Legal Question in Construction Law in California

Building permit denied, who's fault?

I signed a contract for a sunroom room addition to be

constructed utilizing an existing covered porch. The

contractor specializes in this type of construction. The

contractor designed the project and sent the plans to

an engineer for calculations and detailed drawings. We

paid the engineering fee separately ($1000) plus a

$5300 deposit (on $35,000 contract) and about $500 in

city fees. The city denied the permit, citing

non-compliance with building codes regulating air flow.

Bringing the plan into compliance would involve major

changes, including wall and door removals. We don't

want to pay more than our original contract price, and

the contractor said he can't do the work for that price. If

we abandon the project he wants to retain half our

deposit for his ''costs''. Shouldn't he have verified his

original drawings complied with the uniform building

code? The contract has an arbitration clause, but are

we still entitiled to seek legal representation?

Thank you for any advice, JB


Asked on 4/01/03, 11:57 am

1 Answer from Attorneys
Gary Redenbacher Redenbacher & Brown, LLP

Re: Building permit denied, who's fault?

From your description, it sounds like the contractor, who was responsible for the design, is also responsible for assuring that his design met applicable building codes. He, therefore, can't ask for an increase in the contract price. It would be different if, say, an architect did the design. Then the contractor would be justified in asking for an increase in the price because he was simply bidding according to plans. It's possible, however, that the contract provides for an increase in price if the planning department requires changes to the plan. It's hard to say without reviewing the contract.

Assuming that there is no right to ask for an increase in the contract price, if the contractor refuses to perform his contract, then he is in material breach. Your damages would be the difference between what someone else will build the room for and what your contractor bid.

There is a possibility that he will have a small claim for work performed, but I have a feeling it's not worth "half the deposit". By the way, he took an illegal down payment. He is only entitled to take $1000 or 10% of the contract price, whichever is LESS. In your case, of course, he was only entitled to a $1000 deposit. My guess is that the rest of his contract doesn't meet home improvement contract legal requirements and is, therefore, voidable at your option.

An arbitration clause does not prevent you from hiring a lawyer. In fact, I would heavily recommend that you consult a lawyer.

Also, don't hesitate to lodge a complaint with the Contractors State License Board. It's free and, although slow, they know how to handle these problems.

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Answered on 4/01/03, 1:59 pm


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