Remodeling: No Contract, No Payment and No Verbal Agreements
A tile contractor whom we have known for about 4 years, and whose work is excellent, recently shared with my husband a situation he was up against with a customer.
This contractor has been doing tile work in high end homes around the San Diego area for the last 10 years. He worked under the licenses of general contractors for the first 6 years and in the last 3 years he is now licensed and has his own crew. He went through construction trade school to learn the legal side of the business and to study for his license. He understood the importance of clearly written documents and contracts and strives to be ethical and honest in all his business dealings with both customers and other contractors. And he’s learned the hard way on how to avoid getting taken advantage by both contractors and customers alike.
Now here’s the twist. He’s a Christian and he recently did work for a homeowner who happened to be a Christian as well. Apparently, the homeowner was impressed not only by his portfolio but also by a Christian symbol on his business card wherein they shared their Christian beleifs. And so he hired the contractor. The contractor proceeded to do the work, did some additional work at the request of the homeowner and finished the job. But when it came to time to pay, the homeowner refused to pay the entire amount for reasons I’m not entirely privy to.
But the reasons are not the problem.
The problem is that the contractor failed to provided a written signed agreement to the homeowner and simply relied on a verbal agreement believing that as a fellow Christian, he would honor their agreement. Now it’s his word against the homeowner who ended up calling the police accusing the contractor of breaking in to his home and stealing his tools. The police aren’t going to do anything as there is really no proof of theft and it’s one persons’ word against the other. They simply told him to take the contractor to small claims court. And the contractor has no standing in court as he doesn’t have a signed contract to stand on and is going to have to “eat” $5000. The homeowner too, will have little leverage in winning his complaint as it will likely be viewed as sour grapes in the eyes of the court as he also cannot prove theft and it will likely be thrown out. Turns out this homeowner has done the same thing to four other contractors who also got sloppy with their written agreements.
Clearly, having a detailed written agreement and signed contact is an absolute must no matter if you’re doing work for a friend or client and regardless if religious beliefs are similar to yours. This is business, not personal and in business we all have a responsibility to adhere to reasonable and ethical laws. Being a Christian doesn’t make you a perfectly honest human being and in hindsight, this so called Christian homeowner was simply using the guise of being one to take advantage of someone who is, trusting that the homeowner would do the right thing by honoring their verbal agreement. As a Christian, I find it hard to believe the homeowner was one and frankly, the devil was at work here in purposely deceiving contractors for their personal gain.
This also reminds me of an email I received last summer from a homeowner, a man whose wife insisted on going with her good friend and interior designers’, choice of contractor. He wanted to get a couple of bids to compare as well as interview other contractors but his wife just would not agree and so he gave in. Their budget was $350,000 and they signed a contract that in hind sight was poorly written with vague language and no protective clauses. The project ballooned to just under $700,000 and both the contractor and interior designer told the couple that this was typical and they should be happy with their new home. Those two were obviously in cahoots at the expense of the homeowners and it turns out that they had a reputation of doing this to other homeowners. The husband who emailed me was in shock and distraught in that he was set to retire in 2 years and now that was out of the question. Needless to say, that so called friend of his wife is now gone and their marriage is hanging by a thread. It still amazes me on what all people will share with me and offering words of comfort doesn’t take away the sting of getting burned.
I know all too well that this scenario happens frequently for both homeowners and contractors and that the best way to avoid the majority of problems is to have a detailed written agreement that includes protective clauses for both parties, along with a similarly detailed scope of work to guide the project. And that’s just to start with.
And verbal agreements? Forget about it!