Problems with the remodeling contractor? You do not have to go to trial

About a year ago, the residents of a villa in Ramat Hasharon ordered an interior and exterior renovation for hundreds of thousands of shekels. Towards the end of the contractor’s work, defects were discovered. “We chose a contractor with recommendations and he is really a pleasant man who sometimes saw things differently, but it was important to us that everything be written accurately,” says Hagit (pseudonym), the client.

“We entered the house at the end of the renovation a year late. One night, the first winter, I heard a flow of water. I went up to the bathroom and discovered a flood of water that had reached the kitchen.” According to Hagit, even before the incident, they had to postpone the meeting several times to close an account, and on the day the leak was discovered, the contractor came and the couple asked him to fix it before the end of the account. “The contractor didn’t like it and suddenly disappeared,” she says.

The remodeling contractor sees it a little differently. “We finished most of the work and the customers avoided paying the final bill,” says Guy (pseudonym). “They pulled me in and each time they had a different story. When I arrived on a winter day they told me there was a leak and only after I fixed it would they talk to me about the payment.” He said, “I chased after them for a long time to sit on the final bill, and when I arrived I realized they were not interested in talking about the last numbers. I ignored them for a few days, then they turned to the Arbitration Contractors Association’s arbitration body that brought us to negotiations.”

The mediation lasted about two months. It was agreed that the money would reach a trust at the arbitration institution. The association notes that the list of complaints was disproportionate to the renovation and that the veteran contractor insisted on completing the renovation himself and requested that the money in trust only reach him at the end of the renovation. At the end of the mediation, the renovation was completed and the money was transferred to the contractor.

Many Israelis renovate their homes, and conflicts with contractors often arise due to improper renovation, payment problems, cessation of work in the middle, liquidity and more. Sometimes they manage to reach agreements, and in other cases they are forced to go to court. But not many are familiar with the arbitration institution of the Association of Renovation Contractors, which mediates between the parties and handles dozens of cases a year.

“The association was established to institutionalize the industry, raise its reputation and allow contractors to register with the Registrar of Contractors at the Ministry of Construction and Housing,” says Adv. Natalie Shimon Weinstein, CEO of the Association of Renovation Contractors, which heads the association’s arbitration institution. “The purpose of the association is twofold,” she explains, “both to allow contractors to work legally and to help the public enlist the help of licensed professional contractors.” Among other things, contractors can learn business management, writing a contract with a client and preparing quotes so that contractors will not encounter surprises.

The association, which has about 1,300 registered contractors, was founded in 2001 to regulate the industry and strengthen the status of the renovation contractor. For example, in the past, the renovation industry was not mentioned as a contractor classification in the framework of contractors’ registration regulations for structural engineering works, but in light of the association’s activities, the industry was expressed in law. In 2002, the association petitioned the High Court to add it to the contractors’ register in the Ministry of Construction and Housing and succeeded in establishing 131 sub-industries – renovations. This classification paved the way for contractors to work large sums of money, employ foreign workers and participate in tenders.

Shimon Weinstein, who has served for five years as the association’s legal counsel, serves as the official arbitrator and has been working to resolve various disputes between the renovation commissioners and contractors over the past year. She estimates that in the coming year another 5,000 contractors will join the Registrar of Contractors and the Association

“Renovation contractors often suffer from difficulties with contractors, such as unsatisfactory work, faults that are discovered and cost more money beyond what is written in the contract. Therefore, we encourage contractors to add an addition clause to every work agreement and instruct them to get written approval from the client to avoid problems. At the end of the account, “she says.

In one case in Yokneam, during a general renovation of an old apartment, the heirs of the deceased who owned the property wanted to prepare it for the shiva. According to Shimon Weinstein, towards the end of the renovation, failures and cracks were discovered in the common wall between the rooms. The contractor who identified the fault as a water source was unable to find a solution even after several days. “The parties started arguing frontally and in messages, and after a few days the contractor started evading customers,” she says. “The owners of the apartment (the heirs) applied to the association and together with one of the members of the management we conducted tests on the subject.”

The conclusion was that the renovation did not end as expected from the contractor. According to her, after receiving the conclusions, for over a week of mediation attempts between the parties, the contractor and the clients agreed to put the relative money from the overall renovation in trust in the arbitration institution. A mediation meeting was then scheduled at the renovation site, where it was decided that the contractor would return a sum of a few thousand, i.e. the relative portion of the renovation that was not completed. Upon completion of the mediation procedure, the parties signed a document of no future claims and the money was transferred to the client who finally completed the renovation with another contractor. Without the intervention, he would have lost the money and paid double for the renovation.

Another case is the renovation and roofing of a private house in a moshav in the north near Nahariya. “The clients and the contractor agreed on the work following a mutual acquaintance through the parties’ children, who are in the same class at the school in the moshav,” she says. “In this case, disagreements arose between the parties over the quality of the contractor’s work. Following the early acquaintance, there were emotions involved that led to an explosion and lawyer intervention on the part of the client and the contractor.

“The operating contractor contacted us just before arriving in court to resolve the dispute without state intervention,” Shimon Weinstein continues. “About a month after the appeal, during which we dealt with the parties’ lawyers, we brought them to initiate mediation proceedings. A week later, the parties were able to reach a frontal meeting at the client’s home, where it was agreed that the contractor would complete his work, waiving claims from both parties. “Customers add a clause to the contract according to which if next winter (after a year) problems are discovered again on the roof of the family home, the operating contractor will return the relative part of the treatment immediately.”