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Question DetailsAsked on 8/28/2017

Deposits taken by a contractor goes toward the job to be done ?

We gave a 10000 dollar deposit in April the job did not begin until June. I thought that the deposit went towards the job or at least the labor due to the fact I am payng for all materials as the job goes on. Our contract was for the deposit and 1500.00 a week for a max of 20000 which would be labor. I am being told by contractor and his wife that the 10000 was because they blocked the time off for us and it basically went in their pocket and none of it went towards the job.. They want me to keep paying 1500.00 a week.They have gotten well over the 20000 which includes what I assumed included the 10000. I need some advice on is that a fraudulent move on their part ? We do have a contract and if they abandon and another contractor comes in that they will be assessed for the rest of the job.

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1 Answer


Can't give you a simple answer on this - but even if the contract stated that $10,000 was only a reservation fee (which would be totally outrageous and a shyster's move), since you obviously did not understand that fact, at a minimum the contract would be challengable on the basis there was no meeting of the minds - his understanding and your were different as to what that payment was for, so that is grounds for challenging that provision of the contract at least. I find it hard (OK, given a lot of the judges these days I guess I can't say that) to believe that an honest judge would let that sort of contract provision stand, on the grounds of it being inequitable - he is getting a lot of nothing.

Generally in the trade a reservation deposit (generally under $1000 except maybe for a new home build) applies to the job amount due - he only gets it for "nothing" if the terms say so AND the customer cancels the job without valid (under the contract terms) cause.

However, assuming the contract does not say that it was just a reservation charge to hold the schedule slot in black and white, then you are right - the deposit is an advance payment of a portion of the job costs and to be applied to the accumulated invoices, and what they are doing would be fraud - quite possibly criminal but at least civil.

I belive you are likely in trouble in other ways too though, with a weekly labor payment without proof of the amount of work done - this sounds like the contract arrangement from hell - maybe part of the reason for your user name ? Also, the fact you have paid more than $20,000 but evidently the job is not done is a problem, and possibly the materials side too - because unless you are paying for and directly taking delivery of materials, I would not be in the least surprised if the contractor is picking up materials (on your dime) and using them on other jobs, or later returning some for cash credit or credit to his account, not yours. And this ignores the historic issue of the too-large deposit for a labor-only job.

I would immediately find a good attorney with strong construction contract law background AND experience in consumer fraud and have him/her guide you through this issue, and possible criminal charges against the contractor for fraud and possibly for (if this is the case as I suspect) elder or disabled person fraud.

On the cutting him off (with attorney control on that to retain your rights) and getting another contractor in, that is what Bonding is for - to have a second contractor complete work undone or improperly done by a first contractor. And in the event of fraud, hjis busimness liability insurance might well come into play as well.

Certainly I would say this sounds liek a case for a formal complaint to the state licensing board too (assuming they are licensed), and after all is said and done (with your attorney's apporoval on phrasing) an appropriate but honest Review on Angies List.

Answered 3 years ago by LCD

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