When you own a property under construction, one of the most challenging issues you can face is having a contractor fail or refuse to complete their project work. As a property owner, what rights do you have under construction law when a contractor walks off the job without completing your project?
Understanding the Contract and the Project Scope
Your rights as a property owner when your contractor fails to complete work will depend on your contract. Having a written agreement and written change orders can best protect your interests, as you will have a record of the scope of work the contractor must finish, the materials they must use on the project, and their deadlines for completing it. In some cases, parties may enter an oral agreement for construction work or verbally agree to alter the scope of work. Although verbal agreements may prove harder to enforce, having evidence such as contemporaneous emails or text messages memorializing in-person discussions and agreements can help you assert your rights.
When a contractor walks off the project, you should review the documents relevant to your project agreement to understand your rights and options, including contractual provisions for delays, termination rights, and mandatory alternative dispute resolution.
Common Reasons Contractors Fail to Finish Projects
Some of the most frequent reasons why contractors fail to complete construction projects include:
- Financial difficulties or bankruptcy that leave them unable to afford labor or materials
- Overbooking or poor time management, which may force them to leave one project to start another
- Disputes over payment or project changes, which can result in contractors becoming frustrated with a property owner
- Lack of proper licensing or permits
- Personal emergencies, such as a contractor suffering health issues
Your Legal Options
When a contractor fails to complete a project within an agreed-upon deadline or a reasonable timeframe, your options for relief may include:
- Enforcing the contract through a demand letter to request the contractor return to the worksite and complete the project as contracted
- Withholding unpaid contract balances until the contractor finishes the scope of work
- Terminating the contract when a contractor’s failure to finish constitutes a material breach of your agreement
- Pursuing legal action to recover compensation for losses or expenses, such as damage caused by unfinished or substandard work or costs of hiring a replacement contractor (often at a higher price due to the emergency nature of the work)
Steps to Take if Your Contractor Walks Off the Project
Things you should do when your contractor leaves the project without notice and fails to return or informs you that they will not perform any additional work include:
- Gather and preserve all documents related to the project, including signed contracts and change orders, written communications, and photos of the current state of the project.
- Communicate with the contractor in writing to clearly state your expectations for additional work and deadlines for completion.
- Check with state licensing boards and inquire about the contractor’s available bonds to investigate recovery options.
- Send a formal demand letter requesting the contractor to return to complete the project and informing them that you will pursue legal action if they do not do so.
- Keep detailed records if you choose to hire a replacement contractor.
Finally, talk to a construction law attorney as soon as possible to discuss your rights to obtain relief after your contractor walked away from the project.
Contact a Construction Law Attorney Today
If a contractor has failed to finish your construction project, you need experienced counsel to walk you through your legal options for seeking relief. Contact August Law, PLLC, today for a confidential consultation with a construction lawyer to discuss your rights.