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How would you deal with a super slow contractor?

In July 2008 we signed a contract with a septic system installer in northern Ohio to bring our system up to code (it was working, but local laws required it be upgraded.) There were some extenuating circumstances I know slowed him down (he broke his leg in Sept., snow starting in Oct, his employee, my husband's friend, had to go in for surgery to remove an eye tumor in early spring and lost his eye.) But every time we called he was "getting to it" but rarely showed up until we called and let him know our house was under contract and that if he didn't get the work done, we couldn't close. Suddenly, he was there the next day. Work went well and he got a passing tag for the system, so we were able to close two weeks ago. But there is still one problem the county doesn't know about that he needs to fix. He told my husband he was going out yesterday, but I haven't confirmed that actually happened. It could be a minor problem involving some digging, or a major one that would require removing the basement floor of the house...that we no longer own. I'm fed up because county regulations require that the work be done within 60 days of filing the permit, which was done at the same time we signed the contract with this contractor. I want to ask him for a discount, and somehow explain to him that we will not pay for this work anymore. He hasn't invoiced us yet because of this problem he has to figure out still. It's starting to snow in OH again, and if we don't either get it done or wash our hands of it, we're going to be waiting for another 9 months. It's no longer our house, and I don't want it hanging over our heads when we are trying to fix up the foreclosure we are currently buying. The thing that frustrates me most is this guy came with highest recommendations for high quality, timely work; so we chose him over much less expensive bids. Am I wrong to expect some sort of recompense? How would I go about asking for some? And how do I give this guy an ultimatum about how long he has to finish up? I also don't know how to deal with this if he tells us that the floor is going to have to come up to get to the broken pipes - it's not even our house! Thanks.

Public Comments

1. It seems like he probably has too many projects going on simultaneously and does not think of yours as a priority. Make sure he knows that the law has established the time frame he needs to be done in (within 60 days after the permit filing). Don't pay him anything until the job is done. Create deadlines that if the project is not done by certain dates you are going to discount the price by certain percentages (this is always a good thing to have with contractors from the start). Make sure to establish proof that he has knowledge of all of this and then if he does not follow with promises file a law suit.
2. I've been in the contracting business for over 25 years in PA and MI and have also served as an "expert witness" and claimant on contractor "failure to perform" and "delayed performance" lawsuits -- not as familiar with the related laws in your state. But, I would not lose sleep over this. If you managed to close successfully the new owner need not worry about inherited liens on the property that the contractor might file over non-payment issues he might get into with you. Plus it must have passed required inspections for the mortgage to have been approved in this market. So, as I see it, the condition of the house is no longer your problem unless you signed some sort of warranty agreement. If the contractor has not yet invoiced you, you currently have little obligation to owe him anything. If he does invoice you, the burden is on him to prove the job is complete per the original contract which it appears it is not. If it is not complete, you don't have to pay him the full amount. It is typical in most contracting anyway that 10% retention is held back by the owner until the job can be proven complete and passes any relevant inspections -- only then does the owner pay that last 10% to the contractor. You would have to check local regulations on what sort of time frame is mandated before that money is owed. My guess is that you may never hear from him -- sounds like he has problems and would rather avoid the conflict. For future reference, I recommend that before signing a contract or sales agreement with ANY vendor or service provider, that you establish in writing not only a price but a time frame by which the job will be completed, with penalties to the contractor established ahead of time for not achieving the deadline. Also, payment should be staged with no more than 30% up front (unless there is a justifiable need to pay for a lot of material) and then progress payments at established points over the course of the work based on actual completion up to 90%. Again, the last 10% doesn't get paid until any inspections have cleared and the "punch list" of any lingering problems or loose ends has been wrapped up. Obviously, if a genuine unusual natural disaster like severe weather or an accident pushes back completion there needs to be a clause for a written agreement as to how that's going to be adjusted for, but things like injured workers, personal problems of the contractor and bad scheduling decisions are NOT the clients problem and the contractor has an obligation to find a way to live up to his commitment even if it means getting another contractor to complete the work. If you know anyone who is a local realtor, I would ask them their take on the situation but my suspicion is that the septic woes of that house are no longer anything you will ever have to deal with. You could even fail to pay the contractor and tell him to take it to small claims court. I doubt the adjudicator would be too sympathetic to his case considering his failure to complete the work he agreed to. You might have to make a partial payment to him but it shouldn't affect your credit or dealings on other properties and projects.
3. With a contract in place, both of you are required to fulfil your agreements (ie: him doing the work - you paying the agreed price). The work has to be done before he gets paid. If the house has been sold and you are no longer the owner - he should carry a warranty for HIS work - regardless of who the owner is. Also - buyer beware! The new owner should have had a building inspection done as a condition of sale. Buying a house is like buying a used car... in some cases you do buy other peoples problems and have to pay to have them fixed... Your situation is a little dark as there seems to be a family/friend connection there which means you don't want to put anyone off side. I would remind him of his contractual agreement and insist he does the work. If it an easy fix then no harm no foul. If it turns out to be a major - this would be the new owners problem as the ticket has been issued by the county for the systems compliance. Hope that helps.