In our “To Bid or Not to Bid” course, we discuss common issues and red flags with homeowners. It’s wise to not only be aware of these but have solutions ready in your back pocket. In the past 72 hours, two contractors have mentioned situations in which they (thought they) walked away from a final payment or balance due from a homeowner thinking that it was a mutual walkaway to resolve any outstanding issues on a project, only to discover later that it was not. A homeowner can still make a claim to the Licensing Board or file a lawsuit against you. How can that be the case? Answer: The parties did not sign a release memorializing the walkaway, and remember that when verbal, it’s as if it never happened.
If you agree to a walkway, it’s not over until it’s really over, and that is in the form of a signed release. It does not have to be fancy or contain any magic language, but rather in plain terms state the agreement and obtain the homeowner’s initials. It can be one sentence. If you’re speaking with a homeowner on their front lawn, whip out a McDonald’s napkin from your truck, write that everyone agrees to walk away from the certain $ figure and scope of work and release each other in full from the project at the specified address. The key is to get at least one homeowner’s initials in that moment. If you have a husband-and-wife duo as customers, one signature is better than none and can still help protect you down the line if needed. Take advantage of the momentum of such a conversation or proposal by a homeowner and jot down a quick writing. Take a picture of it right then for your records, and you can even offer to give the physical version (or napkin) to the homeowner because you have the image. Email it to yourself and save it in your project file. If the homeowner files a claim against you 8 or 15 months later, which happens on occasion, then you have the image that can potentially be used in a Motion to Dismiss. Without such a release, however informal, I would caution against considering it closed, but rather merely lingering.
If you have questions or would like to discuss this further, feel free to email Info@AllForContractors.com. Now you know. Pass it on. All For Contractors is All For You!