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How can I fire my rude, incompetent contractor?

By Virginia K. Smith  | May 2, 2016 - 12:59PM

I'm two months into what was supposed to be a 6-month gut renovation of my apartment, and I'm desperately unhappy with my contractor. His work is sloppy and sometimes he and his crew frequently don't show up for days at a time with little or no explanation. When I confront him, his behavior is bullying. We're already at least a month behind schedule. Meanwhile, my family and I are spending thousands of month on alternative housing. What is the best course of action at this point? If I fire him and have to spend more than our contract to get our job finished, shouldn't he have to pay us back for the extra money we spend?

While your contractor's behavior certainly warrants termination, any potential monetary compensation for your trouble will depend heavily on the terms of your initial contract, say our experts.

"The terms of the contract between the apartment owner and the contractor would control, and should provide for, the owner’s right to terminate the contract and/or for damages the owner would be entitled to for the contractor’s failure to perform its obligations in a timely fashion," explains Jeffrey Reich, a real estate attorney with Schwartz Sladkus Reich Greenberg Atlas. 

Ideally, says Reich, a good contract should have provisions for both a set completion date, and for "liquidated damages," in other words, a pre-determined daily fee the contractor will owe you if they fail to perform or complete the project on-schedule. "Such amounts often take into account fees assessed by a co-op or condo, as well as any associated relocation expenses," he adds. 

In general, this is something to keep in mind for future renovations: Instead of accepting whatever is outlined in the contract you're given (and which, unsurprisingly, likely includes terms that are more favorable to a contractor's interests than yours), ask your architect to draw one up, as they'll likely have experience with this kind of contract, and don't have an incentive to write the terms in the contractor's facor. In any case, have all documents reviewed by an attorney.

 "Unfortunately, many apartment owners do not seek the assistance of counsel in reviewing or preparing alteration contracts, and rely on the contractor's forms, which do not provide for a fixed completion date or liquidated damages," says Reich.

As for your specific case, take your original contract to an attorney to determine how much leeway you have—if there are provisions for set finish dates and damages, your contractor has already failed to hold up their end of the deal, and you can act accordingly.

While it might seem unfair, unless it's explicitly stated in your contract, it's not likely you'll be able to go after the extra money you spend hiring their replacement, or what's known as a "completion contractor."

Often, when contractors flake out on a job, the problems are related to financial issues, says Fraser Patterson, founder and CEO of Bolster, a service that matches renovators with architects an contractors. 

This means that going after them for money can be like trying to get blood from a stone, and your energies (and cash) are better spent vetting their replacement, and salvaging the project your former contractor derailed.


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