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When a contractor’s time or cost estimates are wildly off

On Behalf of | Mar 3, 2021 | Construction Law |

When you need to do work on your home, it can be hard to know what steps to take. Finding the right contractor is hard, and some people just hire the first person they find online or someone recommended by an acquaintance. Other people will talk to a few companies or contractors and hire the one that offers the best value when comparing the job they offer to do and the timeline for it with the price they estimate.

Estimates often play a big role in who you hire and how much you try to do with the project. If the only difference between several licensed contractors is the cost, you will probably go with the cheapest option.

When it turns out that the estimate was too low, the change in cost could leave you scrambling to adjust your budget to cover those unexpected additional expenses. What rights do you have when the contractor or construction company gave you a highly inaccurate estimate?

Why do estimates often end up being wrong?

Estimates roughly project the likely costs for a project. Unlike quotes, which are a firm price that a business must honor, an estimate is only an educated guess. The client should realize that the end cost could deviate from the estimated total expenses.

Companies have no way of knowing what they might encounter once they start working on a building. For example, there may have been a second layer of linoleum under the first, requiring additional labor and generating more waste. There could be damage to structural aspects discovered during a cosmetic renovation, like rotten wood caused by a leaky sink.

As such, businesses and contractors have the right to adjust their estimates when new factors arise. Other times, they will present you with a final invoice that should show where the difference in costs occurred. Often, additional labor expenses or unexpected material needs can contribute to an estimate’s inaccuracy.

What can you do about an inaccurate estimate?

If the discrepancy is more than 10% to 20%, that difference could be a financial hardship for you. Sometimes, the company will work with you, especially if you have professional help when negotiating the increased costs of the project. Other times, you may have to file a complaint.

The Arizona Registrar of Contracts can review complaints about drastic changes in costs and other contractor issues, like using different materials than agreed upon or failing to actually finish the project. Going through the Registrar of Contracts with professional help can lead to the resolution of the issue with the contractor or construction business that you hired.