Contractor and Consumer Claims

Contractor / Consumer Disputes & Contracts

A complaint may be filed by:

• A property owner alleging breach of contract, negligent or improper work
• An employee alleging nonpayment of wages
• A supplier alleging nonpayment for materials
• One contractor against another, for breach of contract, negligent or improper work, or nonpayment.

Each complaint is processed by a dispute analyst. In many cases, an investigation takes place. A field investigator reviews conditions and attempts to help the parties reach a compromise settlement of their dispute. More often than not, the parties agree to a settlement that resolves the complaint.

Contact Lynn Andretta to discuss your legal options and find solutions for any Contractor or Consumer related legal situations in Washington DC area.

Check with local and state laws but in general the following is standard.

Sometimes the parties cannot or will not agree to a settlement. In those cases an investigator will observe the alleged defective work items and prepare a report recommending that the item be repaired or that the defect allegation be dismissed. If the investigator recommends repairs, the law requires that the contractor be allowed to repair the defective work.

If the contractor fails to make recommended repairs or to satisfy the settlement agreement, the dispute analyst may require the complainant to obtain repair bids from other licensed contractors. The dispute analyst may issue an order proposing that the contractor pay an amount of money to the complainant or that the complaint be dismissed.

If either party objects to the order, they may request a hearing. Then, and in certain other situations, the case moves to the state Office of Administrative Hearings (OAH), where it is decided by an administrative law judge. If the claimant wins, the OAH will issue a cash award payable by the contractor. If the contractor does not pay the award, it may be paid from the contractor’s bond.

Surety Bonds

“Bonded” means that the contractor has posted a surety bond as required by law.

A surety bond provides a limited amount of financial security for property owners. Bonds can only be accessed in the event that the contractor is ordered to pay damages as the result of a final order, and the contractor fails to pay the order within 30 days. surety bonds are very small compared to the volume of business performed by most construction businesses and are designed to provide an incentive for contractors to pay orders, as opposed to being a comprehensive safety net for consumers.

Orders to pay damages may exceed the amount of the bond. Or, there may be more than one complaint subject to the contractor’s bond which may result in depletion of the bond before all disputes have been paid.

Statistics show that less than one half of one percent of licensed construction contractors fail to pay orders each year. In other words, 99% of licensed construction contractors take care of their customers’ service issues and pay their construction debts.

Required Liability Insurance

General liability insurance covers property damage and bodily injury losses caused by the contractor that occur as a result of the contractor’s work. Liability insurance will not normally pay the cost of removing, repairing or replacing bad work by the contractor. That’s what the surety bond is for.

Limitations on insurance contracts vary from insurer to insurer. Exclusions in a policy for specific exposures are common. Every policy is different, so it is important to understand the coverage a contractor has in place. You may wish to ask your prospective contractor to explain what its liability insurance does and does not cover.

Contact Lynn Andretta to discuss your legal options and find solutions for any Contractor or Consumer related legal situations in Washington DC area.

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