QUESTION

Can a contractor charge full price for items that are not complete or unacceptable?

Asked on Oct 22nd, 2012 on Construction Law - Colorado
More details to this question:
Contractor wants full and final payment and work is not completed or inadequate. He is threatening a lien.
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2 ANSWERS

Construction Law Attorney serving Greenwood Village, CO at Cyrus Rajabi, Attorney at Law
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The agreement between you and the contractor will be determinative.   If you do not have a written agreement, you will want to work with your contractor to prepare a written punch list and agreement which will govern how and when the remaining items will be completed and/or corrected prior to payment in full. With regard to the lien, C.R.S. § 38-22-128 provides that a person who files a lien for any amount greater than is due without a reasonable possibility that the amount claimed is due and with the knowledge that the amount claimed is greater than that amount then due, and that fact is shown in a proceeding under the mechanic’s lien law, forfeits all rights to the lien, and is liable to the person against whom the lien was filed in an amount equal to the costs and all attorney fees.  The obvious intent of this provision is to punish claimants who abuse the mechanic’s lien law. You may wish to retain an attorney in order to perhaps escrow money so that the contractor and you are comfortable with respect to how the matter will be handled and that the funds are in the hands of a party which will handle the funds according to an agreed set of instructions. Please note this response is general in nature and is not legal advice. No attorney client relationship is formed by it.  Furthermore, the response does not represent the opinions or views of LexisNexis or its affiliated companies. I hope this information is helpful. Kind regards,   Cyrus Rajabi
Answered on Nov 19th, 2012 at 4:13 PM

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There is no quick answer. Not knowing more about the contract or terms of agreement between you and the contractor, it is difficult to know whether you have an obligation to pay full price for items that are not complete or unacceptable. Also, it would be important to know in what manner the items are incomplete or unacceptable. In Colorado, a contractor can be deemed to have substantially complied with the terms of a contract and though certain aspects may be completed or repaired, it requires payment by the other party to the contract.  There are very specific requirements when filing a lien, and it is not ideal if a lien gets filed. It sounds like you should sit down with the contractor before it comes to that. I would recommend that you consult with an attorney, depending on the size of the dispute, to discuss the best and most efficient method to reach a resolution. Perhaps that would involve the use of a private mediator who could help reach an agreement with respect to the work yet to be done and when and how much money is still to be paid to the contractor. I would start by searching Lawyers.com for attorneys who specializing homeowners in construction defect and lien matters. Most attorneys would be happy to have an initial conversation with you, at no cost, to help determine the best course of action.
Answered on Oct 23rd, 2012 at 11:18 AM

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