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Are there requirements or procedures that need to be followed to send a Stop Work Order for Owner Breach of Contract

New JerseyConstruction Contract Payment Disputes

Owner refuses to sign, Date, approve and pay for add-ons, change orders and owner upgrades or sign, reject and I remove what’s been done according to his verbal or email requests at we install something different. If items are not approved they are to be removed at my expense. He keeps adding work verbally saying end of July we’ll approve then end of job we’ll approve and pay. It’s close to a quarter of a million I’m carrying. Owner is an Attorney and now saying CFA. Essentially putting the cart in front of the horse. He sent me a text saying my invoices are bullshit and with I go away or he’ll sue me for CFA. My contract reads that the add-ons need to be paid when invoices. He said he’s not paying anything. I trusted this man because he’s in an honorable profession. Hes completely exploited my Honorably Discharged Navy Veteran Instilled Core Value opinion of Honor. I took this man at his word and he’s out to “F” me. Essentially putting the cart in front of the horse. My contract is very clear as to how anything outside the scope of work is to be handled. I kept going based on his word and because of honor considering he’s a man of his word as I am since he’s an Attorney.

1 reply

Aug 27, 2018

I'm sorry that you have found yourself in these circumstances. And attorneys wonder why the profession gets a bad reputation. While I don't know all the relevant details here, using the position as an attorney to unfairly tilt the playing field and not pay somebody what they have rightfully earned is definitely not honorable nor the right thing to do.

There are a couple things to consider here, and - especially since the property owner with whom the dispute has arisen is an attorney - it is likely a good idea to engage an attorney of you own that can more thoroughly examine the issues and be there to lend assistance on both offense and defense, if needed.

First, to the extent the property owner has not complied with his obligations under the contract, there may be a breach of contract case to be made (and depending on the wording of the contract itself, attorneys' fees may be able to be awarded).

Further, when labor and materials are furnished to a property and are unpaid, a contractor is generally provided the opportunity to secure the debt through a mechanics lien. The lien is an interest in the improved property itself, and if the amount due is not paid, allows the claimant to foreclose on the lien and ultimately force the sale of the property to satisfy the debt if it is not otherwise paid.

In New Jersey, the requirements in order to claim a lien on residential property are complex and time consuming, however. New Jersey has enacted strong protections for homeowners as public policy, and has accordingly made claiming a lien on residential property fairly cumbersome. For residential projects, lien claimants must lodge for record a Notice of Unpaid Balance and Right to Claim Lien prior to filing a mechanics lien. Further, the lien claimant must also serve a demand for arbitration (with the American Arbitration Association, unless another party is specified in contract) on the property owner, and include a completed and signed copy of the Notice of Unpaid Balance and Right to Claim Lien and an affidavit that the notice has been lodged for record. If the arbitrator allows the lien claim to proceed, a lien may be filed within 120 days of last furnishing labor or materials to the project.

Another thing to consider, is the threat of action under the consumer fraud act. The CFA is weighted relatively heavily in favor of the homeowner against the defendant contractor. In fact, New Jersey courts have held that homeowners can recover attorneys' fees and costs for a contractor's technical violations of the CFA even when the contractor is successful in getting the CFA claims dismissed at trial. However, there is a bright spot for contractors in that the allegedly aggrieved homeowner must be able to show at the outset of the claim that the contractor's alleged CFA violation resulted in an "ascertainable loss" otherwise, the claim can be stopped. This can put the contractor in a difficult position, however, as if the claim is not dismissed for lack of standing, it will likely go through trial (barring settlement) and the contractor could be on the hook for attorneys' fees even if successful in defense.

Again, I'm sorry that this situation has occurred, and I hope you are able to recover what you have earned. It is likely best practice to enlist the assistance of an attorney to help you navigate this complex situation.

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