Homeowner Advocacy in Home Improvement and Construction Contract Cases
Many homeowners are victimized by unscrupulous home improvement and construction contractors. In fact, the consumer affairs bureaus throughout New York substantially regulate home improvement contractors in their dealings with homeowners. Common issues with home improvement contractors include the following:
- Poor workmanship arising from the contractor’s lack of necessary skills
- Contactor abandons the project and fails to complete the work in violation of the law (also referred to as “walking off the job”)
- Contractor is not licensed
- Escrow Account violations. In many cases, a contractor must deposit advanced funds into an escrow account and a failure to do so may constitute both a breach of fiduciary duty and criminal larceny
- Contractor commits fraud, fails to abide by the terms of the contract, produces defective work, or uses different materials than promised
Adam Singer quoted in the New York Times: How to Avoid a Renovation Nightmare
Contractor licensing and home remodeling is kind of like the Wild West,” said Adam G. Singer, an attorney [focusing] in consumer protection with offices in Manhattan, Rockland and Westchester counties.
When it comes time to draw up a contract, make sure it stipulates that the contractor must put any advance payments into an escrow account, Mr. Singer said. This is one way to ensure that the contractor doesn’t use your deposit to pay for his next vacation. “If you’re nervous about how the contract should be worded, hire a lawyer to look one over,” Mr. Singer said. Click here to read the full article
The Law Provides Powerful Recourse for Victims of Incompetent or Deceitful Contractors
In New York, consumers are protected by state and local laws. If a contractor fails to comply with these laws, significant remedies are available to victims, including monetary awards for breach of contract.
Failure to use an escrow account for prepaid fees – If a contractor receives funds from a homeowner, the contractor is required to deposit the funds in a trust account. These funds cannot be used for any other project or for the benefit of the contractor. The contractor must keep accurate books and records that identify the particular project with respect to the use of the funds. The law also gives a homeowner the right to have these books and records inspected. Failure to keep records of escrow fund transactions is presumptive evidence of larceny. A contractor who uses the funds provided by a homeowner for any other purpose may be guilty of larceny (NYS Lien Law Article 3A, Sections 75, 76, 79).
Proper documentation of the agreement – The law establishes the requirements for a home improvement contract including:
- specifying the approximate or estimated dates the work will begin, when it will be completed, and contingencies that may delay completion of the work.
- A description of the work to be performed, the material to be provided by the owner, and the agreed upon cost for the material and consideration for the work must also be provided, as well as an acknowledgment that the contractor is required to place any advance funds into an escrow account, stating whether there is an agreed upon payment schedule (NYS General Business Article 36-A, Section 770-774).
County laws — Depending upon where you live, and where the contract was signed, there are also county laws designed to safeguard and protect homeowners against abuses by home improvement contractors. In many counties, for example, contractors are required to be licensed by the County. County laws also prohibit home improvement contractors from abandoning the project or failing to perform in any other way, making substantial misrepresentations or false promises or committing acts of fraud with respect to the contract or any other document related to project. There are similar laws in Suffolk, Nassau, Putnam, Rockland and Westchester counties as well as the five boroughs of New York City.
I came across the Web site for Adam’s practice when I was searching for a lawyer who could answer some questions and concerns I had about a home-repair contract, and I was impressed not just by the professionalism of his site but also the efficient, attentive way in which he and his office responded to me and arranged our consultation. I drove three hours to get to his nearest location, but it was well worth it even if not completely necessary; Adam in his great flexibility was cool with just doing the consultation over the phone, but I chose a personal visit to show him all the details and realia of my case. Once I was at his office, he was unfailingly gracious and hospitable to me, continually offering me refreshments and fretting over the long ride I’d made to meet with him and being concerned if I’d be O.K. for my late drive back home.
But during our consultation, what awed me the most was not only his Internet and research savvy and his encyclopedic knowledge of the applicable laws and regulations that might apply in my case but the clarity with which he could explain these matters to me, a legally-untrained layman, in readily graspable terms and concepts. Unlike a lot of lawyers and professionals I’ve had to deal with in my life, I never got the sense at all that Adam was ever being condescending or “talking down” to me in any way; to the contrary, I felt completely at ease with his friendly, respectful and interested manner. He even paid special attention to the geographic circumstances pertaining not just to my case but to my own personal situation, and that was especially striking in this day and age when hardly anyone knows or cares about geography or the character of specific locales. In the end, Adam’s solution for my issue totally calmed my mind because it was just what I was thinking of and hoping for, and Adam made it a reality. I left my consultation with Adam entirely satisfied and with a new appreciation for the legal profession when it is conducted by its finest representatives like him.
Penalties for Breach of Contract
A homeowner who enters into a home improvement contract based on false or fraudulent representations or written statements by the contractor has powerful legal recourse. An owner can bring a lawsuit and may be able to recover monetary penalties and additional damages as well as reasonable attorneys’ fees.
How Can I Protect Myself from Unscrupulous Contractors?
Work with a licensed contractor – Home improvement contractors doing business in certain counties are required to be licensed. You should verify that the contractor is licensed. Before you sign a contract, an attorney can advise you to ensure the contract adheres to state and local laws.
Make sure any deposits go into an escrow account – In most cases, upfront payments to contractors must be placed in escrow. The contractor may be criminally liable if any funds are used for another project.
Have a written contract reviewed by an attorney – A home improvement or construction contract should have important provisions, such as the price for labor and materials, milestones for additional payments, and a completion date.
Remedies if you Have Hired a Licensed Home Improvement Contractor
If you have been the victim of breach of contract, fraud or any other abuse by a licensed home improvement contractor, you have various forms of recourse available to you. An attorney can bring a lawsuit on your behalf under state and local laws to protect your rights and recover monetary damages. In addition, an attorney can work with local authorities who have the power to revoke a home improvement contractor’s license as well as to impose civil penalties for violations of the law.
Remedies if you Have Hired an Unlicensed Home Improvement Contractor
Home improvement contractors must be licensed in New York City, Nassau, Suffolk, Westchester, Putnam and Rockland counties. Even if you use an unlicensed contractor, you have legal recourse available to you. Unlicensed contractors cannot demand payment for their work even if the work was performed properly. If you are being sued by an unlicensed home improvement contractor, do not pay! Nonetheless, a homeowner may sue an unlicensed home improvement contractor to recover damages.
The Credit Report Law Group Protects Homeowners
By having an attorney represent you before the project starts, you can protect yourself from becoming a victim of an unprofessional, unskilled, or dishonest contractor. If you have already been harmed by a home improvement contractor, whether licensed or unlicensed, contact the Credit Report Law Group as soon as possible to preserve your rights.