Don’t divorce your contractor!

Firing a contractor in the middle of a project is like getting a divorce:  it’s ugly, and it’s expensive.  Dishonest contractors know something you might not:  once work commences, your project is no longer desirable for any other contractor.  If you’ve been talking to contractors, just ask them how they would feel about taking over a contract that was stopped in the middle of work from which the previous contractor was fired.  You might be surprised to hear—EVEN IN THIS ECONOMY—what the answers are.  Add to it that most likely if you fire a contractor that you will not feel like paying them as much as they feel is owed to them at that point, so they will likely slap you with a mechanic’s lien and law suit, and you’ll want whoever takes over the project to help your counter-suit by acting as an expert witness for you.  You’re now asking for them to volunteer to be embroiled in a law suit.  Thanks, can I get a side of kick-in-the-teeth with that?  If you manage to get them to agree to pick up the work, do you think they’ll do it for the amount the dishonest contractor bid was, or even their own original price, minus what has already been done (if they bid on the original project)?  NO WAY!  The previous contract was underbid, so that number’s a fantasy, and your project just became the ugly red-headed stepchild, so kiss your visions of bargain-basement costs goodbye.  Think of your situation now as one huge unexpected change order.  Any decent contractor walking into a stopped project that smells of law suit will build a big profit buffer into their pricing, to include re-work of things the other company didn’t do, unknown issues, and enough to cover their time should you decide to subpoena them when your case goes to court.  Most likely you’ll have to accept any price at that point, or go without the work being done, and depending on when the work stops, your home might not be habitable.  You might not have the luxury of bargaining at that point.

On the other hand, if you decide to sue your contractor (or counter-sue them if they sue you for a mechanic’s lien), you will have to hire a lawyer, and most likely you didn’t budget for that, and because many suits are settled out of court, you will have to pay your lawyer for their time.  Beyond that, it will likely take more than a year to get this through to a hearing, so be prepared for a lot of extra prep work for you (i.e. eating into your personal time) and that your project, unless picked up at a premium by another contractor, will remain “on hold” for that year.  On the dishonest contractor’s side of a law suit, many have lawyers on retainer that they need to keep busy anyway, so the law suit you bring will not represent much (if any) additional cost to them, and if it is, it’s likely a tax deduction. In fact, you just gave them something to do as the money they spent on their attorneys is a sunk cost to them.  Beyond the law suit, dishonest contractors know honest contractors hate taking over projects mid-stream, and won’t take on projects that might be involved in litigation unless they are well compensated for it.  Either way, once you decide to sue, your project cost will go from a bargain-basement blue-light special to a private shopper premium quicker than you can say, “Law Suit.”  That is why you should do all you can to vet your contractor before you sign a contract, because you will suffer from litigation, not them.
Just like marriages have prenuptial agreements, construction projects have contracts, but neither makes the process of divorce or termination fun or easy.  The bottom line with choosing a contractor is the same as choosing a spouse:  don’t get involved with anyone with whom you’re not reasonably sure you will go the distance.

Tags: Construction, Contractors, contracts, homebuilding, law suits, negotiating, residential, termination

This entry was posted on Thursday, March 4th, 2010 at 4:59 pm and is filed under Contractors. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.