Problems of renovations

If the completion of the renovation work is delayed, you can

• require the work to be completed
• withhold payment for the delayed part of performance until the work is completed
• terminate the agreement under definite conditions
• claim compensation for damages.

You are entitled to withhold payment for the delayed part of work performance until compensation has been agreed and the work is completed. The withheld portion of the payment must approximately correspond to the cost of the missing work, or to the financial losses caused by the delay.

An essential delay (breach of contract) may also entitle you to terminate the agreement. However, usually the contractor must be first granted a reasonable extension to complete the work. If the delay causes significant inconvenience, you may terminate the agreement with immediate effect instead of extending the deadline. Then, however, you may be required to pay the contractor compensation for the work that has already been completed corresponding to their value.

For compensation of damages, you can claim the standard compensation rate specified in the terms and conditions related to the sale in the situations mentioned in the terms. You are entitled to the standard compensation even if the delay would not cause you any loss.

If the terms and conditions related to the sale does not include term of a standard compensation rate or it cannot be applied for the damages incurred by you due to a delay, you are entitled to request compensation according to actual costs. The claimant must present proof of the damage incurred due to delay. Please note that the consumers are not entitled to compensation for trouble and upset, emotional distress or loss of leisure time by the Consumer Protection Act.

If no prior agreement exists regarding the price, the consumer must generally pay the price charged by the contractor, assuming the price is not unreasonable and the invoice is itemised.

Price disputes must always be evaluated on a case-by-case basis. When determining the reasonableness of the price, the contents and scope, quality and economically appropriate manner performance of the work are taking into account. The price charged for the work also depends on the professional skill and equipment required to perform the work. The price may be unreasonable considering the general price level and the other circumstances.

The contractor’s hourly rates of invoicing must be based on actual working hours and necessary travel hours. If the contractor has given a cost estimate on the service, they must generally be stuck to. The cost estimate may only be exceeded by 15% and justifiable grounds must be given for this. If the final price is lower than the cost estimate, the contractor is not entitled to charge according to the initial cost estimate.

A fixed price, i.e. a piecework rate may not be exceeded at all. Nor does the contractor have to lower the price even if the work turns out to be cheaper than expected. When agreeing on the fixed price, it is also advisable to establish the pricing of any additional work which the contractor could not have foreseen when the agreement was made. Maximum price is the upper limit for the price. It may not be exceeded even if the actual costs of the work are greater than expected. The price may, however, be lowered according to the amount of work performed or materials used.

In the event of a dispute, the burden of proof regarding the agreed price lies with the contractor. The renovation or building contracts should be prepared in writing.

If you disagree with a contractor regarding an invoice, you have the right to withhold payment of the excess portion invoiced. In this case, you must always submit a written request, along with relevant justification, to the contractor to have the price adjusted.
If the contractor does not accept the adjustment and insists on sticking to the original invoice, you should contact a consumer advice immediately. The consumer advice may evaluate whether there is reason to continue withholding payment and dispute the matter.

The contractor has no obligation to work for free. Then again, in a dispute he must be able to prove following: he has requested the customer’s approval for the additional work in question, what aspects of the work performance are considered part of the initial job and what aspects of the work performance are additional work, which will be invoiced for on top of the initial price.

If there is no explicit written contract nor agreement on the exact price, a reasonable price must usually be paid for the work and also for any additional work.

Additional work and the price charged for it should always be included in the written agreement when such work is requested by the customer or the need for such work otherwise exists. A clearly agreed price may not be exceeded by charging for additional work without having a new agreement or appropriate amendments to an existing agreement.

A service is defective when

• the content, performance or outcome of the service is not as agreed
• the work has not been done skilfully and carefully.
  • Skilfulness requires that the company has the technical knowledge, skills and other readiness necessary for carrying out the work. The work must be carried out in accordance with the knowledge and skills generally required in the field in question. The company must be able to select an appropriate working method and be able to organise the work stages sensibly. The work itself must be performed appropriately so that the intended result is achieved.
  • Carefulness includes asking the client for information on matters relevant to the work and presenting different implementation options in advance.
  • In a dispute, the company must be able to prove that the work was completed skilfully and carefully.
• the consumer’s interests were not sufficiently taken into account. For example, taking the consumer’s interests into account means that an entrepreneur must avoid causing unnecessary costs to the consumer.
• the durability and other characteristics of the work or materials do not meet the usual standards of good quality. The outcome of the work must meet the usual standards of good quality. In home renovations, for example, good quality means that preparatory work, including cleaning and smoothing surfaces, has been done properly before painting and wallpapering. If materials purchased by the consumer are used, the entrepreneur must also be able to assess their usability.
• the work does not comply with the requirements of an act, decree or regulation issued by an authority, including electrical and fire safety regulations.
• the work does not match the advance information. Advance information refers to all information that influenced the consumer’s decision-making provided about the service in marketing and when concluding the contract or providing the service.
• the service provider did not offer sufficient information about the most sensible way of performing the work or other important aspects. The service provider must inform the customer if, for example, the outcome would suffer from taking the object of the work into use too soon. The company must contact the consumer without delay if:
  • performing the work or repair ordered by the consumer is not worth doing.
  • the success of the repair is uncertain, or the appliance is likely to only work for a short while.
  • the work will end up being significantly more expensive than the indicative price given to the customer.

Consequences of a defect

On the basis of a defect, you are entitled to withhold payment for the defective work until the defect has been rectified or other compensation has been agreed on. You may not automatically withhold the full price of the service, but the amount should correspond the defective part of work.

The contractor is entitled to rectify defects himself. You may have renovation work to rectify the defect done by a different contractor, if you have reasonable grounds to suspect that the initial contractor would not be able to rectify the defect, or if you can agree on such an arrangement with the initial contractor. In this case, you may claim the costs of rectifying the defect from the initial contractor.

If rectification of the defect is not an option, you may claim a price reduction.

Terminating the agreement is the final option. Even in the case of termination, you must still pay for any non-defective work completed.

You are also entitled to compensation for damages to cover costs incurred as a result of the defect. These include, among other things, telephone, postal and travel costs. If a defect or damage is caused by negligence on the part of the contractor, he must also compensate for indirect costs incurred as a result of the defect or damage. Please note that the consumers are not entitled to compensation for trouble and upset, emotional distress or loss of leisure time by the Consumer Protection Act.

The primary contractor is liable for the work done by subcontractors. If, for instance, the customer is unable to reach the primary contractor and there is a defect in the work done by the subcontractor, the consumer is entitled to make a claim directly to the subcontractor.