Contractor uncommunicative, work not completed - ideas?

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Contractor uncommunicative, work not completed - ideas?

Account Closed
Rental Property Investor · Toronto, Canada · Member since 2014 · 37 posts · 8 votes

Could anyone make a referral to lawyer specializing in home contractor disputes in the New York City area? Or have any ideas on how do deal with a contractor who has become unresponsive to my requests for receipts, itemized charges, and a walk-through to show me the work done?

Long story short, I bought a foreclosure rental house at the end of 2014 and had it renovated and ready to rent out in January 2015, except that the utility company kept refusing to turn on gas service. The house requires gas for heat and hot water, so I have been unable to rent it out. In late September 2015, I gave up on getting gas service after a long fight with the utility company, and I hired a contractor to set up electric heat and hot water. I also had the contractor install solar panels, and then the trouble began. The contractor said the solar panel installer found a hole in the roof and found that half of the roof was rotted out and said I'd need to get roof repairs, which I agreed to. While he was doing electrical work, he said one of his workers found that the some floors were rotted and had a mold issue due to a leak. He said he would complete all the work over Thanksgiving weekend. Then he went out of town due to a family emergency, he said, so work was suspended. Supposedly he had someone do some stuff in December, but when I asked him starting in mid-December for an itemized list of work done and charges for each, he kept saying he was out of town for family issues, things were crazy, his phone was dying, but would send me the information. I am still waiting to hear back from him. I also think he has made a number of unauthorized charges on my credit card after I had him charge a specific amount to start the work.

The contractor is now almost completely unreachable. His phone has been out of service, and he rarely replies to my emails. When he does, he only says things have been crazy and he would get back to me but still has not given me any of the information I have been asking for regarding status of work and receipts for expenses. I checked on the house the best I could this past weekend and did not see most of what should have been done (baseboard heaters, upgraded electrical system, electric water heater, solar panel system, etc.). I have filed disputes with my credit card companies for charges he made due to not receiving services promised, as well as fraud claims for unauthorized charges. Being a year behind schedule, I can't keep waiting and waiting for him. I need him either to refund my money or show me ASAP that everything he had promised is working, including how to work the solar panels. And I need to hire another contractor to finish the work. But I am unable to get any response from him. I am thinking I need to consult a lawyer. Does anyone have referrals or ideas? I am very frustrated and would appreciate any referrals or ideas!

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Aaron McGinnis
Contractor · Atlanta, GA · Member since 2008 · 978 posts · 985 votes
10y

Close the credit card or otherwise make sure he no longer has access. (And I assume we've learned our lesson about not giving a second party access to your credit card.)

Accept that you will probably never recover your losses from working with him. If you feel you must pursue it, hire a lawyer and prepare yourself for a long hard fight, at the end of which you'll likely discover that the contractor is literally worth nothing and getting money from him will be like getting blood from a rock.

Realize that in the future you need to be working with legitimate contractors, using legitimate contracts, with legitimate collateral in case things go wrong.

For now, hire that contractor (The legitimate one), and get your property in line with your exit strategy. 

Good luck. Consider this a tuition payment in the school of real estate hard knocks.

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  • Kevin Martin
    Jacksonville, FL · Member since 2013 · 226 posts · 115 votes
    10y

    Hey Kate, Do you have a contract with him? Is he licensed? Do you have a scope of work? I hate to hear stories like this because its puts a bad image on the rest of the great contractors out there. If he charged you card without your authorization or an invoice for the work completed then that is really bad or maybe just a mistake. However, if you have lost communication with him then I believe that would be your only option.  

    0Reply
  • Account Closed
    OP
    Rental Property Investor · Toronto, Canada · Member since 2014 · 37 posts · 8 votes
    10y

    No written contract. Just verbal, texting and email. The last time he gave me an itemized list of charges was November 2. I have been asking him for an updated invoice since early to mid December and am still waiting. He supposedly is a licensed general contractor and a licensed plumber, although I can't seem to find his name, and I did find the name of a company with a similar name to his but I'm not sure if it's the same company. I authorized him to charge specific amounts a few times when he needed funds to begin additional work, but sometimes additional extra charges would show up. I also was asking him about additional charges that were showing up in December, and he never answered my questions. He was always in the middle of something and his phone was usually about to die, but he was going to get back to me, and I am still waiting.

    0Reply
  • Hattie Dizmond
    Investor · Dallas, TX · Member since 2014 · 2k+ posts · 1k+ votes
    10y

    it won't help you with this situation, but it may prevent future pain...

