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TexLaw
TexLaw, Attorney
Category: Legal
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Experience:  Lead trial/International commercial attorney licensed 11 yrs
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I am a home improvement contractor in MD I have an interior

Customer Question

I am a home improvement contractor in MD
I have an interior design client that I do a lot of work for
she need some work done on her home and hired me to do the work
she did not want to use a contract, I unfortunately agreed but we had an outline of work and costs we agreed to
there were extras on the work but i wanted to try and absorb the costs as a demonstration of appreciation to her for the work she sent my way
we are near the end of the project and now they are withholding a payment I need to finish and they are not responding to my claims for payment on the extras even though they have acknowledged they are legitimate
My question: I can not continue until I make money elsewhere to pay for what I need to do on their project;

can they hire someone else and charge me the cost over what they would owe me to finish and can I demand payment for the extras so I can finish and since there is no contract does either party really have any leverage
Submitted: 1 year ago.
Category: Legal
Expert:  TexLaw replied 1 year ago.
Hi,

Thank you for your question.

In the outline on the costs, was there anything that mentioned the extras?

Also, was there a payment schedule which you verbally agreed to?

Have they stated why they are withholding payment?
Customer: replied 1 year ago.

nothing mentioned extras


there was no payment schedule; after they got approval, they told me that insurance company would only pay one third at a time with balance at completion; I told them that I could not finance the project since I was doing it at a low fee as a favor


it is not clear; the balance to finish now exceeds the original amount because of the extras I have already paid for


I was hoping that other projects would have come on line by now so I could afford to subsidize the cosy of the project but they have not so I do not have the funds to make up the difference


if they paid for the extras there would be enough funds and they have acknowledged that there has been extra work but are now silent on paying for them

Expert:  TexLaw replied 1 year ago.
If insurance is paying for it, then there may not be an actual release of the funds yet to them so that they can pay you.

Since you have performed work which they requested and have not been paid for it yet (i.e., the extras), you could assert a claim against them for the rest of the payment. However, since there is no agreement between you as to you being paid in advance for the work, you will not be able to seek the remaining period until you've completed the work.

Likewise, they will not have a right to assert that you are liable for the unpaid portion of the work if they go and hire another contractor to complete.

You don't want it to get to that point though. I think you need to send them a certified letter that states:

You hired me to do construction on your property, which I agreed to do for X amount. During the construction, you instructed me to add in additional work and extras which put me over budget. I financed these extras out of my own account. We did not agree that I would finish the construction and then be paid, as I am not going to finance this construction for you.

If you want your construction completed, you will have to finance it yourself by paying me in advance so that I can complete the work. If you do not want to complete the work as agreed, then I will consider our agreement terminated. The decision is in your hands.


Or something similar to that.

Please let me know if you have any further questions. Please also kindly consider rating my answer positively so that I am compensated by the website for my work on your question. Rating does not cause an additional charge and will not prevent us from further discussing your questions.

Best Regards,
ZDN
Customer: replied 1 year ago.

I am not clear on the extras


I understand that since there is no contract neither of us has any rights but


isn't there a provision in the law I can use with them that says, even if there is no before the fact agreement to what the value for an item of extra work is, if you , the customer, accepts the extra work, you are obligated to pay for it, the value to be determined by negotiation after the fact

Expert:  TexLaw replied 1 year ago.
Yes, you are owed money for the extras regardless of whether there is a written contract or not.

When there is no written contract, the general rule is that they must pay you for the work you have done and the materials you have provided.

The value is what is the "reasonable" value for work as you performed and the materials supplied with a reasonable mark up. The amount that will be determined is going to be based on evidence of what other contractors in the same area charge for the same type of work.
Customer: replied 1 year ago.

OK, this sounds good so to recap this is my understanding


 


they do not have a right to claimdamages from me if the cost to finish is greater than what is left in the contract


 


even though there is no prior agreement for the extras, they are obligated to pay for reasonable cost for the work + reasonable mark ups as the industry supports


 


is that right

Expert:  TexLaw replied 1 year ago.
Yes.
TexLaw, Attorney
Category: Legal
Satisfied Customers: 4222
Experience: Lead trial/International commercial attorney licensed 11 yrs
TexLaw and 11 other Legal Specialists are ready to help you
Customer: replied 1 year ago.

I forgot to ask, since there is no contract and therefore nop "time of essence" provision, how much slack in time would I have if we continued to take to finish the work, if in the meantime I work elsewhere to make enough money to finish

Expert:  TexLaw replied 1 year ago.
Since there is no contract, you do not have to finish work which they will not pay you up front for. You did not specifically agree to finance the job for them.

The law would imply that you have a "reasonable" time to finish. That is why it is important that you send the certified letter with the language I stated above, to make sure that there is a statement of your understanding on the record so that if it ever comes up in court, you can point to the letter as evidence.
Customer: replied 1 year ago.


thanks

Expert:  TexLaw replied 1 year ago.
Sure thing. I hope this gets resolved for you.

Good Luck,
ZDN
Customer: replied 1 year ago.

I just found an e mail which stipulated, even though we do not have a contract, that I would agree to a three payment plan as proposed by their insurance company however, the final one-thrid is due on 3/26 (and does not stipulate that it is tied to anything, completion or otherwise.


 


How does this improve my position.

Expert:  TexLaw replied 1 year ago.
I think this improves it dramatically. The email confirms that they are agreeing to pay you the third installment on the 26th of March. They have not paid it.

I think you need to attach that to the letter you are going to send them saying you need to payment to complete the work.
Customer: replied 1 year ago.

To answer your inquiry, I did give you a tip, and an excellent rating.


 


The status of the dispute is that they have an attorney reviewing the file. I notified them that I would be notifying the insurance company of this dispute and they responded that since they are represented by counsel, I was not to notify the insurance company.


 


I replied that since the insurance company issues distribution payments to both my company and the policy hiolder, I felt obligated to notify the insurance company.


 


Do I have a right to do so ?

Expert:  TexLaw replied 1 year ago.
Hi,

Good to hear from you again. You do not have to follow their instruction. Their attorney only represents them, not you or the insurance company, so you are free to contact the insurance company if you want.

-ZDN

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TexLaw
TexLaw
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Lead trial/International commercial attorney licensed 11 yrs