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Practical Legal Tips for Dealing with Contractors – Licensed and Unlicensed

On Behalf of | Dec 22, 2019 | Professional Liability

For those of you who are considering taking on a project, whether it is a remodel, new landscaping, or perhaps a built-in trampoline or pool, odds are you will need a contractor to come in and complete the project. Unless you have an abundance of time or are particularly handy, you will probably have to outsource the work to a professional. To help ease the process, we would like to outline some things to be mindful of as you reconfigure your backyard oasis.

It goes without saying that hiring an unlicensed contractor is fraught with problems. What do you do in the event they walk away with your money, do unsatisfactory work, or damage your property in some way? Cry. Unfortunately, licensed contractors are not infallible and come with their own set of problems. This is especially true in today’s economy. Contractors have been among those most impacted by the downturn in the Phoenix housing market and many people with contracts in hand have been left with incomplete or deficient work, lost a significant amount of money, and have no idea where to turn. Before addressing what to do in the event something goes wrong, lets start by discussing how to find the “right” contractor.

As you might expect, choosing a contractor based on referrals from friends or family is a good place to start. Additionally, having a couple contractors bid a project can give you a sense for the financial leap you are going to have to make. But by no means is that where your search should end. It is also prudent to take your dwindled list of potential contractors and research them on the Registrar of Contractors (“ROC”) website (http://www.rc.state.az.us/). There is a search function (“Check a Licensed Contractor”) that allows you to research a particular contractor. The results of this search will provide you with important information, including, the longevity of the business, the number of open and closed complaints filed against a particular contractor, whether that contractor was disciplined for those claims or if they have resolved all outstanding issues. As an educated consumer you can more thoroughly examine potential contractors and improve your chances of a satisfactory project.

After you have found the “right” contractor, the next stage is completing a contract. Most contractors use a standard form contract that they may not even understand. Regardless, it is important to be aware of the implications in the event the project is not completed to your satisfaction, or sadly, perhaps it is not completed at all. Ideally, you can secure the advice of an attorney. In the event you do not have the time or money to consult an attorney, there are several items to be mindful of when completing a contract that will protect your interests. At the risk of stating the obvious, at a minimum, ensure the contract is in writing, outlines the work being performed, the financial terms, completion date, and process for resolving any disputes.

Hopefully, your project goes off without a hitch. If, however, you run into problems and are unable to amicably resolve your dispute, you may have to file a complaint with the ROC. Typically, such a claim results in an inspection by a ROC representative, who will itemize a list of “corrective work” the contractor that must complete to avoid further scrutiny by the ROC. Presently, the law affords contractors fifteen days to complete work outlined by an ROC Report, unless the contractor and homeowner reach an alternative agreement to hold the claim(s) until the corrective work is performed to the homeowner’s satisfaction. Hopefully, a satisfactory conclusion can be reached. If not, formal litigation may be the appropriate next step.

In the event your licensed contractor succumbed to the struggling economy, legitimately or otherwise, you will likely need to file a claim with the ROC’s Residential Contractor Recovery Fund. The Recovery Fund provides an avenue to recover some monies you have paid to a licensed contractor that becomes insolvent or otherwise fails to complete the work for which they are paid. The good news is that it highlights the relative safety of using a licensed contractor. The bad news is that recovering all of your money is not likely and may take a year or more to accomplish.

If you have any questions, please contact SG Law.