    SOW (Scope of Work) itemizing precisely what work is to be done, the finishes and/or exact material to be used, who has authority to decide on any undeclared materials or finishes (you or contractor). Both you and the contractor provide written approval of the SOW. 

    Any change or addition to the SOW IS handled via a formal, written change control, which is acknowledged in writing along with associated costs. 

    The SOW should be followed by a formal written quote from the contractor, either T&M (which should then be detailed out at the same level as the SOW) or a fixed price bid. The contract should clearly state the time line for completing the work. 

    A contract should include the bid price, a copy of the approved SOW, a copy of the accepted bid, how materials will be purchased and your payment terms. 

    Never pay a contractor more than 40% upfront, and that's only of they are directly responsible for purchasing the materials. If you're paying directly for the materials, I wouldn't do more than 20% max up front. Everything else should be done on milestone payments, with a large enough completion payment attached to a final walk through to incent them to finish. I would also include penalties for not finishing on time. (You have to allow for change controls and/or things out of the contractors control, such as the exact tile you just had to have being on backorder.)

    If you do those things, you should have a good relationship with your contractor. It should also weed out the frauds. 

    2Reply
  • Aaron McGinnis
    Contractor · Atlanta, GA · Member since 2008 · 978 posts · 985 votes
    10y

    Close the credit card or otherwise make sure he no longer has access. (And I assume we've learned our lesson about not giving a second party access to your credit card.)

    Accept that you will probably never recover your losses from working with him. If you feel you must pursue it, hire a lawyer and prepare yourself for a long hard fight, at the end of which you'll likely discover that the contractor is literally worth nothing and getting money from him will be like getting blood from a rock.

    Realize that in the future you need to be working with legitimate contractors, using legitimate contracts, with legitimate collateral in case things go wrong.

    For now, hire that contractor (The legitimate one), and get your property in line with your exit strategy. 

    Good luck. Consider this a tuition payment in the school of real estate hard knocks.

    3Reply
  • Hattie Dizmond
    Investor · Dallas, TX · Member since 2014 · 2k+ posts · 1k+ votes
    10y

    also...you're in NY. Doesn't everyone have to belong to a union, if they are legit? Contact the appropriate union and see if they have a grievance process. 

    0Reply
  • Emilio Ramirez
    Contractor · Denver, CO · Member since 2009 · 399 posts · 166 votes
    10y

    Wow.... really sorry that happened to you. Hate hearing stories like this, but I continue to hear them. Lot's of good advice on hear and I second what Aaron said about getting your money back. I would check this out before you start down the road with your next contractor.

    http://www.ag.ny.gov/consumer-frauds/home-improvem...

    0Reply
  • Alex Franks
    Rock Hill, SC · Member since 2015 · 1k+ posts · 597 votes
    10y
    Originally posted by @Account Closed:

    Could anyone make a referral to lawyer specializing in home contractor disputes in the New York City area? Or have any ideas on how do deal with a contractor who has become unresponsive to my requests for receipts, itemized charges, and a walk-through to show me the work done?

    Long story short, I bought a foreclosure rental house at the end of 2014 and had it renovated and ready to rent out in January 2015, except that the utility company kept refusing to turn on gas service. The house requires gas for heat and hot water, so I have been unable to rent it out. In late September 2015, I gave up on getting gas service after a long fight with the utility company, and I hired a contractor to set up electric heat and hot water. I also had the contractor install solar panels, and then the trouble began. The contractor said the solar panel installer found a hole in the roof and found that half of the roof was rotted out and said I'd need to get roof repairs, which I agreed to. While he was doing electrical work, he said one of his workers found that the some floors were rotted and had a mold issue due to a leak. He said he would complete all the work over Thanksgiving weekend. Then he went out of town due to a family emergency, he said, so work was suspended. Supposedly he had someone do some stuff in December, but when I asked him starting in mid-December for an itemized list of work done and charges for each, he kept saying he was out of town for family issues, things were crazy, his phone was dying, but would send me the information. I am still waiting to hear back from him. I also think he has made a number of unauthorized charges on my credit card after I had him charge a specific amount to start the work.

    The contractor is now almost completely unreachable. His phone has been out of service, and he rarely replies to my emails. When he does, he only says things have been crazy and he would get back to me but still has not given me any of the information I have been asking for regarding status of work and receipts for expenses. I checked on the house the best I could this past weekend and did not see most of what should have been done (baseboard heaters, upgraded electrical system, electric water heater, solar panel system, etc.). I have filed disputes with my credit card companies for charges he made due to not receiving services promised, as well as fraud claims for unauthorized charges. Being a year behind schedule, I can't keep waiting and waiting for him. I need him either to refund my money or show me ASAP that everything he had promised is working, including how to work the solar panels. And I need to hire another contractor to finish the work. But I am unable to get any response from him. I am thinking I need to consult a lawyer. Does anyone have referrals or ideas? I am very frustrated and would appreciate any referrals or ideas!

