When hiring a contractor for a construction project, a person can expect to pay some money upfront. However, the law has special rules for what happens after this initial payment if it exceeds 10% of the quote for the job.
These guidelines ensure fair practices and protect the interests of all parties.
When an initial payment surpasses 10% of the contract price, contractors must adhere to specific timelines. The contractor has a 30-day window to apply for any permits needed for the job. They also must initiate work within 90 days of receiving the payment. The goal is to prevent unnecessary delays.
Certain exceptions exist to the timelines to accommodate unforeseen circumstances. Contractors may be able to claim just cause for permit application delays. For example, unforeseeable obstacles in the permitting process can arise that require additional time for resolution.
If, for any reason, the contractor is unable to fulfill the permit application or begin work within the stipulated time frame, they can provide a refund of the initial payment. This would remove any obligations to meet the timeline.
One last exception is a signed agreement between the contractor and the individual making the payment that allows for a longer timeline. The agreement can extend one or both of the time constraints.
Should a contractor fail to meet the timelines, the consequences can be severe. Violations may result in criminal charges. Additionally, the person making the payment can pursue civil claims against the contractor to seek damages due to the delayed work.