Shoddy Home Repairs

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What can I do about home repair work that is shoddy and/or incomplete?

Possible actions:

  • In some circumstances, cancellation of the contract and a refund of money paid (see below);

  • Obtaining from licensed tradesmen written statements evaluating the work's conformity to relevant building code(s);

  • Negotiation with the contractor for remedial work or compensation for damages;

  • Mediation or arbitration, hopefully at contractor's expense;

  • Small claims lawsuit for up to $1500 in damages;

  • District court lawsuit for damages between $1500 and $4000, or a circuit court lawsuit for specific performance or for damages exceeding $4000 legal representation needed).

Can I get out of a contract for repairs or improvements on my home?
If a home improvement loan is secured by a lien on the property, the homeowner had, or has, the right to cancel the transaction within three days from the the LATER of: the date on which the contract was signed OR the date on which the homeowner received the proper disclosures under the Truth In Lending Act, 15 U.S.C. 1635, 12 C.F.R. 226.15. If the lender provided inaccurate disclosures or used an improper form, the TILA right to rescind remains in effect for three years. [Hence it is almost always necessary to look at a consumer's contract papers before advising them whether they can rescind a home improvement contract.]

If the home improvement contract was negotiated and signed at the consumer's residence, the transaction is subject to a three-day rescission right, not only under TILA, but also under the Kentucky Home Solicitation Sales Act, KRS 367.420. (Under the Kentucky statute, the right of rescission can extend even beyond three years, if raised as a defense to foreclosure.)

With either a mortgage-financed or a home-solicitation loan, if home-improvement work began BEFORE THE EXPIRATION OF THE THREE-DAY RESCISSION PERIOD, the consumer's right to cancel was violated, and the contract may be canceled on that basis.

What if the loan has been transferred to a new lender or servicer?
All of the defenses to a home repair contract which could be asserted against the home repair contractor or the original lender can be raised against the holder of the loan note, per 12 C.F.R. 226.15 and 16 C.F.R. Part 433 (the FTC "holder" rule making the lender and its assignees liable for claims and defenses which could be asserted against the original seller or dealer.)



Reviewed August 2009