Planning for trouble is the best
way to avoid it.
A homeowner recently asked a question about a dispute with a contractor,
so I thought this would be a good opportunity to review some key issues regarding
contractors.
·
Licensing. You have more protection if you use a licensed contractor. The two
licenses to look for are the Home Improvement Contractor license, issued by the
NYC Department of Consumer Affairs, and the General Contractor license, issued
by the NYC Department of Buildings.
If you use a licensed contractor, you know that the company
working on your property has at least a basic level of insurance, and less
unlikely to disappear in the middle of your job. To check both agencies, go to www.nyc.gov,
click on “NYC Resources”, then “Agencies”. Consumer Affairs and Buildings are
listed alphabetically. Each agency’s website has a link for consumers to search
for licensees.
·
Written Contract. Get a written estimate and a written contract! The
Department of Consumer Affairs requires that contractors give you a three-day
right of rescission in any home improvement contract. This means that you can
change your mind, without penalty, within three days after you sign the
contract. You can see a sample contract, and lots of other helpful information,
at the Department of Consumer Affairs’ contractor page: http://www.nyc.gov/html/dca/html/initiatives/contractors.shtml
·
Keep Everything in Writing. Put all of your communication with your
contractor in writing, and insist that the contractor do the same. Use email.
If you send regular mail, make it certified if it is important. Make payments
by check or credit card so that there is a permanent and verifiable paper
trail. Avoid making payments by cash.
·
Hold Something Back. Hold back final payment until you are certain that
everything has been done as required by the contract. A contractor looking forward
to final payment will be more motivated to make sure you are satisfied than a
contractor who has already collected all the money required by the contract.
·
A picture is worth a thousand words. Make a photographic record
of the job. Take “before” and “after” photos, and take photos of the work as it
progresses. Take photos of any damage caused by your contractor.
·
Mechanic’s Lien. If a dispute arises over payment, your contractor may
file, or threaten to file, a “mechanic’s lien”. This is something that can even
be filed by a subcontractor or material supplier even if you never dealt with
them directly. A mechanic’s lien is a formal claim for money that is filed in
city property records. A contractor, subcontractor of supplier has eight months
to file a lien from the time they last provided (or claimed they provided) work
or supplies. They then have one year to start legal action to “foreclose” on
their lien.
If you are served with a Notice of Mechanic’s lien, you
can file a bond to “discharge” the lien. This procedure removes the lien from
your title, but you still have to slug it out in court (or in arbitration, if
your contract says so) with the contractor.
You don’t necessarily have to wait for the contractor
to sue you. You can start legal action first. In New York City, depending on
the amount, you might go through Small Claims Court (up to $5,000), Civil Court
(up to $25,000) or Supreme Court. This is where your written and photographic
record will really pay off and save you a ton of time and money.
·
The Prompt Payment Act. If your construction or renovation project is for an
apartment building or larger commercial property, you may need to be aware of
the Prompt Payment Act (Article 35E of the NY General Business Law). This law is
complex, but it does not apply to the vast majority of residential construction
contracts. Be aware of it if you a large property holder.
Call, visit or click for more information:
Levy & Nau P.C. / attorneys at law
844-LEVY-LAW or
718-622-8150
854 Fulton Street,
Brooklyn NY 11238
www.LevyNau.com
