Owner/builder pulls building permit and signs permit as Owner/builder, then hires contractor for $ 250K project. Project started 01-06-1996, completed around 11/30/96. Owner/Builder screened all sub contractors before hiring. Owner then instructs contractor who to hire. Some sub-contractor payments are paid by the contractor and some are paid by the owner. On January 03 2006 the Owner/builder files suit against the contractor for defects, the amount is more than double the amount he received. A lawyer has been hired. Lawyer has spent thousands of dollars (from the contractor), now asking for more, with no hope in site. Trial date set for January 2007. Note: Owner has won mutiple lawsuits with insurance companies, general liability for contractors and homeowners for work completed on her permanent residence. We are at a loss, is there any hope for the small business owner against the property owner who uses insurance claims to finance their next project.

I thought the statute of limitations was 7 years. I work for two general contractors, one of them settles most claims without getting the lawyers involved. Though he usually only deals with EIFS issues. As a general contractor, the best way to protect yourself is with a signed contract. One between you and the owner. One between you and each of the subcontractors. Every subcontractor should also be giving you a Certificate of Insurance listing you as an additional insured. This helps protect you and leaves them liable for poor quality of work.

As a general contractor, you should not be paying any legal fees – everything should be dealt with through the insurance company. That’s what general liabilty insurance is for. In every case that either of the contractors I work for have been involved in, they have only had a minimum out of pocket expense – $250 for the stucco cases. The insurance company has covered the rest and hired the attorney.

Any time we get a complaint, (this is regarding stucco and one leaking roof) we get a list of ALL insurance companies that the subcontractor has used for the last 7 years and we send out a letter with copies of the inspection report, building permits, repair estimates, original paid invoice, signed contracts, certificates of liability insurance and any notices received from the owner. We send this to every insurance company the subcontractor has had including the current and we send it to all of our insurance companies – past and present. Every case was resolved through insurance companies with no attornies involved at all and the general was charged a $250 fee by the insurance company – probably a minimum payment agreement when he signed up for insurance.

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