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Can You Sue a Contractor and Get All Your Money Back: An Interview with Gary Daddario of Perkins & Anctil, Attorneys at Law

By Gary Daddario

Tell us a little bit about your firm and the areas of law that you practice.

Perkins & Anctil, P.C. is a full-service real estate firm. Among our attorneys, there are specialists in real estate closings, real estate development, condominium and association law, bankruptcy and litigation.

What are some of the most common contractor disputes for homeowners?

In our practice, we often see disputes between the newly-appointed board of trustees of a new condominium association and the developer/contractor that built the community. The particular issues range from improper budgeting and incomplete financials to defective design and construction. For individual homeowners, common issues include the failure of the contractor to maintain the timeline for the project, as well as allegedly defective work.

What are the first steps a homeowner should take if the work on their house was not done properly?

I believe that the first step to addressing a potential dispute is open communication. A homeowner should seek out and discuss the issue with the manager or owner of the contracting business. Contractors are often more cooperative in working to an amicable resolution when they are afforded an opportunity to address a potential problem early on and without the under pressure of threats of legal claims. In addition, many contracts used by contractors afford them the right to notice of alleged defects and an opportunity to cure.

When should they consult with a lawyer?

A homeowner with a contractor dispute should consult a lawyer if they believe there is a potential issue and any efforts to communicate (including any required by the contract) have failed.

Can you briefly talk about when a homeowner wants to sue a contractor but the work was done properly? Can the homeowner recover all of the money they paid the contractor?

Assuming that a contractor's work was completed properly, I would need to be informed of the homeowner's alleged claim in order to provide any insight. In general, in most cases, homeowners will not recover all money paid to a contractor. If some portion of the job was completed in a non-defective manner, then a legal principle affords the contractor the right to some compensation for even just that portion of work. In some cases, contractors close down a particular business entity and may or may not reappear in another form. In some cases, such maneuvers are designed to and may shield the contractor from liability. Even after obtaining a judgment, in terms of recovering the money on a practical basis, there is the issue of collecting on the judgment (i.e. actually obtaining funds from the defendant). In some states, including Massachusetts, there is a guaranty fund that may be of assistance in providing funds to wronged homeowners. In Massachusetts, among other requirements, a homeowner needs to have obtained a court judgment against the defendant contractor prior to being eligible for guaranty fund money.

What advice would you give homeowners about making payments to contractors?

Homeowners can safeguard against some portion of potential contractor issues by staggering payments associated with the project. Contracts should be negotiated such that a portion of the total contract price is provided as an initial payment (ideally no more than what is necessary for the contractor to purchase the necessary supplies) a subsequent payment is issued upon a defined point of completion and then a final payment becomes due after satisfactory completion of the project. Funds that will remain unpaid until satisfactory completion of all work are commonly referred to as a "holdback". Homeowners should negotiate a "holdback" of sufficient amount to motivate the contractor to reach the point of satisfactory completion of all work.

How can people contact you and your firm?

Perkins & Anctil, P.C. is located at 6 Lyberty Way, Suite 201 in Westford, MA 01886. Our telephone number is 978-496-2000. My e-mail address is gary@perkinslawpc.com.

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