There are many different home addition legal issues that may arise. Home improvement contracts are binding agreements between a homeowner and contractor to add an addition or make some type of improvement to the property. Home addition legal issues may arise before, during, or after the improvements.

What is a Contract?

A contract is a legal document that is binding on the parties that sign it. It creates mutual obligations the parties must fulfill. In order to be legally binding, in most cases, a contract must be in writing and signed by the parties to the contract. There are three general requirements for a contract to be enforceable:

  • Agreement to the terms of the contract, known as mutual assent;
  • A valid offer and an acceptance; and
  • Consideration.

It is important to note that, pursuant to the Statute of Frauds, certain contracts must be in writing. This is to attempt to prevent fraudulent acts. The types of contracts that are required to be in writing by the Statute of Frauds include:

  • A marriage contract;
  • A contract that will not be performed within one year;
  • A contract involving an individual’s promise to pay the debt of another;
  • A contract wherein an estate executor agrees to personally pay debts of the estate;
  • Any contract involving the sale or transfer of land; and
  • A contract for the sale of goods valued over $500.00.

Contracts are the foundation of most business transactions. They are used in everything from real estate to construction, as well as many other types of business transactions. A contract provides sections that outline whether or not the contract may be cancelled and how to go about doing so. The contract will also provide consequences for a breach of the terms of the contract.

What is Considered a Breach of a Contract?

A breach of contract occurs when either party to the contract fails to fulfill their legal obligations under the contract. If one party fails to fulfill their obligations, the other party will suffer economic losses.

For example, if an individual hired a construction company to complete a project by a certain deadline and the company failed to do so, the individual would suffer financial losses because the company failed to perform.

There are different types of legal remedies that may be available to compensate the non-breaching party for their losses. An individual may sue for damages, demand specific performance, or terminate the contract. A court will decide the proper remedy and the amount of compensation.

What Happens if the Contractor Fails to Finish the Home Addition?

If a contractor fails to complete a home addition, they have breached the contract for that addition. The breach occurred because the contractor was legally obligated to build the addition and failed to do so. The homeowner, as the non-breaching party, can sue the contractor for the breach.

What is a Zoning Violation in Relation to Adding onto My Home?

Zoning violations occur when a homeowner builds an addition to their home that violates the applicable zoning requirements for the area. For example, if an individual builds a third floor onto their home which exceeds the building height limitations in place under the local zoning requirements, they have caused a zoning violation.

What is Zoning?

Zoning is a system that is used to classify property that is privately owned. Cities, counties, and states all use zoning to classify properties according to their land use.

Most jurisdictions have statutes, or laws, that regulate zoning. A city has ordinances, which are similar to laws, but are less powerful. For example, a state law would trump a city ordinance in a dispute.

The two main types for property for zoning purposes are residential and commercial. Another type is industrial, which includes properties with factories or other buildings that require special considerations. Additional categories include recreational and agricultural.

These broad zoning categories also include subcategories. For example, the residential zoning category includes different types of subcategories such as single-family homes and multiple-family dwellings.

What is Contractor Fraud?

Contractor fraud occurs when a firm or an individual contractor offers home improvement services but cheats the homeowner in some manner. For example, when a written contract between a contractor and the homeowner fails to include a term the parties orally agreed upon.

Another example occurs when a contractor informs the homeowner of an unforeseen or nonexistent problem that requires extra labor and extra money beyond that to which the homeowner already agreed to pay.

What if the Contractor Did Terrible Work on My Home Addition?

In some cases, the contractor’s work may not be adequate. Defective construction is construction work that falls below the construction industry standard. It may be considered defective as well if the work does not meet the agreed-upon terms of the contract.

For example, if a contractor uses substandard materials, does not clear debris, or builds an addition incorrectly, it may be considered defective construction.

What Remedies are Available for a Breach of Contract?

The five types of remedies that may be available for a breach of contract are:

  • Money damages;
  • Restitution;
  • Rescission;
  • Reformation; and
  • Specific Performance.

Money damages are monetary payments that a breaching party is required to make. The type of breach will determine the extent of the damages. Types of money damages include compensatory damages and punitive damages.

Compensatory damages are meant to cover the loss incurred by the non-breaching party as a result of the breach of the contract. The breaching party will be required to pay an amount that compensates the other party for their loss.

Punitive damages are not typically awarded in a breach of contract case. Unlike compensatory damages which are meant to cover the loss of the non-breaching party, punitive damages are intended to punish the breaching party for egregious behavior and to deter future similar acts. This type of damages is awarded in addition to compensatory damages. Punitive damages must be requested and awarding them is at the discretion of the court.

Restitution is a remedy that is intended to restore the non-breaching party to the position they were in prior to the contract. The defendant will be required to return any monies or property received from the plaintiff under the contract. Restitution is not meant to compensate the plaintiff for their loss. Restitution is often used in cases where a contract is voided by the court because the defendant lacked the competence or capacity necessary to enter into a contract.

Rescission occurs when the duties of both parties are terminated by the court. This remedy is used in cases where parties enter into a contract based on mistake, fraud, undue influence or duress and the only valid remedy is to terminate the contract.

Reformation is another remedy that may be used when a court reforms or changes a contract to correct any inequities. Reformation allows the terms of the contract to be rewritten instead of setting aside the entire contract.

Specific performance is a remedy that requires the breaching party to perform their duties as specified by the contract. This remedy is used when money damages are not adequate to compensate the plaintiff. For example, it may be used in cases which involve giving a piece of land or a valuable item to the plaintiff.

Should I Talk to an Attorney about My Home Addition Legal Issues?

Yes, it is essential to have the help of an experienced real estate attorney for any home addition legal issues. A home addition can be very beneficial to a homeowner and add value to a home, but only if it is completed properly.

You can discuss home additions before, during, and even after hiring a contractor to add an addition to your home or property. Your attorney can advise you of your legal rights in relation to the addition as well as how to move forward in resolving any disputes that arise. An attorney can also represent you during any court proceedings, if necessary.