Suing a General Contractor in Small Claimes

6 Replies

Hi everyone,

I figured someone might benefit from my experience so I decided to post my story here. I will try to keep it short but I will respond with any details if anyone asks.

I purchased a triplex in August 2017 that needed significant repair, my budget for the rehab was $95,000. I met with several contractors and received several bids. I narrowed down my selection to a contractor who I felt at the time was the right fit for the job.

We agreed upon a deposit of 5% for the total job. The company was on top of what I needed and very responsive from bid to contract.

Unfortunately, once the contract was signed and the deposit check for $4000 was cashed, I stopped receiving communication from the company. The start date for the job came and passed. No response to my phone calls, emails or office visits. The end date for the job came and passed. No response to my phone calls, emails or office visits.

So I sent an email to the company informing them that they were fired and the return of my deposit was expected. Of course I received an immediate reply to my email asking for forgiveness and a second chance.  I responded letting them know the contract was still cancelled but I would be open to their proposal for how they could get back in good graces. I did not hear back from the company about their plan to get make it up.

I continued to email and call the company with the request to return my deposit but they went silent again. Finally I filed a small claims case in Clackamas County, had the company served with notice, and several weeks later received a check for about half of my deposit.

I was unsatisfied with the balance returned to me. The contractor never swung a single hammer at the job site. 

I moved forward with the small claims case and sued the contractor for the full amount allowable in small claims ($10k.) The outcome of the case was the Judge berating the contractor for several hours while catching him in lie after lie due to my binder full of evidence, with an award of $9200.

I guess the lesson I learned and am trying to pass on is don't let bad contractors get away with it. I guarantee this contractor will think twice before he tries to run off with someone's deposit again.

Shout out to Ambience Remodeling for taking over the job and doing a great so far.

Thanks for posting. Great story and glad you ended up coming out on top. Sucks you had to go through it but I'm sure you learned some valuable lessons.

You are soooo lucky that you have 1/2 of the money back.  I lost $120k and $40k attorney fee after the drama. Lesson learned and I will never pay a penny up front for deposit. The contractor only get paid by their work in progress. 

 Glad you got some justice @Jacob Szeto  !  I know it can be very difficult to recoup your funds even when you win the judgement, unless they have a current bond.   Were you able to actually collect the $9200 the judge awarded?

Make sure your contractor's bond and insurance are active throughout your relationship. I've had situations where they were current at the start of a project, and it lapsed part way through, causing issues even after the project was over. 

If you work in Oregon, check out the CCB's naughty list of contractors with a history of complaints. http://www.oregon.gov/CCB/Pages/buyer-beware.aspx

You can also search specific contractors and see their history, insurance status and complaints: https://www.ccb.state.or.us/search/

If you have a residential developer's license, (which highly recommend if you are flipping homes in Oregon), you can set up a watch list of all your contractors and get alerts if their insurance or license lapses. https://portal.ccb.state.or.us/Modules/eWatch/

@Mathew Wray , I'll second your echo for Ambience Remodeling, Daniel is a worked for a number of our RareBird Investor Network members and they all have great things to say about him! 

Wow well played. Great to hear!

I just got burned for the first time this year for $2,000. Contractor was a guy I was friends with for EIGHT years prior to doing business together.

I chalk that one up to my relaxed attitude towards the transaction. You've inspired me to be a bit more vigilant though.

congrats again.

@Tyler Combs  

I submitted a complaint to the CCB so I could get access to his bond. Fortunately the CCB's letter to him scared him enough into paying so he wouldn't lose his license. 

Great tip on setting up alerts for contractor issues. I just wish anyone could do that.

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