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No matter how carefully you pick your contractor, a dispute with your general contractor is possible.
Fortunately, you have several options to resolve it — a time-consuming and expensive lawsuit isn’t always necessary.
Talk to your contractor about one of the options below if you can’t see eye-to-eye. Your remodeling contract may require that you and your contractor try one of these options before turning to the courts.
A state or local agency. Your state’s contractor licensing agency may have a resolution program for general contractor disputes. Your county may have one as well.
Mediation. Typically, this is a retired judge or senior construction litigator who hears the respective positions of both parties in the general contractor dispute. Mediators help each party understand the other’s point of view and facilitate a settlement. Their opinions aren’t binding on either party.
Binding arbitration. Similarly, a judge or litigator will act as the arbitrator and hear both sides of the story in a general contractor dispute. Arbitrators will render a decision, which is binding on both parties. If it’s not to your liking, you have no right to appeal.
Local courts may recommend mediators and arbitrators. Also, you can find mediators and arbitrators at the nonprofit American Arbitration Association. Costs vary widely by location and the level of complexity, but as both parties share the cost, you’ll probably spend less than you would in litigation.
If you can’t agree on mediation or arbitration, try small claims court, which differs from traditional civil court:
They’re limited to small amounts, with upper limits usually in the $3,000-$5,000 range.
They assume you won’t be using an attorney and tend to provide user-friendly instructions on procedures.
Rules can vary from one state to another, but you will find some generalities:
The jurisdiction of the dispute may be defined in your contract but if it isn’t, you can file in the county where your contractor is located, where you live, or where the property is based.
Contact the clerk of the court to obtain and file the necessary paperwork — most courts make the information available online.
Filing costs average around $50, and you may incur additional fees for collection if your contractor loses and still doesn’t pay. You’ll need solid documentation to show you were harmed.
The process is usually less expensive than civil court and often a lot less painful, although you may have to do a lot of prep work and there’s no guarantee.
If your dispute is more than the amount allowable in small claims, start your journey through the legal system. Find an attorney with extensive experience in contractor litigation. Your attorney can guide you through the process, and you’ll be out-of-pocket for filing expenses. Filing fees will run from $250-$800 depending on the court in which you file.
You’ll also be looking at attorney’s fees, which can be paid on a contingency basis (a percentage of what’s recovered), or on an hourly basis ($200-$500 per hour).
Barbara Eisner Bayer has written about finance for Motley Fool,Daily Plan-It and Nurse Village, and is the former Managing Editor of Mortgageloan.com and Credit-land.com.She splits time between a beachfront condo and a mountain retreat.
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