Author Christine Chitnis’ cabin renovation, originally planned to take a year, has dragged on for more than three years. The work is still not finished. Chris Burnett
Renovation projects can quickly drift away from original plans and budgets.
Business Insider writer Christine Chitnis learned: Homeowners should be prepared to act in a timely manner to avoid problems.
Choosing a trustworthy contractor is crucial. Homeowners should conduct thorough background checks.
As I stood in my newly renovated bathroom, watching water pour over the side of the shower and flood the room, I alternated between anger and exhaustion. Even with my untrained eyes, I could see that the edge of the shower was misaligned. This caused the water to flow to the floor instead of swirling toward the drain. If left unattended, the long-term water damage would be catastrophic.
The giant puddle at my feet felt like a watery manifestation of the shoddy craftsmanship, mounting expenses, and legal battles my husband and I had endured while renovating our 150-square-foot cabin. What was supposed to be a year-long, $140,000 renovation project turned into three agonizing years that cost us more than $500,000. And the work is still not finished.
Homeowners struggle with construction disasters and poor contractors
Our story is not unique. Homeowners across America are dealing with similar construction disasters. They are caused by unreliable and often dishonest contractors. According to the „Joint Center for Housing Studies“ According to Harvard University, spending on home renovations rose from $328 billion in 2019 to $481 billion (€408.85 billion) in 2023. As demand increased, there was a shortage of contractors, giving them unprecedented power.
If they leave projects half-finished or don’t do their jobs well, there’s still no shortage of opportunities – and new clients are lining up at their doors.
In the US state of Rhode Island, where my husband and I live, complaints to the Division of Economic Regulations increased 30 percent from 2019 to 2021, mostly because of contractors who accepted payments but did not complete the agreed work.
If you don’t have a plan in place, there are few legal protections for homeowners.
As my husband and I soon discovered, unless you have a plan in place, there are few legal protections for homeowners.
We purchased a property in Northern Michigan and wanted to renovate it quickly
When our family purchased our 130-year-old property in Northern Michigan in September 2020, we thought we would move in a year later, around June 2021. We hoped to use the little cabin as a summer retreat and rent it out for the rest of the year.
We planned to improve the plumbing, electrical, basic and window installations and modernize the bathrooms and kitchen. A project that several contractors told us should take a year, give or take. Things started well. But by fall 2021, it became clear that our contractor had no intention of sticking to the agreed schedule. Our descent into renovation hell had begun.
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Our contractor misled us and ignored our project
Initial delays were attributed to supply chain bottlenecks. And while these certainly affected the schedule, we later realized that our contractor had misled us about when he had ordered materials. He ignored our project for months.
The delays were the first of many warning signs. But we felt powerless to change course, with a house now stripped to the rafters and few alternative options in the small Michigan town where the cabin was located.
The budget tripled
The years passed, the budget tripled, we drained all our savings to make payments. The planned schedule became a long way off. We felt like the proverbial frogs in a pot of boiling water. Every time our contractor raised the temperature, we grimly adjusted to the reality of our demise.
Finally, we requested to move in in spring 2023. But shortly before that, our contractor suddenly demanded full payment for all work completed up to that point.
He threatened to withhold the operating certificate issued by the local government to the building permit holder. It states that the building complies with regulations and all works included in the building permit scope have been completed. Unless we complied with his demands.
We knew the cardinal law of home renovation: Never pay in full until the work is done and inspected.
Knowing the cardinal law of home renovation—never pay in full until the work is done and inspected—we became suspicious.
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Everything was botched: paintwork, doors, windows, seals, pipes
My husband and a contractor friend flew in immediately to assess the situation. They were horrified by what they found: a botched paint job, incorrectly installed doors, leaky windows, sloppily installed weather stripping and pipes protruding from the front yard.
That’s not all – a long list of snags included installing storm doors and exterior landings, repairing damaged siding and covering exposed pipes. Worst of all was the shower, which turned our bathroom into a miniature swimming pool.
So we paid for a service that wasn’t completed. We refused to pay. After requesting full documentation and accounting of all work, we noticed significant budget differences.
For example, gaps between what a subcontractor had charged (e.g. $11,000 for the shell) and what our contractor said he paid them ($18,000).
We ended the working relationship
So we sought legal action, ended the relationship and ignored the outstanding balance. Surely, we thought, there must be consumer protection for people in our situation. It seemed like a safe bet: we were paying for a service that wasn’t completed. A year later, we learned how few protective measures existed.
The court dismissed the notarized lien waiver as a mere mistake by the contractor. (A lien waiver, often referred to as a lien waiver, is a legal document typically used in the field of construction. It is exchanged between a contractor and a subcontractor or supplier.)
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We received irrelevant solutions to a terrible problem from the court
The mediator offered inconsequential solutions to the problems: “Take a crowbar, rip out the tiles and re-level the bathroom, no big deal. This is a weekend project,” he said, as if we hadn’t just paid tens of thousands of dollars to have our contractor do just that.
The lack of compassion from the court – and the fact that it would cost us twice what the contractor was charging to take further legal action – forced us to back down.
We paid the contractor the $32,000 (€27,200) he said he owed, leaving us with an exorbitant bill and no closing. Even though we were eventually able to move in, we remain trapped in a cycle of endless repairs, collecting bids to clean up the mess our contractor left behind.
You need a good contract and rules
We’ve learned the hard way that your protection as a consumer depends largely on what you do before the work even begins. After talking to other homeowners, I discovered how easy it was to be taken advantage of.
Ultimately, a homeowner’s best protection is a good contract – something we’ve been lacking. Our contract, a simple one-page document written by our contractor, provided minimal safeguards and left us with little legal recourse.
If we were to do it again, we would include rules for how changes to the project should be handled, penalties for missed deadlines, and clear costs for each work, including labor and materials. (We discovered that our contractor had outsourced much of the work we had paid him to do, effectively billing us twice for the contractor fee).
Your rights to termination
We were recommended to start with standardized contracts from organizations and adapt them to our needs. There is also the “right to terminate for convenience,” which allows a homeowner to fire their contractor at any time without cause.
In the US, the “right to terminate for convenience” is a clause that allows employers to fire employees for no specific reason, as long as there are no discriminatory or contractual reasons. This is often referred to as “at-will employment”.
In Germany, there is the principle of “protection against dismissal” in labor law, which is anchored in the Civil Code (BGB) and the Dismissal Protection Act (KSchG). According to this principle, an employer cannot dismiss an employee without just cause. There must be certain reasons for termination, such as operational reasons, personal reasons or behavioral reasons. In many cases, the employer must also ask the labor court for approval in order to effectively enforce a termination.
German labor law aims to protect employees from arbitrary dismissals and to ensure that dismissals only take place under certain conditions and while respecting the employee’s rights. Therefore, there is no direct equivalent to the “right to terminate for convenience” in Germany.
Federal Ministry of Labor and Social Affairs (BMAS)
We’ve learned: The world of home renovations is a minefield. Every state and country has different regulations, legal options are limited, and competition for contractors is fierce. The best defense is vigilance. Researches, verifies and demands accountability. Everyone is on their own.
This article was translated from English by Samira Frauwallner and supplemented with equivalent information that applies in Germany. You can read the original article here read.