Legal Articles - Construction Lawyer

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When it comes to home improvement, homeowners and contractors mut have mutual trust and confidence. Homeowners deserve quality finished work, and contractors deserve prompt and fair payment. A written contract is one of the ways in which the parties can ensure a fair bargain and hold each other accountable. This article suggests a number of ways that homeowners and contractors can avoid getting dragged into costly and time-consuming lawsuits. 

Pool Installation Gone Wrong

When one client was defrauded by a pool installation contractor, we recovered the money that she paid for a pool that was never installed. 

The client hired a pool installation contractor to install a swimming pool in her back yard for her grandchildren. The estimate was $58,000.00, and installation was scheduled for October 3, 2016. The client paid a deposit of $2,500.00, in addition to the first installment of $18,500.00. However, the contractor failed to start the project as promised on October 3, 2016; and by November it was too late in the season to begin excavation. The contractor promised to begin the project in April of 2017, however, he again failed to start as promised. 

What should you do when the contractor stops responding?

Consult and experienced attorney. When the client attempted to contact the contractor, he either (a) dodged her calls, or (b) attempted to bully her (68-year-old female customer). The contractor continued dodging the client for several months using elaborate excuses about delays with the engineer, survey and plans. The client eventually told the contractor to either finish the pool by August 3, 2017 or return the $21,000.00 that she paid. When the contractor failed to complete the project or return the client’s $21,000.00, she hired us to represent her. 

What should your attorney do when the contractor stops responding?

Sending a Demand Letter pursuant to M.G.L. c. 93A is an appropriate first steps when the client was a consumer. Our Demand Letter set forth claims for breach of contract and violations of c. 93A, however, the contractor failed to respond. This prompted an extensive investigation during which we uncovered the contractor’s decades long history of larceny and fraud beginning in Connecticut. Based on our investigation, it appears that after the contractor served prison sentences in Connecticut, he started moving North through Rhode Island and into Massachusetts. The Judge found that the contractor owed the entire $21,000.00 plus interest, however, the contractor’s lack of assets was a problem because we couldn’t collect the money owed. At this point, we determined that a different strategy was required, so we meet with local law enforcement officials, and provided them with documentation that resulted in criminal charges. We made arrangements to have the contractor served with the civil lawsuit when he appeared for his criminal case. The combination of the civil and criminal cases both pending before the same Judge in Stoughton District Court worked to our advantage and the contractor was held accountable for his actions. The Judge required the contractor return all of our client’s money and ordered him to pay an additional $14,533.72, on top of the $21,000.00. Many other victims unfortunately were not able to recover their money. Thankfully, the contractor’s Home Improvement Contractor registration was recently suspended in Massachusetts. 

Steps for homeowners and contractors to take.

1. Research, but be weary of website reviews.

2. Get multiple estimates.

3. Verify a contractor’s home improvement registration status with the Home Improvement Contractor Program of the Office of Consumer Affairs and Business Regulation, which provides arbitration claims with the Residential Contractor’s Guaranty Fund.

4. Verify insurance.

5. Have a written contract that:

a. Complies with M.G.L. c. 142A (Home Improvement Contractor Statute);

b. Has a payment schedule with installments and the final installment due upon completion of the project. 

c. Specifies the scope and nature of the work.

Commercial construction projects of $3 million or more are subject to the Prompt Payment Act, G.L.c. 149, §29E (“PPA”), which ensures prompt payment, or resolution, of disputes about, invoices for periodic payment made by contractors during the course of work. It requires owners to approve or reject periodic payment requests within 15 days after submission and issue payment within 45 days after approval. Rejections must be in writing; specify the factual and contractual basis for the rejection; and be certified as made in good faith.

In Tocci Building Corporation v. IRIV Partners, LLC, et al., Docket No.: 21-P-393 and 21-P-733, the PPA was construed for the first time by the Appeals Court. IRIV hired Tocci as the general contractor to construct a commercial building. During construction, Tocci submitted seven different progress payment applications. IRIV failed to reject within the time or manner prescribed under the contract and statute and didn’t explain
the factual and contractual basis or have a good faith certification. When Tocci sued, the judge determined that Tocci’s applications were deemed approved because IRIV didn’t comply with the PPA. On appeal, IRIV argued that the judge’s order and judgment were in error and IRIV was justified in withholding payment based on Tocci’s alleged breach. However, statutory
compliance was the main issue and the Appeals Court held that the legislative objective of ensuring “prompt payment or rejection-and-resolution” would be undone if IRIV was permitted “to retain the moneys wrongfully withheld in violation of the statute until the final resolution of
their post completion contract action” because “[t]he point of the legislation is that these payments may not be withheld, even on valid grounds that they are not due because of a breach of contract, unless a timely rejection is made in compliance with the statute.” The decision did not waive IRIV’s claims for breach of contract because they were not included in a
proper rejection under the statute. It doesn’t bar such claims or require payment for incomplete or substandard work. Payment is properly withheld if in writing with a good-faith certification and timely.

The time periods for each application shall not exceed: (i) for submissions, 30 days, (ii) for approval or rejection, 15 days after submission, and (iii) for payment, 45 days after approval. If no approval or rejection within 15 days, the application will be deemed to be approved. 

Similarly, strict compliance is required for proposed change orders involving increased costs for materials and labor or extensions. For delays from COVID-19 or other unforeseen events, by the time construction commenced or resumed, the cost of materials and labor increased forcing
many contractors to renegotiate the contract price. §29E(d) requires such requests be paid or rejected within 30 days of submission; and failure to respond is deemed an approval. Parties must also pay close attention to their contract, which may establish detailed procedures to be followed in order to recover costs for extra work or added expenses, especially where the
failure to strictly follow those procedures precludes the contractor from being reimbursed. LawrenceLynch Corp. v. Department of Envt’l Mgmt., 392 Mass. 681, 686 (1984); see Glynn v. City of Gloucester, 21 Mass.App.Ct. 390, 395, rev. den., 396 Mass. 1107 (1986) (contractor’s failure to invoke its remedies under agreement precluded recovery).

In compliance with the PPA, if an owner rejects either a periodic payment request or a change order request, the rejection must be timely, whether in whole or in part. Further, the rejection: (i) must be in writing, (ii) include an explanation of the factual and contractual basis for the rejection, and (iii) be certified as made in good faith.

When contracting under the PPA, remember that procrastination equals payment. If there is a dispute under the statute, the strict compliance – not the merits of your justification for withholding payment – are paramount to recovering costs upon completion.

• Adverse possession;
• Easements;
• Covenants;
• Boundary line disputes;
• Fence line disputes;
• Parking lots and spaces;
• Solar arrays;
• Roads and ways;
• Reservation of rights;
• Zoning Boards of Appeal;
• Planning Boards;
• Conservation Commissions, and other municipal organizations.

As one of the oldest states, the Commonwealth of Massachusetts has a rich history of property rights, both public and private. While this may beinteresting to historians, it can be confusing and burdensome to land owners.

To protect your property rights, you need an expert with Land Court experience, and knowledge of how property rights have developed over time to protect your future. 

Preston Clinton is the legal expert you can rely on to navigate state and local laws and regulations. His years of court room experience are an asset when petitioning on your behalf before municipal boards and commissions.