What Can A Contractor Do When The Owner Claims There Is A Problem With The Quality Of The Work?
If an owner claims that there is a problem with the quality of the contractor’s work, the best advice I can give to the contractor is to be honest with himself and with the project owner about the quality of work. No construction project ever goes perfectly. There will always be problem of one kind or another. Most often, the contractor will catch and correct those problems before the work is complete, but sometimes they don’t. If there legitimately is a problem, then the contractor needs to own it and make it right—not only because it is the right thing to do, but because it is almost certain that the contractor is contractually obligated to.
One the other hand, if the contractor believes that there is no problem with the work and that the owner is simply trying to get out of paying for it, and if the contractor is unable to come to an agreement with the owner about this issue, then attorneys should get involved, especially if the claim of poor workmanship is also resulting in a withholding or delay of payment. Sometimes these issues can be resolved quickly and sometimes they become more involved. A third party inspector may need to inspect the project in order to determine whether or not there is a problem with the quality of work. In some cases, one of the parties will file a lawsuit or initiate arbitration proceedings to resolve the disagreement. The overriding advice that I give to my contractor clients is to acknowledge where legitimate problems exist, and to correct them if necessary. If that is not enough to resolve the issue, then be prepared to move forward with legal action.
If A Payment Is Past Due, How Long Should A Contractor Wait Before Taking Legal Action?
The length of time that a contractor should wait before taking legal action to obtain past due payments will depend on the owner and the particular project at hand. One contractor might be willing to wait an extra month or two if they’ve worked with the developer several times before and have always been paid in full. However, if the relationship is brand new between the contractor and developer, then my advice for the contractor would be to exercise whatever rights they have under the contract.
On most commercial projects, an owner has about 14 days to review the contractor’s Payment Application. Once 14 days have passed and no objections have been raised to the items listed in the application for payment, then the owner will typically authorize its bank to issue payment to the contractor. If the owner or the bank has concerns with any of the items listed in the Payment Application, then they will still authorize payment for whatever part of that payment application they did not object to.
The above scenario is very common on commercial projects, but it’s not necessarily going to be the same for everyone. A contractor’s options for seeking payments should be spelled out in the contract, including exactly what rights each party has. If a payment is late, and if the contractor is having trouble making sense of what it is or is not allowed to do under the contract, a consultation with a construction lawyer should give the contractor the information it needs to decide how to proceed, including deciding whether filing a lawsuit or initiating other legal action is warranted.