Calculation of Damages in a Bad Residential Remodel Job

A homeowner often enters into a written contract with a licensed contractor for the remodel of his home or rental. The terms of the construction contract signed by the contractor and the homeowner control the obligations each owes to the other in the absence of conflicting state law.

Unfortunately, the remodel does not always turn out as the property owner or the contractor expected. The work may not comply with acceptable standards within the custom and practice of the construction industry of your state, and may be defective for many reasons, such as not meeting the safety standards adopted by the Uniform Building Code (UBC) or other industry standards.

Liability and Damages

When problems occur in your home remodel, residential rental, or commercial building, the homeowner generally retains an attorney who then hires a third party expert to establish an opinion as to the scope of the problem, whether the person who did the remodel met the standard of care under industry standards, and the estimated costs to rectify the problem. Usually the expert hired is a contractor licensed in the state where the remodel work is located. Sometimes a structural engineer is also retained if the remodel requires structural calculations and changes to the structure.

Typically the licensed contractor expert will inspect the remodel and present an opinion if the person who did the remodel work did not meet the industry's standard of care.  If so, this expert will also provide the estimated costs of repair, which would essentially be the homeowner’s damages. In most states, the measure of damages to a property owner for a deficient remodel job not complying with established industry practices and perhaps also not code compliant is set by law. 

From a practical perspective, the typical damages a homeowner could assert in a failed remodel would be the costs to remove the defective construction initially thought as improvements. This means tearing out and disposing of debris to rectify the improper work of improvement, permits and fees to start up again, and any additional costs that would not have otherwise been incurred such as structural engineer fees, architectural drawings, and blue prints. Most importantly, additional damages would be the reinstallation of replacement construction in place of the removed defective remodel.

The amount of actual damages is not fixed in law. The replacement costs for the new installation would be based upon estimates of the expert contractor as to the scope of work necessary to rectify the bad remodel and its associated costs.

If the written contract between the property owner and the person doing the remodel has an attorney’s fee clause, the property owner’s attorney’s fees and certain litigation costs such as filing fees and deposition costs are additional items the owner should seek in a defective remodel situation.