     Kate this is why it so important to have contracts drawn up. I can kick my self over the years, for the money we lost with contractors. It even forced me to open a construction company. For s short time, I  ran a large 102 unit conversion myself. Money  was walking out the door. So I had to jump in.  Shut the company down after the project.  I learned the hard way.

    First I would  go see a lawyer, not sure what the law is in NY. South and North Carolina I had issues with contractor before. So I used the same lawyer . Not that it will do any good.  MOst times your trying squeeze water out of stone with these guys.I'm hoping he does not have access you cc any more. I would also go back through ever purchase he  made . You also got to cut your losses, and move on from this guy.  We all go through good and bad situations in life. Its how you deal with things now, and great lesson for next time. I'm sorry this happened  to you. Hopefully this turns out to be a great rental for you down the road.

    Alex

    0Reply
  • Michael Lovell
    Vendor · Norwalk, CT · Member since 2013 · 48 posts · 37 votes
    10y

    Have the work inspected by a reputable licenced general contractor or Home Inspector ASAP. They will know what kind of trouble your in. Hunt down your contractor at all costs. You do not want to be left in this situation.

    1Reply
  • Lawrence Blanton
    Investor · Wilmington, NC · Member since 2016 · 1 post · 0 votes
    10y

    In my opinion it all comes down to negotiating the draw schedule for contractors. Many times contractors run multiple jobs and have to "Rob Peter to Pay Paul". I know the OP was inquiring about what to do after the fact but thought this may help someone. Generally if you hold a little back each time they tend to return calls and show up. You have to keep that carrot stick thing going. I own a property maintenance company and deal with comsumers all the time who have dealt with this. Countless times I am contacted by consumers who have paid a contractor in full and have a 98% completed job. We have to come in and do the punch list that the contractor should have done. It's also good to have an inspector you trust that can put another set of eyes on completed work. If the contractor knows this they most likely will step up their game. Just my 2 cents and good luck with your endeavors.

    Also nothing against solar but I would never cut a hole in a perfectly good roof no matter the tax benefits. 

    0Reply
  • Andrew Graves
    New York City, NY · Member since 2016 · 10 posts · 7 votes
    10y

    I'm a project manager for a GC in NYC. Besides a contract and scope of work type contract you should also make sure your contractor is bonded and insured and issues you certificates for such. The Cert if Insurance should include liability and workers comp. If a contractor can provide these it is a good bet they are going to be reliable. 

    For people less familiar with construction having a owner's rep as either a property manager or an actual construction manager might be a good investment to oversee work like you're having done, especially if it's stopping you from being able to get the building rented or sold. 

    1Reply
  • Monique Rene Coates
    Consultant · Providence, RI · Member since 2015 · 117 posts · 37 votes
    10y

    We all learn from our BIGGEST mistakes don't we?  @Kate H. to get to a reputable lawyer that can help, try out Angie's List if you don't get a referral on here fast enough.  The referrals are completed by those who have good experience with the professionals they refer, and are based on location.  Good Luck!

    ANGIE'S LIST.com

    0Reply
  • Manolo D.
    Contractor · Los Angeles, CA · Member since 2015 · 4k+ posts · 1k+ votes
    10y
    Kate H. Sorry to hear what you have undergone. Like everybody said, you have almost zero chance of recovering your money. How much are we talking about here? If you can recover charges on CC, then that would be great. For cash/checks, or labor costs paid, I am afraid not. Even your contractor's board can't help you when you don't have a contract, or at least they won't be of much help if they could. If he gave you some info or at least a license number, that would help. If you find out if he truly is licensed and have his license number, there are at least 5 options for you. Best move is, take a bunch of pictures, print all texts and emails, document everything, and get a reputable contractor and rent that as fast as you can. It will not take any good contractor 4 weeks to do interior work, so you should be up and running by March.
    0Reply
  • Account Closed
    OP
    Rental Property Investor · Toronto, Canada · Member since 2014 · 37 posts · 8 votes
    10y

