Home>Levelset Community>Legal Help>Can a homeowner have another contractor come in and do work that my company was in the process of doing then charge me the difference in what they owe me and what they paid the new contractor? State of MO.

Can a homeowner have another contractor come in and do work that my company was in the process of doing then charge me the difference in what they owe me and what they paid the new contractor? State of MO.

MissouriRecovery Options

I was hired to do electrical work for a house that needed quite a bit of work done. (A house flipper/relator owns the home) We agreed on a price and items to be done. The person that owned the home didn't get proper permits for all the work that he was having done nor did any of the companies he hired (with the exception of my company as we did get a proper permit) and the city shut the rehab work down until the homeowner got the proper paperwork in place. That took about 3 months to do. I was financially put on hold until he got the permit and engineering docs straightened out. No pay. My crew started working on the project again when everythng was approved by the city. The city passed our service work and had the local power company come to hook up the new electrical system. The power company said they wanted a few other things done before they would hook the power up even though we passed the city inspection. My company attempted to do what was asked but they wouldn't accept the way we did the work. We came back on Monday to put the new part on and found the home owner had hired another company He did tell me on Friday that he was going to get someone to do what the power company wanted if we couldn't get it done that day or in a timely fashion. He not only had the new service work with the power company done but claimed thier was quite a few things that did not work and had the new company fix these items. (he said he found a few things that didn't work and the new company found things that didn't work as well.) I do have the homeowner's statement in a text that said he would give me the right to inspect what he said he was having to pay for with a new company as I did not beleive there was this large of issues as claimed He did not allow me to inspect or correct any issues as he had stated however The home owner now says he is taking the money he owes me to pay for hiring a new company. This job was at least 90% complete. My company had already provided the material and labor. I explained to him that when you switch power from the old system to the new one you can sometimes have a few things that need to be fixed. Things worked just fine before the switch over from the old system (panel) to the new one. We had a few lights to hang and an outlet that needed securing and besides doing the last check to see that everything we did was working, we were done with this project. Is the homeowner legally allowed to hire a new company and bill me for thier work? It is over $3400.00 according to what he tells me. Again, I do not believe that there was that amont of work that needed done and beleive he was either lied to by the new company or he is trying to get out of paying me since we are just about done.

1 reply

Jul 31, 2018

I'm sorry to hear about that. Ultimately, what an owner can or cannot do may come down to the contract signed with the property owner. The contract should set out the obligations and duties of the parties involved, including, hopefully, what to do when a dispute over workmanship or payment arises. If the contract is silent as to disputes like the one above, what an owner is or isn't "allowed" to do can get into a very grey area. Ultimately, if a dispute came down to it, the decision of whether or not a given action was proper will be up to the court - and predicting how a court might rule, especially when all of the details of a given dispute are not known, is impossible. Regardless - if work has been performed and gone unpaid, that work and nonpayment will likely give rise to mechanics lien rights, and leveraging lien rights is often a powerful way to compel payment. Before getting into whether a lien filing would be valid, it's important to note that a document like a Notice of Intent to Lien can go a long way to enforcing payment without actually having to file a mechanics lien or take some other legal action. A Notice of Intent to Lien acts like a warning shot - it states that, if payment isn't made, a lien will be filed. Considering mechanics liens are such a drastic remedy, a Notice of Intent to Lien will often either compel payment or at least get negotiations going between the potential claimant and the nonpaying customer. Further, because a Notice of Intent to Lien is actually required to be sent by some parties in Missouri (only those without a direct contract with the owner), a Notice of Intent to Lien tends to carry a little more weight in Missouri - often, a lien filing will occur a short 10 days after the notice is sent. All that being said, whether or not a lien will be a viable option will depend on whether the necessary consent of owner document, signed by the property owner, was obtained. (You can learn more on this topic and download a copy of the necessary forms here. and more about the applicable deadlines at our Missouri Lien and Notice FAQ.). Of course, regardless of whether a lien filing is the right move in this situation, there will be other options for recovery - as well as other options for demanding and attempting to compel that recovery without official legal action. Sending a demand letter that threatens specific legal action can be really effective, especially when sent via an attorney. If demands aren't enough, an action in small claims court might be an option - and you can find more info about Missouri small claims courts here. Finally, traditional litigation will always be an option potentially for a breach of contract or some other cause of action, but litigation can be risky and expensive. If this does sound like a desirable path, it's a good idea to consult a local construction attorney to explore potential avenues for recovery and provide advise.

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