We completed a private landscape job but owner is holding onto 5% retention progress payment because of a defective led strip lighting around pool. We've fixed the lights multiple times but it had issues because it was designed close to a pool. Now the owner is requesting we fix the lights but he will hold the payment for 6 months and if there are no issues then he would pay. He has a fairly big yard with a lot of lightnings. Its almost impossible to ensure that there won't be any issues within a 6 months period. I am not seeing hope that I will ever get paid. He already dragged this on for 2 years.
Is there a warranty in the contract? You should review that, and then try to determine exactly why the lights aren't working. If it is really a design issue, then that should be the designers problem. Or if the lights are defectively manufactured then the manufacturer should pitch in. If it is a problem with your installation then your best bet is to get them to sign a settlement agreement saying that they won't bother you with the issue anymore (you will probably have to let go of the retention to get a deal like that).
Yes, It is roughly 6k. Does mechanics lien work better or small claim in this situation? I am also concerned it might not play out my way. The contract does state 5% on completion of everything. However I also read online that owner can only withhold 150% of the disputed amount. The owner is basically claiming that it hasn't been complete as it has been faulty. The light did work when we finished but since it was around pool, once water penetrates it starts to have issues.
@ gregory reaume
No there wasn't any warranty on lights. Only on irrigation and hardscape. We tried multiple ways to correct the issue over the coarse of two years. we hired an electrician for consultant, on last attempt to fix the lights, we changed to ip68 (highest level of waterproofing rating) led strips, added more transformers, liquid taped all connections and added power lines of power. Everything worked when we finished and he agreed to pay for a second. The next day he changed his mind and asked us to proceed Notice of completion to hoa and submit a refund check for a plaster issue before he pays. We agreed verbally even though it wasn't based off contract. Noc got approved after two months and within this period he didn't notify me any issues. I immediately asked for payment and he argued for a refund check on plastering issue before the last payment. I refunded the check and he lets me know at this moment that the light has issue again. He also ask me to consent to his rules or else he won't give me another chance to fix the light. He rules were either I fix the light and he observe it for 6 month until no other problem happens then he will pay or he will make an addendum contract that he will pay me upfront but if there is an issue with the light within a year two times then he will get a full refund of the 5% retention. I told him he can dispute the light amount and just pay me what meets his satisfaction but he refuse and determines to terminate contract on his own
You could file a mechanic's lien. If everything worked throughout the time the owner should have paid you final payment, then there was no reason to withhold final payment at the time it was due and the owner would be subject to prompt payment penalties. In that case the owner should pay you and pursue a warranty claim. However, if it started malfunctioning within the time the owner could have paid you then that would be a "good faith" justification for withholding payment.
@ Gregory Reaume
Thank you. That makes sense. Does he have the right to hold all 5% retention or he can only hold the light amount and what do I do if he doesn't allow me to enter his property to fix the light. I want to properly document everything.
Just give a call to 213-926-1516 and we'll talk it over, that would be quicker.