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Did you hire a contractor that didn't show up or poorly did the work? Before escalating the matter to a small claims court consider sending a demand letter requesting a refund from the contractor. A demand letter is a letter that outlines a request or set of demands to another person or business, in this case, a contractor. A demand letter acts as notice to the contractor of your intent to sue in small claims court if the dispute is not resolved. In this article, we will discuss what to include in your demand letter, what to avoid, and provide a sample demand letter.
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Common Reasons to Send a Demand Letter to a Contractor for a Refund
Below are some common reasons we have seen for writing a contractor demand letter for a refund:
The contractor never shows up to do the work.
The contractor never finished the project they were hired to do.
The contractor improperly works on your home and you need someone else to come to repair the work the contractor did. For example, you hired a contractor to work on your back deck and they need to properly install the deck and it is unusable.
You are unsatisfied with the contractor’s performance or workmanship. For example, you specified you wanted a rare type of marble to be used in your kitchen renovations and the contractor uses another material instead.
Why is a Demand Letter to a Contractor for a Refund Important?
A well-crafted letter requesting a refund from a contractor can be a useful tool if the contractor you hired improperly worked on your home. In general, sending a demand letter gives the contractor notice that you are unhappy with their services and accordingly you want a refund.
Here are some other good reasons to first send a demand letter to a contractor requesting a refund before taking legal action:
Depending on the state you are filing a lawsuit in, you may be required to demand payment from the business before filing. For example, in California, small claims courts demanding payment is a requirement. Some small claims courts want to see that you reached out to the contractor before initiating a lawsuit. By sending a demand letter you are easily completing this requirement.
A demand letter signals to the contractor that you are serious about getting your money back and that you are willing to take action.
Sending a written demand letter requesting a refund from a contractor assures you there is a record of your attempt to seek payment. So while requests for refunds can be made orally, we recommend making any offers in writing. There is also no restriction on text messages, but writing a letter can sometimes be very effective as it is a more formal way of making a demand to the contractor.
The most important reason to send a demand letter is that it may lead to you getting your money back quickly and without incurring court costs!
Do I Need to Hire an Attorney to Write a Demand Letter to a Contractor for a Refund?
You can use an attorney to send a demand letter, but you don’t need to. The decision to hire an attorney is up to you. There are many situations when writing and sending a demand letter yourself makes sense. Further, you should always consider the cost versus benefits of hiring an attorney.
Here are some considerations when deciding whether to hire a lawyer to help you write a demand letter:
Legal fees can add up quickly. Even if you just need a lawyer to help you write a demand letter to the contractor this could end up costing you more in the long run.
If you have a complicated legal case you may need help understanding the law. For example, if your contractor improperly worked on your front steps and a house guest trips, falls, and injures themselves on the steps your case now potentially involves a refund, negligence, and personal injury. Some of these legal topics are more nuanced than others and may require a lawyer with expertise in such matters.
What to Avoid in Your Demand Letter to a Contractor for a Refund
There are no set rules for demand letter writing, however, these are general tips for what to avoid when writing a demand letter.
Do not use disparaging language. In general, try not to use language that will convey to the contractor you are angry or hostile.
Avoid making threats. This letter could end up in court if you and the contractor do not come to a settlement. Any threats or made-up facts can be used against you later.
Do not fabricate facts. As mentioned above, if you end up going to court over the dispute the judge will read your letter at the hearing. Any facts you claim in the demand letter may be brought up in court and will require further explanation. Avoid looking petty or shady in your letter and in court by being as professional as possible throughout the whole process.
Remember the goal of a demand letter is to be able to come to a settlement outside of court. You want your demands to be met, however, you do not want to further escalate the situation.
What to Include in Your Demand Letter to a Contractor for a Refund
Unsure of what to include in your letter? Below we have included suggestions on the most important things to include in your refund request letter.
Here are a few suggestions of what to include in your demand letter to the contractor for a refund:
Include terms from your agreement or contract with the contractor. For example, if you hired a contractor to work on your beach house and work was to commence in September but did not start until mid-November include the proper contract provisions that state this.
Explain why you are seeking a refund. For example, did the contractor never provide the contracted services, or were you unsatisfied with the contractor’s services and why?
Describe any damages in detail. If you are seeking a refund because the contractor improperly worked on your property and damaged it, make sure to be as descriptive as possible (and include pictures).
Include your contact information so that the contractor can reach you in case they would like to accept your refund request. Our clients often chose to communicate via email or other forms of writing. Make sure to include an email address along with any other form of communication you are comfortable with.
Include where you would like to receive payment. Consider using Venmo or Paypal if you know the contractor well. If not include your mailing address so they can mail a check to you.
Attach other documents that may be necessary and could be used as evidence later in case of legal action. For example, an invoice from the contractor for services rendered, pictures of the work they did on your home, and estimates from other contractors for repairs you now need to perform due to the contractor’s poor services.
Include a deadline to respond to you. You may want to consider giving the contractor 14 days to respond to you and state that if they do not respond within that time, you intend to sue them.
Once you have sent a refund request letter, keep it in your records. In the event, you do end up filing a small claims lawsuit you can bring it to the hearing and show it to the judge. This is especially handy if the contractor states they didn't receive the letter.
Sample Demand Letter to a Contractor for a Refund
Below is a sample demand letter requesting a refund from a contractor. This sample demand letter involves a homeowner requesting a refund on a down payment for services not rendered by a contractor. When using this sample make sure to replace those facts with relevant information about your situation.
How to Send a Demand Letter to a Contractor for a Refund
We recommend sending your demand letter via email or mail. For letters that you mail, consider the following:
Tracking. Make sure to track your demand letter. With tracking, you will know if the letter reached the business or not.
Signature Required. You are not required to add a signature request when sending a demand letter for a refund. When you send a letter with a signature request, the postal carrier must hand-deliver the letter and someone must sign the letter.
Next Steps After Sending a Demand Letter to a Contractor for a Refund
If you sent a contractor a demand letter requesting a refund and do not receive a response, it may be time to consider suing them in small claims court. Small claims courts handle a variety of cases at a low cost. This is because small claims courts were intended to be affordable and user-friendly. In some small claims courts, attorneys are not even allowed to represent you!
Common types of small claims lawsuits you can file against contractors:
The contractor you hired breached the contract. For example, the contractor agreed to start renovations on your home in August but he never shows up.
The contractor you hired improperly worked on your home and damaged your property. For example, you hired a contractor to install a new front door and as he was installing the door he damaged your hardwood floors.
The contractor you hired showed “poor workmanship". For example, you hired a contractor to install new flooring in your home. However, when the job is complete you realize your new floor is completely uneven.
Learn how to file a lawsuit against a contractor in NYC small claims and California small claims.
Legal Educator @ People Clerk. Claudia holds a J.D. degree and is a certified mediator in New York and Florida. She has participated in dozens of small claims mediations in New York City courts.