Legal Question in Construction Law in California
Construction Deposit
We are a contractor doing remodels. We require a deposit in accordance with the CSLB laws. Our customer gave us a deposit to do work on the work we quoted. We said we could not perform any of the work unless we had a signed contract. We fax it to them, mailed it, they came in and picked u p a copy. In the meantime they wanted inside details of our suppliers and such. We went around and around trying to get them material within their budget. They then canceled the job after a month. Stating 1st they didn't have the money to do the work. Until I found out from my suppliier that they actually changed the name on the account and they had the material picked up under another contractor under my negotiated pricing, they then came back and said didn't like the work that we done. I am thinking because they wanted their deposit back. We are now being sued for that deposit. Which we won't give back. Can you give me case law or codes where I am not required to give that deposit back so I can bring that to small claims with me.
1 Answer from Attorneys
Re: Construction Deposit
There are some inconsistencies in your description. You mentioned that you informed the owner that, "...we could not perform any of the work unless we had a signed contract." However, later you say, "..they then came back and said didn't like the work that we done."
So is the scenario that you did not have a signed contract and you proceeded with the work anyway? If so, you may still be able to claim you had a valid contract which they breached. This would mean that you have a cross claim against them for breach of contract which would generally entitle you to your lost profit on the contract. If it is more than $5,000 then you will be beyond the limit for small claims and you will have to remove the case to Superior Court.
However, if they did not sign the contract and you did not work on their home, then they are likely entitled to their deposit and you should return it quickly before they cause problems for you with the CSLB.
Contact us if you want representation on this matter.
Best of Luck.
www.SoCalConstructionLaw.com
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