How to Resolve a Complaint with a Contractor
Property owners HATE working with contractors, and for good reasons: battles, complaints,
arguments. Every project is different; orders change, estimates are missed, and
contractors work on other projects at the same time. Disputes of all kinds are just
waiting to happen. And they do.
You don’t want a lawsuit, and neither does your contractor. Now you can resolve
problems without spending lots of money and wasting lots of time. And it’s simple.
This How-to will help you in two ways:
- Prevent problems before they
come up. We’ll show you how to use the PeopleClaim complaints database to vet
contractors before your next project. And we’ve also assembled valuable tips from
both regulators and contractors that can save you headaches and dollars.
- Resolve disputes without lawyers
or courts. You’ll learn how PeopleClaim's online dispute resolution system can
give you muscle, allowing you and the other party to work out an agreeable resolution
and move on.
Check here first: the PeopleClaim complaint database
Check out any contractor you’re considering. Here’s how:
- Enter the business name into the Search field at the top of any PeopleClaim.com
page.
- Click Search and see if the contractor has any unresolved complaints in our system.
(If so, you’ll be able to read the actual experience reported by customers, plus
any response or dialog between the parties. Unlike some other sites this is not
just carping; each is an actual claim by a consumer who paid a fee and filed a claim
against the contractor.)
- You can also see the PeopleClaim business rating for any contractor in the database.
Click the business name to get to the company’s Business Page. A-to-F grades reflect
how well they respond to and resolve customer complaints.
Additional tips for preventing problems
Before you hire:
- Contact the licensing board. In addition to searching the
PeopleClaim database. it’s a good idea to check your state’s licensing board
for background info on any contractor you’re considering. Click here for a
directory of state licensing boards.
- Ask around. Find out who’s good. Talk to friends, neighbors, or associates
who have had similar work done.
- Talk to several contractors. Request references, and ask to see examples
of their work.
- Get at least three written estimates. In order to compare bids, it’s important
to give each contractor the same specifications. If bids differ significantly, drill
down and find out why. Be alert to conflicts of interest: for example, if you’re
looking at an A/C repair get at least one bid from a contractor who doesn’t also
sell compressors. You may get a more realistic picture of what your problem is,
and save the cost of a part you don’t need.
- Be wary of unusually low bids. The contractor who under-bids to get the job
will need to cut corners on quality, or find ways to raise the price during the
job. Or do both.
- Prefer licensed contractors*, and always check the license. A licensed contractor
must meet certain standards to get and keep his license, including proof of insurance.
With a licensed contractor you have more recourse if things go wrong. (More on this
below.) Tip: A license number printed on a business card or an ad shouldn’t
be taken at face value. Look it up; see if it’s genuine and current.
*Licensing requirements vary by state and by type of contractor. According to the
FTC, 14 states have no licensing laws regulating contractors, remodelers, or specialty
contractors other than plumbers and electricians. Check your local building department,
state consumer protection agency, or
licensing board for practices in your area.
- Find out who else will be involved. If your contractor doesn’t carry personal
liability insurance, workman’s compensation insurance, and property damage
insurance, you could end up footing the bill for injuries and damages that happen
on your project.
- Get a detailed written contract (not a one-page proposal or purchase order).
Poor communication is a primary reason for misunderstandings and conflicts later
on. Detail is important. The vaguer the contract, the greater chance you’ll be disappointed
with the work and told it’s “according to contract.” So make sure your contract
is specific. It should include exactly what work you want done; type, size, color,
and quality / brand of material to be used; warranties on material and workmanship;
start date and estimated completion date; and payment schedule; and a resolution
process in case of disputes. It should also spell out particulars like site cleanup
(known as a “broom clause”); whether you want to keep wood scrap or other leftover
materials; whether you’ll allow smoking or not; loudness of workers’ music systems;
limitations regarding children, pets, or privacy—anything that’s important to you. Essential:
Be sure your contract specifies that work must conform to applicable building
codes, and that obtaining necessary permits is the contractor’s responsibility,
not yours.
- Don’t sign until you clearly understand all terms. And remember, anything
you sign, formal contract or not, may be taken by the contractor as authorization
to go ahead.
- Have a cancellation clause. Make sure cancellation rights are stated in the
contract. Also, by law, contractors must provide a printed cancellation form at
the time of signing, which allows you to cancel within three business days.
- Get lien waivers from your contractor and subcontractors. Important: Without
a formal waiver or release it’s possible for subcontractors or suppliers who haven’t
been paid to place a “mechanic’s lien” on your property—which means, worst case,
you could be forced to sell it to compensate them.
Job underway:
- Limit your down payment. Expect to pay something as the job begins, but not
too much. No more than 30% down is a guideline suggested by some state regulating
agencies.
- Never pay cash. Be wary of any contractor who insists on it. Get receipts
for payments. Payment by credit card, if available, gives you extra protection if
problems arise: through your card issuer you can withhold up to the outstanding
amount owed on the job, plus finance charges, providing you’ve first made a good-faith
effort to resolve the problem with the contractor.
- Tie subsequent payments to performance milestones. Don’t set arbitrary payment
dates on the calendar; your payments can easily get ahead of the work. And never
make a final payment until the job is completed to your satisfaction.
- Require written change orders. Document all changes to the original contract.
Disputes arise too easily when changes are spoken but remembered differently (or
forgotten) by the parties. Write down any oral agreements and append them to your
written contract.