    Thanks to all who have responded. This fiasco was supposed to be a relatively small $4000-$5000 conversion to electric heat and hot water project that was not supposed to have happened in the first place but happened because ConEd, the utility company, keeps refusing to supply gas service. I just wanted the work done ASAP for as little as possible, since it was not budgeted for in the first place. I don't even know how much money is involved anymore. The last time the contractor emailed me an invoice was about $32,000 for solar panels, conversion to electric heat and hot water, and roof fixes, before fixing rotted floors for which he gave an estimate of $3500 + materials, and mold removal which he gave a $9500 estimate. I did not authorize mold removal work or charges because I wanted to get a second opinion from a mold removal company that gave a $4200 estimate. The contractor did say in passing that he removed some mold, but I have been trying unsuccessfully since mid-December to get an answer from him as to what exactly has been done and a revised list of charges. Each time I gave him my credit card to charge for materials and partial labor for additional work approved, additional random charges started appearing, and I have also been asking him since mid-December to tell me which ones were made by him. I have since had all credit card accounts closed with fraud claims for the unauthorized charges and merchant disputes for services not received for the authorized ones made by his company.

    0Reply
  • George P.
    Property Manager · Livonia, MI · Member since 2011 · 4k+ posts · 1k+ votes
    10y

    I am still trying to understand why coned is refusing service. 

    and why solar panel on an investment? 

    1Reply
  • Manolo D.
    Contractor · Los Angeles, CA · Member since 2015 · 4k+ posts · 1k+ votes
    10y

    @Account Closed Holy wow! And you did all that without a contract? You control the scope, looks like you fell into the "we need to fix this" chain reaction. If you had a contract, then it should mean that these "changes" are not authorized and will never hold up. To me, you have no recourse since you do not have any contract whatsoever. I might be wrong, but even if I am, and you win the case in court, you will still have to collect, the court can only order for the contractor to pay, then you have to hire a collection agency to actually collect.

    0Reply
  • Brian Pulaski
    Flipper/Rehabber · Montgomery, NY · Member since 2016 · 2k+ posts · 1k+ votes
    10y

    My recommendation is to find out exactly what you are out money wise, and get someone in to tell you what needs to be done. I assume you have been to the house and can see the progress. Bring in an inspector, then get 2-3 qualified bids in for finishing. Get it done, cut your losses and move on.

    Do you have signed lien waivers from your missing contractor? If not, fingers crossed he doesn't lien the property and claim you never paid him for work done. Very stressful situation.

    0Reply
  • Manolo D.
    Contractor · Los Angeles, CA · Member since 2015 · 4k+ posts · 1k+ votes
    10y
    Brian Pulaski Contractor can file a lien without a contract? Can you provide where you got that info?
    0Reply
  • Brian Pulaski
    Flipper/Rehabber · Montgomery, NY · Member since 2016 · 2k+ posts · 1k+ votes
    10y
    Originally posted by @Manolo D.:

    Brian Pulaski Contractor can file a lien without a contract? Can you provide where you got that info?

     Not 100% certain, but anytime I have work performed, lien waivers are a must. I guess if they had no contract, it might be tough, but I wouldn't put it past someone to try and still muddy everything up.

    0Reply
  • Account Closed
    OP
    Rental Property Investor · Toronto, Canada · Member since 2014 · 37 posts · 8 votes
    10y

    Wow I had not heard of lien waivers. That contractor is still unreachable.

    0Reply
  • Manolo D.
    Contractor · Los Angeles, CA · Member since 2015 · 4k+ posts · 1k+ votes
    10y

    @Brian Pulaski The answer is No, they could not file lien waivers. Be sure next time, you might advice someome wrongly and could put them in harms way.

    @Account Closed Move on.

    0Reply
  • Brian Pulaski
    Flipper/Rehabber · Montgomery, NY · Member since 2016 · 2k+ posts · 1k+ votes
    10y
    Originally posted by @Manolo D.:

    @Brian Pulaski The answer is No, they could not file lien waivers. Be sure next time, you might advice someome wrongly and could put them in harms way.

    @Account Closed Move on.

     I'm not sure my advice would put anyone in harms way. However even without a written contract, a verbal contract, especially backed up by work performed, could hold up in my opinion.

    Oh well. I say get your bearings, figure out how to finish the project m, and get it done.

    0Reply
  • Gilles Gutnecht
    Rental Property Investor · Atlanta, GA · Member since 2019 · 6 posts · 0 votes
    5y

    @Hattie Dizmond this doesn’t apply in all markets. When the market is overheated and money is cheap, no contractors will start for less than an absurd amount upfront >60% (if not more) because that’s what people pay.

    Ran into that issue... searched for contractors that would work with 20-30% upfront for an entire month, then gave up... was forced to hire one with 50% up front and sure enough I got screwed by him.

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