Legal Question in Construction Law in California

We are in Southern California, and have hired a general contractor to do our house addition and remodeling.The bathroom workmanship was poor. The general agreed that the work has to be redone and he told us that he will bring in an experience professional to do the work. Its been 30 days ago, the bathroom has not been worked on since. Meantime, there are other problems surfacing from his work, which he also agreed to correct. We told him that no further payment will be made until all the problems are corrected. He refuses to do any work if we don give him any more money. He had threatened to file Mechanic's Lien. We now realizes that the general contractor may be having some financial hardship. His workmen's comp has expired 12/16/09, and has not been renewed. His State Contractor's License is on notice of suspension if he can not provide a new worker comp insurance in seven days. We are afraid to continue on any work with him. How do we terminate his contract and find someone to finish the job.


Asked on 1/13/10, 12:30 pm

3 Answers from Attorneys

Daniel Bakondi The Law Office of Daniel Bakondi

He should still have a bond on which you can make a claim for money he owes you for poor work. Definitely hire an attorney, because without one he wont take you seriously. If you have an attorney terminate the relationship in writing, and inform him of the costs of putting a lien on your property, and your intended actions, you should have the leverage to avoid complicating the matter. I would be happy to review your case, documents, and write a letter informing the general of his options, and/or negotiating a resolution. Contact my office.

Best,

Daniel Bakondi Esq.

415 450 0424

[email protected]

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Answered on 1/18/10, 1:24 pm

Mr. Bakondi is correct that you need to hire an attorney if you want to continue to fight with the contractor about this, and escallate it. I do not believe, however, that he is an experienced construction attorney based on the rest of the advice he has given you. Terminating a contractor is a last resort, as it can lead to a raft of unintended consequences and unanticipated expenses. First off, you need to be prepared to prove that you have paid the contractor all that is due under the contract for work performed to date. If not, your refusal to make further payments may place you in the position of the party breaching the contract. Second, if you do have a legitimate owner termination and there is defective work, the idea that the contractor's license bond is a meaningful source of correction and completion funds shows a serious lack of construction industry knowledge. A contractor's license bond is only in the amount of $12,500.00, and that is for all the projects the contractor works on. So unless you are the only customer with a problem with the contractor, and unless the cost to correct any bad work and finish the job is $12,500 or less, the bond is of little use to you. Third, any reputable contractor, even in these hard times, will be very wary of completing a terminated job. Because there is no way after the work is done to conclusively prove what was original work, what was corrected work and what was completion work, the new contractor will have his backside hanging out for any and all latent problems that may be lurking in the work. Accordingly they will charge a significant premium over what they would have charged to do the same work as the original contractor.

I have spent most of my 22+ year career practicing in whole or in part in construction law. My last salaried job was Construction Counsel in the General Counsel's office at San Francisco International Airport. I have yet to see a construction dispute litigated to a conclusion that was anything but a loss for both sides when all the costs and disruption of lives and businesses was tallied up. In the same time I have seen numerous win-win settlements, and even the lose-lose compromises have been better in the end than the lose-lose fight that would have gone on if the parties hand not negotiated a resolution.

That is one of the main reasons I founded Libris Solutions, to provide mediation services to facilitate negotiated resolutions to problems that would only cost both sides thousands of dollars and untold hours of grief. I maintain conference facilities in Carlsbad, about an hour from you, and I do not bill for travel time, only actual mediation session time. I can also arrange meeting space closer to you.

If you and the contractor would like to consider mediation instead of escallating this to lawyers fighting each other and billing you both, please send me an email or give me a call.

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Answered on 1/18/10, 2:16 pm
Robert Mccoy Law Office Of Robert McCoy

If you file a lawsuit, you may be able to seize the contractor's bond. Once you seize his bond, he will not be able to legally do any contractor work. Thus, he will be under tremendous pressure to settle with you. I can assure you, this will very likely get you much better results than asking for mediation will.

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Answered on 1/18/10, 4:20 pm


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