owner (which is notice from a
subcontractor that they are providing work at the project) you should make sure
that before the contractor is paid you receive a release of lien from any
subcontractors before making payment. The release of lien protects the owner
from the subcontractor pursuing a claim against the owner for payment.
One
common problem in many projects is that once the work is completed the
contractor fails to obtain a final certificate of completion from the local
municipality. The work may appear done but may in fact not be properly
completed, or the contractor may have failed the final inspection. Sometimes
the contractor simply fails to call for a final inspection. In that event, the
projects permits will eventually expire and the owner will be cited by code
enforcement for failure to obtain final approval of the permitted work. This can result in fines and costs for
failing to complete the project.
Therefore,
final payment due any contractor should be conditioned upon the contractor
providing proof of completion as well as proof of passage of any final
inspection and a certificate of completion from the local municipality. If you
have work that has been completed but that does not have a final certificate of
completion and the contractor no longer is why cooperative, and owner has the
option of reopening the permit as owner builder, requesting inspection and
assuming all work has been properly done, obtaining a final certificate of
completion.
As
you can see, hiring a quality contractor is crucial to a successful job. In
addition, large project should be reviewed by an attorney to make sure that all
your legal rights are protected. Failure to heed this warning can result in a
costly mistake to your most valuable asset, your home.
Michael J Posner, Esq., is a partner in Ward Damon a mid-sized real
estate and business oriented law firm serving all of South Florida, with
offices in Palm Beach County. They
specialize in real estate law, and can assist owners and lenders in all real
estate construction matters. They can be
reached at 561.842.3000 or at www.warddamon.com
