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Question DetailsAsked on 2/23/2017

A company working on your home sub-contracts out a part of the job,can they charge you 3x what that co. chared

I hired Servpro to come to my house for a mold issue. They did all the work regarding removing the drywall and floors, and cleaning for the mold, they hired a mold company to conduct the mold pre/post test. They finally sent me a bill and I found out that they are charging me 3 times the amount of money that the mold company charged to do the pre/post test. I was just wondering if they can legally do this. I am okay paying what I owe, but i do not feel i should pay 3 times the amount the company charged. any helpful information you can provide will be appreciated. thanks.

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1 Answer


First, read the contract regarding subcontractor and/or materials cost markups - if spelled out in there that they will mark up subs 200% then you are probably stuck.

One question - if they gave you an up-front cost for the work and held to that amount, then you have no complaint - you agreed to a lump sum and if you did not ask for a breakdown at that time it is too late now. If they gave only an estimate up-front or you did not ask for one at all, then you might have cause for a claim.

Also if this was because of an insurance-covered water damage - if the agreement was they would get whatever the insurance company paid plus your deductible for instance (a common agreement for this type of work), then you have no beef because you are still paying the deductible either way - though the insurance company is paying more than it should. In that case and especially if final payment has not been made, a confidential aside to the insurance adjuster that they marked up the sub 200% might result in them not getting future work with that insurance company.

I would start off calling the owner (this is a franchise company) and saying someone obviously messed up on the calculator on the subcontractor markup because it came out to 200% - which is clearly in error. That will give them the opportunity, without losing face, to cut it back to something reasonable (or what the contract calls for) once they know they got caught.

You could also call the ServePro headquarters and talk to the regional manager for your area about what is normal and if this is a ripoff headquarters wants to know about - and if they are not eager to talk to the local franchisee about this you could drop a hint that doing so could help avoid nasty reviews for ServePro in general on AL and Yelp and such.

You could also call the mold testing company and ask the owner if he knows what ServePro is doing - yuou probably were not supposed to see his bill at all, but since you know what he charged he might be shocked and call them and ask about it on your behalf - realizing this could lead to a bad review for him as well if that is the accepted norm. [Plus if they are making 200% off his services he is probably going to think seriously about not working for them, or charging them a lot more so he gets more of the total $ they are billing for his services.]

Otherwise, especially if it does not talk about using subcontractors at all, argue it. 10-15% is the normal general contractor markup on subs, so if this went to small claims court (unless the markup is spelled out in the contract) I suspect a judge would rule that it is beyond the pale and disallow any markup at all.

I suspect if you argue it strongly, maybe if necessary mentioning that you are considering talking to the consumer fraud agency for your area (research who that is first - sometimes city/county in populous areas, sometimes part of state attorney general's office). If they balk on it you could also let drop that you asked on Angies List if anyone though this markup was legit or legal - that would put them on notice that a VERY bad review may be in the offing if they do not come around to something reasonable.

One last hold over them - they are likely licensed as a general contractor, but if they are only state licensed as a mold remediation contractor, not a general contractor, then it could be they are in violation of state law by subcontracting the work out. In many states generally requires a - wait for it - general contractors license - to do that. You could call the state licensing board for contractors to ask about that - most also have licensee lists online.

Here is a link to a blog on the web regarding ServePro work, BTW -

Answered 3 years ago by LCD

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