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What legal rights to I have against a contractor that has taken 2 deposits but has failed to finish the job

Asked over 3 years ago - Westbury, NY

a contractor has taken a second deposit to finish a job. Since taken the 2nd deposit he has run into financial difficulty and now is unwilling to complete the job. Since he is incorporated, if I sue him do I have any recourse or can he just declare bankruptcy and walk away with my money?

Additional information
my contractor was given additional money, after completing a portion of a renovation. The money was the second installment to continue the job. It was to be used to pay the electrician, plumber to do their portion of the job and for him to continue the overall renovation. I needed to apply for a new permit and as a contidion to get the permit, the Town of Hempstead needed the contractors proof of insurance. The contractor said he did not have enough money to obtain the proper insurance even though he has about $25,000 of my money for work to be done yet. Several other people have tried to show him how to go about getting the proper coverage at little to no cost and he states he's unsuccessful and now is not even returning my calls. This has been going on for about 3-4 months now. Where do I stand getting my money back or forcing him to finish the job? can someone please help?

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Attorney answers (4)

Kevin W. Davidson

Reputation Level 13

Answered over 3 years ago. Estate Planning Attorney in Kaukauna, WI.

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While I cannot provide a definitve answer for immediate help - I can tell you, as a former subcontractor in the trades - you need to see an attorney in your area with experience in contract/construction issues before your guy goes south and disappears.

You've already got all of the signs of a failing business - and 3 to 4 months is too long to float him your $25k loan.

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Craig Dennison Robins

Reputation Level 13

Answered about 3 years ago. Chapter 7 Bankruptcy Attorney in Woodbury, NY.

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Contractors in Nassau County are governed by the Nassau County Department of Consumer Affairs. I urge you to immediately contact and file a complaint. They may also give you some additional information as to what your rights are. You may also want to consider retaining an attorney to bring suit (Consider calling the Nassau County Bar Association for a referral), or you can bring a small claims action yourself in Nassau County District Court. Good luck!

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Vincent Thomas Pallaci

Reputation Level 11

Answered about 3 years ago. Contracts / Agreements Lawyer in Huntington Station, NY.

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This is unfortunately a growing problem on Long Island. While a detailed review of the specific facts of in your situation would be needed for a complete and thorough answer, the short answer is that even if he is incorporated, he is not completely protected under NY law. Since you indicated that you have paid him but not received services, it is possible that he could be in violation of NY's statutory "trust" created under the Lien Law. If he is found to have violated the trust, he is personally liable regardless of the corporate form. Your best bet here is to contact a construction attorney right away.

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Theodore W. Robinson

Reputation Level 20

Answered almost 3 years ago. Contracts / Agreements Lawyer in Hempstead, NY.

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I agree with the answer given by the last attorney who said that in Nassau County the Consumer Affairs Bureau is the way to go. You can find them on Google or in the phone book. If you register a complaint with them, they'll call the contractor in and usually give him a direction to complete the job or they'll take action. It also may turn into a criminal complaint if he's taken two deposits from you and not finished the work.

As for your concern about him being incorporated and going Bankrupt, he may also be personally liable under the criminal law if he's used up your deposit without finishing the job. I strongly suggest you get yourself a lawyer and proceed immediately, regardless of the potential for Bankruptcy.

The Law Team

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