State Board Can Help Iron Out Problems With Contractors
Everyone who owns property seems to have a contractor nightmare story. Chief among the tales of woe I’ve heard from San Fernando Valley and Ventura County readers are problems with earthquake repairs that haven’t been done correctly.
What’s a property owner to do?
Here are some steps you may find helpful:
One of the first things a property owner with contractor problems can do is contact the California Contractors State License Board, which licenses and regulates contractors as an agency of the state Department of Consumer Affairs. “I advise homeowners to try us first. It’s a lot cheaper than hiring an attorney,” said Paula Watkins, southern regional deputy for the board.
Statewide, the board received more than 29,407 consumer complaints within the last fiscal year. These complaints led to 1,628 citations against unlicensed contractors, 887 contractor licenses being revoked and 884 suspensions. And more than 675 cases involving unlicensed contractors were referred to a district or city attorney for prosecution.
Consumers who feel they have been wronged by their contractor can call or visit one of the board’s offices and fill out a two-page complaint form. Complaints are reviewed by a consumer services representative who contacts the contractor to see if the consumer’s complaint can be easily resolved. You can also request that the board send out one of its 125 field investigators for a free investigation and report. The board said it conducted about 17,000 of these investigations during its most recent fiscal year and there were additional industry experts sent out by the board in cases that were more complex.
Homeowners who experience problems with a contractor should read their contract carefully and see if there are any provisions relating to arbitration or mediation. If the contract contains such provisions, the property owner will want to clarify how to begin one of these procedures.
Documenting problems is another important step. Property owners should take photographs, keep detailed records of conversations with a contractor, make a videotape and do whatever else is possible to document work that a contractor is not doing or doing improperly.
Small-scale disputes with a contractor may be dealt with in small-claims court. While the cost of filing a full-scale lawsuit can be very high, small-claims court can handle cases involving less than $5,000 and most homeowners can represent themselves without the assistance of legal counsel.
Licensed contractors are required by the state to have a $7,500 bond. This bond remains in place for two years beyond the expiration of a contractor’s license. Making a claim against the bond company of a contractor is one way to recover money for redoing work that hasn’t been properly done.
It may be possible to recover money from the contractor’s own liability insurance policy. Also, if your project included performance/completion bonds (usually an extra 1% of the construction contract price) these bonds may pay for certain work that wasn’t done or that was done improperly.
And your homeowners policy may help. Some insurance companies make available lists of contractors that they suggest their policyholders use to make certain repairs. If a property owner uses one of the recommended contractors, many insurance companies will guarantee the contractors’ work for up to a year, said Mary Crystal, regional manager for the insurance industry’s Western Insurance Information Service in Los Angeles.
In some cases, withholding progress payments is a way to exercise some leverage against a contractor who isn’t performing up to your standards. Beware, however, that the contractor may turn around and sue you or record a mechanics lien against your property.
“Contractors frequently don’t want to admit that they may be responsible for a problem,” said Lee Barker, managing partner at the law firm Barker & Associates in Pasadena. “Sometimes they just want to come up with an interim fix that will hold until the statute of limitations allowing a property owner to sue them has expired,” he said. “Homeowners unknowingly lose their rights and they can’t recover.”
Of course, you could just ask the contractor to fix whatever the problem is. “It may not make sense, however, to have them come back and mess things up further,” Barker said. “Sometimes you have to simply ask for a money solution so that you can hire someone else to redo the work.”
If the property owner intends to file a lawsuit for breach of contract or for negligence, the general rule is that such a suit must be filed within three to four years of discovering an obvious defect. The time that a plaintiff will have to file a suit depends on factors such as the nature of the problem and how much the property owner knew about the problem. For latent--or not easily discoverable defects--home and condo owners may have up to 10 years to file a lawsuit, depending on the circumstances.
Only about 10% of all the construction defect cases actually get to court, however. Most cases are either settled privately or though mediation or arbitration or some sort of other agreement. Litigation is often so expensive that it’s better to first exhaust other ways to remedy a dispute with a contractor.
The best way to deal with a problem contractor is to avoid hiring one in the first place. A phone call to the Contractors State License Board can help you determine whether a particular contractor is licensed and what kind of complaints may have been lodged against him. It’s usually advisable to solicit written bids from at least three contractors; if one of the bids is much lower than the others, it’s probably too good to be true.
The board may be reached in the San Fernando Valley by calling its Van Nuys office at (818) 901-5168. The board’s Earthquake Response Center may be reached by calling (818) 908-4592. In Ventura, the number to call is (805) 654-4515. There’s also a statewide toll-free number, which is (800) 321-2752.
