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I am sorry to hear that this construction crew is failing to perform under the terms of your contract. Just so that I can better understand the situation, is a permit required to do this type of work under your local building code?
Hi Bill. Thank you for taking the time to provide some guidance.
Yes, a permit is required
The nature of the job is plumbing, drywall and electrical (which is the problem area). They were also making a ADA compliant bathroom
Understood, thank you.
The threat of going to the city to pull a permit does not necessarily reach the level of blackmail or coercion regarding the contract (as the permit is required), but if the contract is terminated (you tell them that you do not want them to do any further work on the project, including both physical labor, and any clerical work, permit work, or any other efforts, their further conduct can be construed as both a breach of contract and a tortious interference with business relations.
They may have a strong position over you given the nature of your need to quickly finish construction without pulling a permit, but they are still in breach of contract, and their pay is completely reliant on finishing their work. If they did not do the work performed you cannot be forced to pay them.
(My apologies that should read: "If they did not do the work required to be performed you cannot be forced to pay them")
The breach of contract / tortious interference claims could be used to threaten that the contractors are responsible for all "reasonably foreseeable future losses stemming from their ongoing conduct" (such as pulling a permit without authorization). I do not know how successful the claim would be in court, but it would at least have merit.
Thank you Bill. I understand what you are saying. My concerning is that if I don't sign their release, I'm fearful that they would pull the permit. Are you saying that if I sent them a message saying that I don't want to do any further work (etc) that would take away their legal right to pull a permit?
...therefore I would not sign their release.
They do not have the right to pull a permit on your behalf after you release their services. (They are no longer your agent). They can report the work done without a permit, but they are running a risk as well, being licensed contractors doing non-permitted work.
The release is an easy way to terminate services on both sides (it is "clean"), but if they are not performing under the terms, and you send them a notice that you are terminating it due to their failure to perform, and identify any terms that you are willing to pay as compensation for their work already done ("quantum meruit"), you will have identified the termination, they can file suit if they believe they have fully performed (they will have to show this), and you can go from there (but it would require them to actually file a lawsuit showing they fully performed under the terms of your contract).
Ok. Thank you. I believe that answers my initial/primary questions.
Before I close out, do you know anything about the Contractor's State License Board. After this is all over, I would like to report them. I read that by law in california a contractor must not d work without a permit (even if requested). If I reported this, do you know what would be the penalty for me (if any)?
Depending on the scope of your work, it is possible that you will end up coming under scrutiny (required to pull a permit and undergo inspections to get the work approved). The scope of this post-permitting process, and any penalties, is something that is fact specific (some work is easily visible and can be inspected without any tear-down, while other work does require this kind of work). - In sum, if you report the contractor for doing non-permitted work, you do run a risk of having to get the permits pulled after the construction is done, and paying the penalty plus undergoing any associated costs if the work cannot be passed on a visual inspection.
Gotcha. I figured that.
Well, thank you again for answering my questions!
You are welcome. Thank you for using our service, I do appreciate your business. Please let me know if you have any further questions, and please do not forget to rate my answer. I do wish you the best of luck in this matter, and hopefully it will resolve itself quickly (the threat of a lengthy investigation is daunting, but a contractor's liability makes it somewhat hollow).
thank you again!! I appreciate it :)
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