Legal considerations before hiring an unlicensed or inexperienced contractor to work on your NYC Condo or Co-op
By: Reza Yassi, Esq.
It is critical that Manhattan Co-op and Condo owners ensure their contractors are licensed before soliciting home improvement services. New York City’s Home Improvement Laws require strict compliance with rules and guidelines on Home Improvement Contracts (“HIC”). These requirements ensure that homeowners are well protected in a dispute between the two parties.
If you solicit services to repair, remodel or build on your Co-op or Condo, then by default, you are dealing with a contractor. New York City requires all home improvement contractors to be licensed by the Department of Consumer Affairs. This licensing requires contractors to undergo an extensive criminal history check, pass a written examination, and pay a licensing fee contributing to the DCA trust fund. This licensing process allows the Department of Consumer Affairs to act on your behalf if the home improvement contractor violates your rights. The Department of Consumer Affairs has also developed a trust fund to which all licensed contractors contribute, which is used to reimburse homeowners when projects are abandoned or improperly completed.
In addition to a strict licensing process, contractors must comply with various provisions in New York City’s Administrative Code and General Business Code, which are designed to protect against abuses and fraudulent practices. These statutes often provide statutory relief such as awarding treble damages (3 times your actual damages), attorney fees, fines, and even criminal consequences for extreme malfeasance.
Unlike single-family homes, Condos and Co-ops have various internal requirements for renovations. Each Condo or Co-op has its own rules that buyers must consent to before purchasing. Problems often arise when the homeowner solicits a contractor that is unlicensed or unfamiliar with the complexities of compliance with Condo/Co-op and Department of Building rules.
These rules vary but often require the Home Improvement Contractor to obtain adequate insurance and excess coverage, utilize a licensed architect, have the appropriate DOB permits (If your contractor does not have required DOB permits before work begins, YOU pay the fines), and comply with various other rules and regulations. These rules are well known to Home Improvement Contractors who have experience working on Condos and Co-ops projects but can be very problematic for contractors who lack experience working with NYC Co-ops and Condos. These issues usually have nothing to do with the contractor's competence or craftsmanship and more to do with the regulatory framework on the city and city Co-op and Condos.
A rising trend that is the subject of much litigation (especially since COVID) is inexperienced contractors abandoning projects. These contractors often come from out of state and do not grasp the compliance aspect of NYC renovation projects. They underbid the more seasoned (and compliant contractors) without realizing the complexity of the compliance aspect of the project. The contractor's compliance inexperience often increases costs post-contract or, worse, leads to the abandonment of the project altogether. This can cause severe problems for Condo and Co-op owners who are often displaced during the renovation project and must find and burden the replacement costs associated with bringing in a new contractor. This is why it is critical to vet your contractor before entering a Home Improvement Contract, especially if you are a Co-op or Condo owner in NYC.
If you have found yourself in this situation, it is not too late to get your money back. Here at the Yassi Law P.C., we exhaust all avenues to recoup your funds. We take a two-step approach to recovering your funds: (1) filing a lawsuit to enforce your contractual rights; and (2) working with the Department of Consumer Affairs to obtain maximum reimbursement from the HIC trust fund.
Disclaimer: Although I am a lawyer by profession, I am not YOUR lawyer. This article is for informational and educational purposes only, does not constitute legal advice, and does not establish any kind of attorney-client relationship with me. I am not liable or responsible for any damages resulting from or related to your use of this information.