Selecting a contractor and entering a home improvement contract

“This guy’s taking forever!”

An extremely common component of complaints received at the Division of Consumer Protection is that a contractor is taking what the consumer feels is an unreasonable amount of time to complete a project and has “disappeared.” Many of the timelines shared with our office would be considered objectively unreasonable by most. However, there are also many reasonable and uncontrollable factors that can cause even the best of contractors to fall behind. There are also moderate delays where reasonable people on opposing sides of the dispute can disagree on the severity of the problem.

It is critical, very early in the process, to discuss and document in your contract when you need to have a job done by, establish how flexible you can be, and attempt to plan for a job that can’t be completed for one reason or another.

Discuss and document in your contract when you need to have a job done by

This advice should not take the place of consulting an attorney, particularly for large and complicated home improvement projects – in fact, it is surprising even how many six-figure projects this office has been made aware of where no third-party advice was sought making sure that there was a clear and enforceable written agreement between the two parties! However, it is valuable to know that New York State’s General Business Law § 771 requires that written home improvement contracts include estimated start and completion dates for projects and must note whether those dates are “of the essence” or not – legal terminology meaning that meeting those dates is considered fundamental to the successful execution of the contract or not.

In general, dates that are not explicitly described as being “of the essence” may be treated more as estimates or suggestions if a conflict escalates to the point that it needs to be brought to court to settle a dispute.  This doesn’t mean a contractor can take “forever” to finish a job – but certainly there are many cases where reasonable people can disagree on exactly how tolerable a specific delay is.

Homeowners should note that if they are insisting that a specific completion date is “of the essence,” the contractor may understandably want to push that specific date out to include some “wiggle room” for unforeseen challenges or unexpected complications.  A sole proprietor may be reluctant to take on a job with such restrictions at all.

Homeowners must consider their own tolerances for delay and understand that a more demanding timeline may drive up costs or even make some contractors completely disinterested in the job.  However, we are aware of many, many projects where these conversations simply never took place at all, and no dates were documented whatsoever, which is an even worse situation that can lead to very bitter disagreements where, often, neither party is fully “right” or “wrong.”  Communication is key!

Simple home improvement contracts certainly don’t have to attempt to cover every single possible eventuality, but many don’t contemplate even the most common and probable situations and how they will be dealt with.

For example, many home improvement businesses are sole proprietorships or partnerships, and an injury to a single person could make it impossible to continue.  No one has done anything wrong, but now a homeowner and contractor are bound together by a contract that cannot be carried out as written. For more complicated projects, using project milestones and tying progress payments to those specific milestones could be an easy way to ensure that contracts can be more simply terminated if a contractor is simply unable to continue, versus the common practice of paying a certain percentage upfront as a deposit, and paying the remainder upon completion.

Many complaints that are mediated by the Division of Consumer Protection involve determining a fair refund to a consumer for a partially completed project where progress is stalled, for various reasons. The use of milestone-based payments could avoid or at least reduce the difficulty of having to calculate the value of what has been done so far in these situations.