Is a Home or Building Contractor Bound by a Written Estimate of a Job?

As a general rule, a contractor is not bound by an estimate, written or otherwise. Unless it states it is a binding contract, it is not enforceable.

What an Estimate Covers

For example, in a kitchen remodeling, does the estimate cover the cost of such expensive items as new appliances, cabinets, and countertops? Some estimates include only the contractor’s labor. Others include both labor and materials; and some may cover the cost of the total project, including the subcontractor’s labor and all materials. If the contractor offers to get the materials, ask if there is an additional charge for the time spent in obtaining them. Also ask if you will be charged the retail price or the discounted “wholesale” or “contractor” price on supplies. It is also a good idea to check references and ask former customers if the estimates the contractor gave before the job matched with the final bill.

Additional Costs

Home improvement projects often encounter unanticipated circumstances such as dry rot, which can significantly add to the cost. However, client changes are often the culprit for cost overruns. If the contractor suggests a change, always ask the cost implications.

If you don’t think there is a good explanation for the difference between your estimate and the final bill, you may seek recourse through a local contractor’s guild or the Better Business Bureau. If that doesn’t work or you suspect fraud, contact an attorney. Merely not paying the bill can cause future problems if the contractor files a “mechanic’s lien”, a legal claim attached to your property. This can make resale difficult.

Case Studies: Contractor Estimates and Insurance Considerations

Case Study 1: Incomplete Estimate Coverage

A homeowner receives a written estimate from a building contractor for a kitchen remodeling project. However, upon closer examination, it becomes apparent that the estimate only includes the contractor’s labor and does not cover the cost of materials or other expenses. The homeowner, unaware of the limitations of the estimate, proceeds with the project and later realizes that the final bill far exceeds the initial estimate due to the additional costs of materials and subcontractor labor.

This case study highlights the importance of thoroughly reviewing and understanding the scope and coverage of an estimate to avoid unexpected expenses and financial implications.

Case Study 2: Unanticipated Circumstances and Cost Overruns

During a home improvement project, a contractor encounters unforeseen issues such as dry rot that require additional repairs and expenses. Despite providing an initial estimate, the contractor must inform the homeowner of the unexpected costs to complete the project. The homeowner, unprepared for these additional expenses, faces a significant cost overrun.

This case study emphasizes the need for homeowners to anticipate the possibility of unanticipated circumstances during construction projects and to have contingency plans or appropriate insurance coverage to mitigate the financial impact.

Case Study 3: Discrepancies between Estimate and Final Bill

A homeowner receives an estimate from a contractor for a home renovation project. However, upon completion of the project, the final bill significantly exceeds the estimate. The homeowner, dissatisfied with the discrepancies and suspecting potential fraud, seeks recourse through local contractor guilds or the Better Business Bureau.

This case study highlights the importance of addressing discrepancies between estimates and final bills promptly and seeking legal assistance if necessary to protect one’s rights and avoid potential legal consequences.