Why am I responsible for fabrication/install o/t if I didn't authorize it

3 months ago

For my kitchen remodel my contractor had a $7k allowance for countertop install in his const. contract not including materials which I paid for in advance ($3k). Ironically once the install was complete he provided me a vague invoice for $7k exactly. I asked for a more detailed breakout which he provided 3 weeks later and included 18 hours of o/t was included which I never authorized- clearly backing into the number. with his subcontractor. Am I responsible for the o/t?

Senior Legal Associate Levelset
95 reviews

First, it’s worth assessing the contract. If the property owner isn’t required to sign off on overtime in order for it to be charged, then a failure to get approval for OT wouldn’t seem to matter all that much. Often, when a simple construction contract is used, a contractor will have the leeway in their contract to finish the project as they see fit, as long as the job is done on time and on budget.

Further, the terminology of the allowance might be material, too. If the contractor is entitled to charge up to $7,000 but isn’t required to tie payment to a specific metric (like hours worked, material or equipment used, etc.), then the contractor would generally be entitled to run all the way up to the allowable amount.

So, before igniting a payment dispute, it’s probably worth taking a deeper look into the terms of the agreement and whether or not the contractor would be entitled to charge that figure regardless of the questionable hours reported.

A contractor or sub can’t lie on an application for payment

Regardless of the above, a contractor or subcontractor is not entitled to fudge the numbers or lie on their invoice in order to charge additional payment. And, if a contractor is overcharging and submitting fraudulent invoices or payment requests, the contractor would not be entitled to payment over and above what should actually be paid based on the work performed.

At the same time, to justify nonpayment, an owner would likely need to provide more than just a hunch or coincidence. Requesting original documentation of amounts invoiced between a subcontractor and the prime contractor might help to sort out the situation, though, to show where the price came from and whether the numbers were toyed around with.

Withholding payment when there’s a good faith dispute

If there’s a good faith dispute over what’s owed on a California construction project, the owner is generally entitled to withhold up to 150% of the disputed amount. So, while an owner can’t withhold the entire payment to their contractor, they’ll be able to withhold 150% of the amounts they don’t believe are owed, as long as that’s a good faith belief, until the situation is sorted out.

More on that here: California Retainage Guide and FAQs.

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