Should I hire an attorney? Any referrals?

Question

I have a SFH rental property in Riverside County CA. The house suffered substantial water damage due to vandalism by the tenant in Q4 2018. The house was insured by one of the largest insurers. When I filed my claim, they also provided a list of preferred vendors. I hired one of them, let's call it 'the Contractor.' Everyone I spoke with agrees that given the scope of this project, it should have been completed within one year. My insurance policy covered 12 months of lost rent.

However, the Contractor did not finish the project until March 2022, which is more than three years. They initially assigned a project manager who left the company after a few months. After that, the Contractor did not assign any project manager until Q4 2021. In between, I called and emailed my only contact, the general manager of the Contractor. He seemed to have disappeared from the face of the earth and wouldn't respond to me at all.

The overall process was as follows:

- The Contractor assessed what needed to be repaired.

- They filed their assessment with the insurer.

- The insurer sent me a check, initially with just my name, later with both my name and the Contractor's.

- I paid the Contractor.

At this point, I still have not sent a large check from the Insurer to the Contractor because I am asking the Contractor to compensate for the missing rent due to their substantial delay. The missing rent not covered by the insurer is over $100,000.

I have been in discussions with the Contractor; honestly, they come across as heartless. They only want to get the money and don't seem to care about my missing $100,000+.   And they seem to pull tricks to accomplish that.

Should I hire an attorney to sue them? Is there a way to file complaints or lawsuits against the Insurer? I assume the Contractor won't want to lose their future business with the Insurer.  For attorneys, some charge an hourly fee upfront.   How can I be sure they are any good?  Would it be better to use a contingency-based attorney?

Any advice is appreciated!

Nathan Gesner · Answer

I'm not sure what you would sue them for. Why did you allow them to take three years to cover a project? Contractors can build entire houses in 3 - 6 months. You and the insurance company have a responsibility to monitor the job and hold the contractor accountable. You allowed them to move slowly, they took advantage of the situation, and you lost.

Chris Seveney · Answer

@Alex Tsui

I agree with Nathan. Doing this after the fact with no notice during the work is way too late. You should have hired the attorney years ago.

Getting one now is probably only going to be a money pit.

David P. · Answer

Insurance contractors are biggest money hungry and only thing are they good for is quoting a high price and getting your insurance to pay out that dollar amount. I'm in california too and it sounds like maybe you have AAA. I got paid out 5 years ago 16k for some water damage that I knew could be fixed under 6k. I took the 16k check and hired my own contractors to do the work in under 6k and pocketed the remaining 10k.

Ned Carey · Answer

@Alex Tsui

How much is the check you are holding? If it is more than the 100k wait for them to sue you. Otherwise talk to an attorney with the specifics, too see if you have a case

Carlos Ptriawan · Answer

Right. Mine exactly the same. Cost to fix water damage including demo is only 4k-6k.Who on earth would be paying hundred k for mismanagement of simple mishap and takes three years and especially in this case the owner want to sue the contractor for loss rent ? What a super mess and it is LL inability to perform.

Dan H. · Answer

I had fire in oct 2019 that burned 2 units.  The first remediation person I hired I had to fire which put the start behind schedule.  A 4 week remediation took 3.5 months (including changing remediation contractors).  This initial delay was largely on me as I had doubts about the initial remediation contractor within one week, but I was reluctant to fire them and find a replacement.  Then Covid hit with one contractor on site at a time.  While COVID restrictions were in place, my GC had significant health issue.   With all of this going wrong, we still finished in one year (barely).

I understand having issues.  I understand COVID impacts.  However, you are the asset manager and must manage the people you hire.

Unless your contract specified penalties for taking too long, I suspect you are wasting your effort trying to collect for list rent.   Try if you want and I hope you the best, but I think your chance to succeed is real small.

Regardless, you need to recognize your role and responsibility as the asset manager.

Good luck

Carlos Ptriawan · Answer

You keep doing mistake by mistake.- Water damage is easy. It should be done in 29 days. It's quick and easy I do even have the remedy equipment.- Use your own contractor, don't follow insurance contractor- Use public adjuster- find your own contractor to get the job done.Nobody will pay you for 3 years of loss rent. Nobody.

Alex Tsui · Answer

Thanks for the response, Nathan and Chris.   I am thinking about suing them for missed rent payments.    I have email records of them not replying to me, and gaps of time where no project manager was assigned to my project (no project manager means no activities).

I agree that the attorney route is a money pit.   Any other alternatives - mediation?   I want to negotiate some serious discount.

Should I hire an attorney? Any referrals?

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