- Record job progress. Photos can be very useful, before, during, and at completion.
Also make notes of significant conversations and events, including date and time.
- Keep a job file Include: contract and change orders; plans and specifications;
receipts and cancelled checks; statements, invoices, cancelled checks; lien releases;
copies of written notes and correspondence; any notes re subcontractors’ activity
(dates, work performed) or materials delivery; photos.
- Stay in contact. Ideally the contractor or supervisor will brief you daily
on each day’s goals and progress, and call you when your input or decision is necessary.
But make sure to get a cell phone number for both contractor and project supervisor
so you can check in when you need to. But don’t overdo it—multiple calls each day
are seldom necessary, and can be annoying.
Final checklist:
- The job is complete when you’ve made your final payment and signed an affidavit
of final release. Before doing either, use this FTC checklist to make sure all bases
are covered:
- Does the work meet the standards specified in the contract?
- Do you have written warranties for workmanship and materials?
- Have all subcontractors and suppliers been paid?
- Is the site clean and clear of equipment and materials?
- Have you inspected and approved the completed job?
When you’ve got a problem
If something goes wrong with your project and you have a complaint, bring it up
with the contractor first. It’s the natural and easy thing to do, and it is often
the required first step if you need to escalate your complaint to public agencies
or others. Make contact in person, by phone, and/or in writing.
Using PeopleClaim to resolve your dispute
Filing your complaint online at PeopleClaim.com is an effective way to put it in
writing and get it to the other party immediately. PeopleClaim’s easy online process
helps you state your complaint and assemble all relevant facts: you can attach text
documents or photos, and even have the system make a timeline for you.
Above: Stating your complaint and attaching photos or documents
The contractor can respond using the system and the two of you can arrive at a resolution
together without need for outside help of any kind. Another advantage of filing
a PeopleClaim is that it gets attention and adds pressure and urgency. It can also
provide some beneficial neutrality: one man who filed a PeopleClaim against a landscaping
contractor wrote to tell us that he credited the online system with preventing him
from getting into a shouting match, which would have killed his chances for settlement.
Using the system he was able to get what he wanted and pave the way for a renewed
positive relationship with his landscaper.
Adding extra muscle
Some claims can be resolved pretty quickly once the other party understands your
problem and knows you're serious. The following PeopleClaim options get the other
party’s attention and let them know you mean business:
- Make it public.PeopleClaim’s public posting option lets you set a
deadline and have your complaint post online if the contractor does not resolve
things to your satisfaction. Contractors and businesses do not want people finding
unresolved complaints against them on the Internet. Note: your personal information
is kept private.
- Copy your claim to relevant government regulators, independent watchdogs, and
media. One mouse click and your claim can be mailed to your state attorney general
and/or consumer protection agency; to the contractors licensing board; to the builders’
association, and to consumer affairs reporters at print and broadcast media, including
relevant blogs. The other party sees how your case could escalate if not resolved,
and knows relevant agencies are aware of your claim. Note: Filing a claim
through a government agency will require a separate process, which you'll need to
initiate on your own if you're not contacted by the agency directly.
Above: Copy your claim to regulators or request special help.
- Invite a free consultation from lawyers through PeopleClaim. (This is voluntary,
and any further engagement would be between you and the lawyer. PeopleClaim does
not participate in any fees you may agree to.)
- Talk with others about your complaint. PeopleClaim makes it easy to share
information and ideas with people who have had similar problems. You can allow comments
from the public if your claim posts online, and every posted claim has a Support
This Claim feature that lets people vote for your cause. It’s super easy to share
a link with your friends and followers on Facebook and Twitter so they can see your
claim if it posts and add their comments and votes of support. When people get together
with the same complaint it’s a step forward for you, and a step the other party
may want to avoid.
If the other party doesn’t settle with you by your deadline, these incentives continue
to work after the posting date to get your problem resolved.
Other Dispute Resolution Methods
If the two of you can’t seem to work it out together, other recourse is available.
- Mediation and Arbitration. These out-of-court dispute resolution processes
require third-party mediators or arbitrators, who help the parties arrive at an
agreement. Mediation and arbitration services may be offered by state or municipal
licensing boards or departments of consumer protection— if the contractor is licensed.
In any case, it’s a good idea to specify a preferred dispute resolution process
in your written contract.
- Special Consumer Protection – Contractor Recovery Fund. If the contractor
is no longer in business, or a settlement cannot be reached, you may still be able
to recover damages—again, provided the contractor was licensed when hired by you.
A contractor recovery fund, paid into by all licensed contractors within your state
or municipal jurisdiction and managed by a consumer protection agency, may exist
in your area. Depending on the merits of the case, awards can be made from this
fund. Check the consumer protection department in your state or city to see if such
a fund is available, and how to apply for benefits.
- Small Claims Court. Depending on the amount in dispute, Small Claims Court
may be a consideration for getting a binding settlement. Small claims courts are
administered through state court systems. Dollar limits for small claims courts
vary by state, with most states under $10,000. Only 12 states have a limit of $10,000
or more.
Click here. for a list of dollar limits by state and a directory of
state court systems.
- Litigation. Embark on a lawsuit only after consulting a legal professional.
It makes no sense to go to court unless the potential recovery exceeds legal costs.
Contracting jobs are of all sizes, and all levels of complexity. If what’s at stake
is big and the issues are difficult, litigation may be a sensible approach. If not,
look closely at the alternatives before proceeding.