Robert Koci
When your customer kicks the bucket…
Canadian Contractor Business PropertyIn the middle of a job
By Heidi Filici
When it comes to contractor-client relationships, things can get complicated… but has this ever happened to you? Recently, a reader wrote in to tell us his client died while he was renovating her home.
Here’s his letter:
I have a situation that I thought you may be able to give or get me some advice on. I am in the middle of a full townhouse renovation. My client, a single mother, died a few days ago. I have had no contact with anyone of authority on her estate, but have stopped the job.
Do you have any suggestions on anything I should do to make sure I am as covered as can be? Any advice would be welcome.
We sent the letter off to Mike Draper of Renovantage, who forwarded it to lawyer Bram Zinman. Here is Zinman’s advice:
The reader should first ensure that the deceased is the registered owner; a simple title sub-search will establish this. If so (and assuming there is some form of contract between the owner and the reader), then finding out if there is a will through others who may live in the house or other contacts is important. The will can inform you of any executors/trustees of the estate who are able to carry on the business on behalf of the deceased. Unless and until you can resolve the above, do no further work on the property.
Once you have verified who the executors/trustees are, establish the extent of the work remaining and payment for it with them. Also, be sure to compose a statement of work done/services rendered up until the last date of work. In this way, you can determine how much to claim under the Construction Lien Act within the 45-day lien period. If nothing happens during that period, it may be advisable to register a Claim for Lien (provided of course you are out-of-pocket). I would also advise the reader to consult a lawyer competent to give advice in this area of law because this may get legally complicated.
If you’ve been in a similar predicament and would like to offer suggestions to our reader, please feel free to post a comment here or e-mail us at: hfilici@canadiancontractor.ca
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Heidi Filici is a freelance writer based in Toronto and a part-time contributor to Canadian Contractor.
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This is the kind of thing you need to cover in your agreement. (Contract).
It is always frustrating to see people using these standard type of agreements…I’ve never seen any term relating to this situation included, aside from our Agreement.
“9. This contract, all its covenants, promises and conditions shall ensure to the benefit of and be binding upon the respective heirs, executors,
administrators, successors and assigns of the parties hereto.”
With this term, the agreement stands and you will not lose your profit from the full agreement.
Two decades or more ago, we had similar experience. We were building a new home for a customer who was in the building materials business. He was supplying some of the materials. The contract stipulated everything we could think of, except what would happen if the client passed away before we got paid. When the homeowner unexpectedly did pass on, he left us and his employer large unpaid bills. Evidently, he had borrowed from his employer to purchase the lot and most, if not all, the materials he supplied came from his employer’s inventory. The widow and the rest of the family did not have the wherewithal to complete the house. The client had not finalized financing of the house. The employer had no interest in pursuing the widow for money owing. After many months, we made a deal with the employer. We finished and sold the house and split the proceeds. Neither of us ended up ahead. Best thing, the deal was done without lawyers. That is probably why it worked out in the end.
Wow. What a story, Richard. Thanks for taking the time to tell it.
Your article reminded me of a situation I faced a few
years ago…
In summary, we were planning a project with a client (our 2nd project with
her in 3 years) when she stopped returning my calls. At the point she
stopped calling we had roughed out conceptual plans and had a rough floor
plan she needed to approve. The call that was never returned was to set up a
time to review the floor plan and talk about ideas around finishes. She
had passed away that day.
The client was a single professional woman with no family in town and as
such, I had no other contact info except for the person who referred her to
us. I called that individual to find out what was going on (I assumed
something was amiss as this behaviour was totally out of character for the
client) and was given the terrible news. I asked for a contact number for the family to offer my condolences and any assistance.
Because we had worked with the client before and the project went very well,
we were all comfortable not signing separate design and construction
contracts. Instead, we decided to wrap all effort into a single contract prior
to the start of construction. We had probably spent $1,500 worth of our own
time up to this point and so made the decision not to pursue it with the estate
(having emails laying out our mutual agreement but no contact in place made
it difficult). We did however, make ourselves available to the executor
should she have any questions or want clarification in the future.
Would I have done things differently, probably not… we ended up getting 3
more referrals based on the previous work for the client and how we handled
this situation. However, I now do ask for a second local contact if the individual is single/divorced, lives alone and plans to travel on business or be away during the
project.